In my first post, I told you I would keep you updated on our progress toward being totally debt free. Goal #1 was/is to wipe out our federal loan for my grad program. After that, we’ll hit the smaller family loans head on. I don’t know if Dave Ramsey would approve, but since the family loans have been interest free, we figured we’d tackle the one that is growing first.

Just to remind you, we started out with $29,000 in federal loans and $14,000 in family loans. We got serious about our budget and paying this stuff off in late fall of 2014 or early winter 2015. Up until December, we had chipped away at our federal loans month after month – budgeting, living lean, prioritizing, but always socking away a little here and there for a comfortable buffer.

Then one night this past December we were listening to Dave’s show as we often do, and were convicted about our actual intensity regarding getting rid of this burden. So we talked and prayed and decided to take all of our buffer except our $1,000 emergency fund and the expenses for the next two weeks and throw it at the loan – that came to a payoff of just over $7,300. We were ecstatic! and terrified…

The months leading up to that leap we had been talking about purchasing a second vehicle. We have been really blessed to be able to make things work with public transit and one car, but we knew having a second vehicle – even if it was old, as long as it was reliable – would make us a lot more flexible. So we had been saving up. At the same time, my dad, who flips houses, had said he wanted to help us out with the vehicle. We appreciated the thought, but figured we would make it work with our savings, but when we got home for New Year’s he broached the subject again and said he wanted to give us some of the money he had made on his last flip to help with the vehicle. We thanked him sincerely, but told him that our first priority was to get rid of these loans and we had decided to take all our savings (minus the emergency fund of course) and throw it at that goal.

He said that he wanted us to feel free to use the money for that if that’s what we thought was best, but that he wanted to give us these funds. We were both floored and so grateful. So once we got home and wrapped up the monthly budget for January we looked at all the numbers and were able to put an additional $7,000 toward the loan. We were able to pay over $14,000 off in 44 days – talk about a crazy answer to prayer! When you finally feel like you’re really gaining some momentum, it’s even more exciting to buckle down and tighten the belt to reach the finish line!

So now we’re at $6,202.08 and our goal is to be done with this loan by June and out of debt by the end of 2017. Lord willing, we’ll be debt-free in the new year!

That’s our journey, but I hope that you are just as excited about yours, whether you’re making minimum payments or on track to finish your debt off in a few months, it’s the process that really shapes who we are. I’d love to hear your story and glean some ideas! Feel free to share in the comments below.