I’ve Paid Off $10,000 in Debt

I’ve got lots of important posts in line waiting to be written, posts about my budget or how June was my second consecutive month of negative networth change. But not today, today I have to say: I’ve officially paid off $10,000 in debt!

Time for a happy dance!


How I Paid Off $10,000 in Seven Months

I started aggressively paying down my debt on November 30th, 2011, the day my first ever student loan payment came due.  I’d taken the six months grace period and was prepared to make my first payment. In fact, I was more than prepared. I’d already had my personal finance epiphany and had scraped together an extra $200 a month to add to my regular $300 payment. Eventually that extra payment became $240, and now it’s $325. Add that to my regular $207 monthly car payment and these days I’m sending around $830 to debt every month. That may not sound like a lot to some of you but I’m only one year out of school, I don’t make much cash yet, so it’s a pretty significant amount to me.

It’s been really hard, but below I’ve listed some of the things I’ve done that have helped me pay off my debt faster.

Pay Debt First, Pay Myself Second
These days I map out how much I should be able to put towards debt every month, and divide it by the number  of paycheques I get. Once I get paid and the money hits my account, I immediately make my debt payments (meaning I make four extra student loan payments a month). If I run out of money before my next paycheque, too damn bad. I have an aversion to carrying a credit card balance so this works for me.

Live Somewhere Cheap
As I’m sure you’re tired of hearing, I live in a 400 square foot house in the country. Because of it’s size, it’s cheaper to rent, furnish, heat, cool, clean and electrify. Would I love to live in a two bedroom apartment in town? Sure! But I’d love to be debt free more.

Smaller is better. (Not my actual house)

I Became a Master Budgeteer
The main reason why my monthly extra payments on my student loans kept inching up is because I’m always trying to squeeze an extra $5 out of my budget and into my debt payments. I started out at $50 a week in extra payments, and now I’m squeezing out $81.50 a week in extra payments. The difference may seem small at the time, but $81.50 per week adds up to about $4,238.00 per year, which is significant.

I Was Disciplined with Windfall Money
In case any of you have been doing some quick math in your head, you’ll probably realize that those little payments haven’t added up to $10,000 by themselves. I had some significant help. In March, I got a tax return of $5,442.00. $1,000 of that went into my wedding fund, $442 of it went into my dog fund, and a hefty $4,000 went towards debt. Not one cent of that tax return was spent until a few weeks ago when I finally got a dog (paying in cash felt good). I’ve received other windfall money as well, and I’ve so far been pretty good at resisting the temptation to spend that “found” money, and instead, I’ve funnelled it toward debt. For example:

The Last Few Dollars

This part of the story is just weird. Last week I tweeted this:

But try as I might, I just couldn’t find an extra $138 to throw at my debt and hit that target. It was a little disheartening, even though I knew I would hit it the week after, it would have been nice to force that $10,000 goal a little early and sneak under the seven month mark.

Then I got called into my boss’s office. It seems that I had a little extra vacation pay banked this year. Which meant that I could expect to receive a small bonus this week. How much? $178. It was too perfect. As soon as that paycheque was deposited I logged onto my banking website and sent my usual extra $81.50 payment plus another $140. I then high fived my fiancée and we took the remaining cash and went out to dinner.

The Next Seven Months

Let me make things clear, I do not expect to clear another $10,000 in the next seven months. The tax return thing was a fluke and had a huge influence on how quickly I arrived at this 10k mark. But I do intend to keep throwing as much cash as possible at my student loans, I’d like to see my total debt keep dropping like a stone as it has been. Who knows, maybe I’ll come into some more windfall money and get to make another big payment. In the mean time, I’ve got to get back to my happy dance.

How long did it take you to clear your first $10,000 in debt? Are you still on your way to this goal? I want to know!

  • http://twitter.com/SenseofCents Michelle

    Wow good job!

    • JordannK


  • http://www.uniquegifter.com/ Anne @ Unique Gifter

    Well done.  That’s super-fantastical that you got the vacay payout!!

    • JordannK

      I know it seems so random that I would get that the same day I needed it!

  • http://twitter.com/frugalportland Frugal Portland

    Congratulations! I’m working on my LAST 10K and could use a tax return like that. :)

    • JordannK

      It was definitely helpful, I don’t expect to ever get that kind of payout again.

  • http://www.nomorespending.net/ Laura @ no more spending


    • JordannK

      Hey thanks!

  • http://twitter.com/blondeonabudget Cait Flanders

    Congrats, Jordann! I paid off $10K in 6 months and another $7K in the 6 months after that. You’re a great inspiration to those who don’t think they can do it. One decision to make a change leads to a number of behavioural changes required to make it happy. You’re proof of that. So happy for you!

    • JordannK

      Thanks! You’re so right, all it takes is one behavioural change at a time.

  • http://anexactinglife.wordpress.com/ anexactinglife

    Waiting for a post about your new pup!

    • JordannK

      Coming right up!

  • http://www.modestmoney.com/ Modest Money

    That’s an impressive feat Jordann.  Congrats!  It’s funny that your vacation payout came just when you wanted the extra cash to reach this milestone.  You’ve definitely worked hard at squeezing every last dollar from your budget to make this happen.  To think that you’ve also been able to save for a wedding and a dog at the same time is even more awesome.  Nice work!

    • JordannK

      Thanks! I only hope I can keep up this enthusiasm for the next few years until I’m entirely debt free!

  • bogofdebt

    Great job! I haven’t paid off near that much yet but I’m working on it.   I’m about $2k into that goal and will reach it eventually!  So I won’t make the 6 month mark but I know that I have one student loan finally out of default and that makes me happy!  Congrats again!

    • JordannK

      It’s all about the small goals, I celebrated a bunch before I got to this big one! One step at a time, and eventually those steps are going to add up to one really big celebration.

  • http://carefulcents.com/ Carrie Smith

    Congrats Jordann! What a great accomplishment and you should be super proud of yourself. Can’t wait to hear about the rest of your progress. Good luck!

    • JordannK


  • http://twitter.com/seedebtrun See Debt Run

    Nice, Jordann!  Keep it up!  We’re in a similar situation with having dropped down so much at first because of a nice tax return, but definitely not expecting the next half of the year to be as kind..  

    • JordannK

      I’m definitely not expecting to make that much progress in the next few months, but I just need to keep working away at it and eventually we’ll both hit our goals of becoming debt free.

  • http://www.momoneymohouses.com/ Mo’ Money Mo’ Houses

    That’s so awesome, congrats! And I love that little house even if it’s not yours. I would totally live there and pretend like it was Little House on the Prairie.

    • JordannK

      Hmm…My actual house could totally be a little house on the prairie…it’s right next to a hay field!

  • JordannK


  • JordannK

    Thanks! It’s been an amazing couple of months, I only hope the next few can be just as good.

  • http://belowhermeans.wordpress.com/ B. (Below Her Means)

    This is super awesome. I’m seeing a few of these posts around the personal finance blog universe – progress over the past few months broken down. Perhaps I’ll write my own too.

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  • Sandra Smith

    Hi…I have about $14,000 in school loan debt. My loan term is up in a year and I have no idea on how I am going to pay this off. I really need help on this, as I don’t make enough to just pay it out right. any ideas? Sincerely, Sandra Smith from Auburn, WA.

    • http://my-alternate-life.com/ Jordann

      Hi Sandra,
      I sent you an email to respond to your comment, let me know if you don’t get it!

  • syed, singapore

    great discipline, well done.

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