Student loan debt is an evil drain on our national economy and a “hair on fire” emergency for our wallets.
When I married my wife, we sat down and discussed our finances. We agreed that we would combine our finances, the good and the bad. While she brought great credit to our union, I also married her undergrad and graduate student loans, all six figures of them.
I knew the stats; many millennials stay in their parents’ basement, unwilling and unable to pay off their loans, loans which prevent them from saving for a home or early retirement, loans which are so pernicious they cannot even be discharged in bankruptcy.
Paying off the Student Loan Debt
We embarked on a personal finance crusade to rid our lives of this debt, as fast as possible. Our strategy was influenced by our moderate dual income, no kids status. This is not a post tailored towards single payers, or those who need to utilize some of the many student loan repayment plans which are available, but which lengthen the loan repayment period.
Similarly, our plan rejected the public service forgiveness option. While my wife works at a non-profit, we forecasted that children and permanent changes of station might prevent her from accumulating the decade at a non profit needed for loan forgiveness. In ten years, the accumulated interest would be enormous if we failed to achieve forgiveness. Faced with this uncertainty, we made the following goal:
Payoff the Student Loans ASAP. Maintain the ability to vacation occasionally.
Over time our goals have adapted to include:
Achieve Financial Independence
Pursue Early Retirement
Maximize Tax efficiency
Prepare for a new Baby
So far we are about two and a half years into this journey together. We have less than 30 percent of our original debt remaining, have achieved a six figure retirement nest egg, have traveled internationally thrice, and in the US twice, and will be completely debt free by spring 2018. I hope you enjoy following along and learning from our self-education in striving towards financial independence.
Some of the upcoming topics we will explore:
Student Loan Pay-down: First Steps
Emergency Funds and the Military Family
Permanent Change of Station (PCS) Pay Advances
The New Blended Retirement System for the Armed Forces
Tax Efficiency of Debt Reduction?
Travel Hacking and the Credit Relief Act (SCRA)
Military Debt Alphabet Soup: the UCMJ, SCRA, MAL, LES, IRS, TSP
…and many more.
Disclaimer: I am not a licensed financial counselor of any sort. The opinions contained here are my own. Investing has implicit risk, past gains are no guarantee of future returns. You may lose money, including the principal.