A little background:
We are on a journey to pay off as much of Dave’s medical school loans as we can while he’s still a resident. In all likelihood, we’ll probably end up paying the interest and preventing it from getting added to the balance, and I suppose I’ll be satisfied if we can manage that (probably a good $40,000 from the 4 years of medical school plus 5 years of residency. And I thought the original balance was bad enough!!) Our plan was always to pay of all of his loans in 3 years once he had a real job, since we didn’t think we could pay much while he was a resident making not much money. But when we got a statement saying that his loans had accumulated $15,000 worth of interest just in the time he was in medical school (and I wanted to vomit, literally, when I saw that), we realized that we’d better get a move on it and that every dollar we could squeeze out now would benefit us so much in the long run! Besides, I’ve heard tons of people’s debt free calls to Dave Ramsey who have paid off $10,000 or more a year making the same amount of money we are. Last year, we paid about $6,000 to finish off my student loans, replenished our emergency fund after some unexpected car repairs (after we’d used all our car repair savings for other car repairs - the joy of driving old cars!), and paid about $1400 on Dave’s loans. Now that we know a baby is coming, we’re following Dave Ramsey’s advice to set aside all the money we’d be putting to loan repayment into our emergency fund, just in case we need it. Once the baby comes, and everything is fine, we’ll send that money straight to the loans.
1) Save $750 per month in the temporary emergency/loan repayment fund, which totals $5250 by August.
2) Cash flow any baby related expenses (childbirth classes, doula if we go that route, items we need to purchase, etc.) so that we’re not tempted to use the emergency money instead of sending it to the loan.
3) I’m joining the debt busters group at Thrifty Florida Mama’s blog. There’s a monthly check-in with other people working hard to pay off debt.
4) Sell 5 items per month on eBay and/or Craig’s List. We have a lot of things in the basement that we’ve been meaning to get rid of, but I was waiting until I was done with school to tackle that. Well, I’m done with school now and it’s time for that stuff to go! I’ve been selling books online and swapping quite a few books at paperbackswap.com (awesome resource, by the way), but it’s time to get going on the rest.
5) We’re joining a Financial Peace University (FPU) class that a local church is offering. I’ve thought of going to FPU for quite a while, but I listened to all the tapes (yes, tapes) from the class my parents went to back in the day, I listen to Dave Ramsey all the time, and I felt that the benefit of going to the class was probably not worth the cost. Well, the church is offering the materials at their cost and they’re doing it in a small group format. So this is the cheapest we’re ever going to be able to do FPU, plus we’ll get some much needed community and fellowship time with other young married couples. We’re hoping that FPU will keep us fired up and help us think of more ways to find extra money in our budget.