This week’s post is by Jamie Griffin. Jamie Griffin is a Middle School Teacher and Blogger who runs the site MrJamieGriffin.com. He and his wife are working hard to pay off their student loans and teach others how to Do Money Differently.
My wife Jenna and I started our plan to aggressively pay off our student loans in 2013. Since then we have paid off nearly all of our debt, increasing our total amount paid every year. It has been a long road, and while the end is in sight, I want to reflect a little on how we got this far. I know that most people reflect sometime in January, but March is still pretty early in the year right? Better late than never! In 2016, we had our biggest year of debt crushing, paying off a crazy $29,586.55!!! Looking back at our year in review, I will show you how we did it.
When we first started dating, we had five student loans with combined loan payments totaling $921.91 a month, and that was just the minimum payment. And because I am super nerdy, I calculated that this amount was 21% of our monthly income. If you have been following me for a while, you might already know that I am a huge fan of Dave Ramsey’s debt snowball to get out of debt even faster. Therefore it is no surprise that in addition to the minimum amount, we throw every extra dollar we can at our loans.
In the early months of repayment, the debt snowball helped us develop a great mental toughness to “just get it done.” Then as it grows, you really start to see a difference in your monthly payments. In June, we made the final payment on our Firstmark loan cutting down to just two loans left! It created tremendous momentum for us to focus on our giant, mega $31,000 loan that just never seemed to make any progress. It was fun to roll our Firstmark payment into this loan, increasing the payment from $220 to $600 a month. To give you an idea of the dramatic impact, our big loan went from $30,500 to $13,100 between July and December! Talk about accelerated repayment!!! Now we definitely had some other factors that played a role, but even so, it helped us kick some serious butt!
Teaching Our Way to More Money
We had a great year with our careers! As teachers, we don’t get many raises other than about 2% to keep up with increased costs of living. However, since Jenna is a science teacher, she got a much bigger raise. In Minnesota, there is a shortage of highly qualified science teachers, so the Department of Education gave raises to science teachers due to it being a “hard to place” position. As a result, she got an extra $3,500 added to her salary just for being a science teacher. (Sadly, social studies teachers didn’t get the same love) That had a huge impact on our monthly take home pay!
Another contributor to our income was taking on extra positions at our school. We both helped coach our school’s middle school volleyball team, and I coached the boys basketball team. I truly love being a coach, so often times this did not feel like extra work for me. A middle school coach isn’t a glamorous position with a big paycheck but through all of the coaching, we pulled in an extra $1,800 total. The key word being extra, because it all went towards paying down our loans.
In addition to coaching, Jenna took on a leadership role planning school events, curriculum for our core values, and running assemblies. She did a lot of work to help make our school a better place and was rewarded with approximately $1,000. Again, it isn’t a lot, but every little bit helps!
Side Hustling to Promotions
One of the biggest differences from our first year of marriage to the second year was working at a restaurant and earning cash tips. Last year (our third year of marriage) was no different. The restaurant we work at is in the touristy part of town and attracts loads of guests in the summer season. The first year, we worked at the restaurant for eight months, raking in $13,360.45 (again, this is all extra that goes towards our loans!). One big difference this year is that Jenna got promoted to a night server. Previously, she was a day server and a host, so this was a huge promotion, because night serving is where the money is at.
The restaurant is busier, and the food costs more on the dinner menu compared to lunch. This promotion alone led to an extra $6,000 to tack onto our student loan payments, bringing our second job total income to $22,320.84 (the rest of the increase came from working an entire 12 months, compared to 8). With this kind of income, it’s safe to say our second job has been instrumental to paying off our loans in such a short amount of time! If you don’t have a second job or side hustle, I highly recommend getting into the restaurant business! It is worth it!
Meal Prepping for Savings
Four years ago, we made a radical decision to stop going out to eat. Instead, we choose to meal prep on Sundays and cook meals for the entire week. I hate cooking, so this is a really good thing for me. If I can suck it up and cook everything in one day, it means I don’t have to cook all the rest of the week. All I need is a microwave and I’m set to enjoy a hot, delicious meal! It has really made it easier to avoid going out to eat too.
It is hard to justify spending $30-50 eating out when I have a complete meal waiting in the fridge. Each month we save between $50-150 by not dining out. We also spend just $60 a week on food, which according to our friends is barely anything. We have found that our money stretches farther when we buy in bulk at Sam’s club, and buy a lot of the same things every week. If you’re looking to save money on your food budget, give it a shot.
Oh, and We Bought a House
I know what you’re thinking, buying a house isn’t paying off debt. You’re right, it isn’t, and it did hinder our ability to pay off even more debt. For years, we have slowly been saving a little each month to buy a house. We went into overdrive when our dream home went up for sale. In the end, we sacrificed about $4,500 from our debt repayment but have experienced so much joy in our new home this past year. Even though we weren’t completely debt free when we bought our house, we worked extremely hard and delayed this purchase for several years. It was a tough decision to make, but for us, I think it was the right choice. It may have slowed down our goal of paying off debt, but it also helped use achieve another goal of being homeowners and finally getting a dog!
Wrapping it Up
2016 was an incredible year for the Griffins getting out of debt. We paid off a loan in full and made tremendous progress on our other loans. It’s still hard to believe that we paid off $29,500 on our loans. In the grand scheme of things, that was 39.6% of our total income (did I mention I’m nerdy and love spreadsheets?). We definitely had some things go our way, but worked really hard and made sacrifices to really crush our debt! I truly believe that the only thing that stands in your way between now and being debt free is a lot of hard work and smart financial decisions. Get after it!
How did you crush your debt in 2016?