Credit Debt Finances & Money

We’re Free of Consumer Debt!!!!!!

As of today, we have paid off all $113,000 of our student loans, auto loans and credit card debt.

We are debt free!!! (except for that pesky mortgage)

I sent the final check of about $3,000 off to pay off my student loan last week, and now the website shows a credit of $13.71. See below:

I’ve also updated our debt scales on the right so we now only have our mortgage. I’m not listing our primary mortgage since we’re nowhere near paying it off as we’re working on our second mortgage instead.

Credit Cards

After starting with $20,000 in credit card debt (really closer to $25,000 at its peak), we paid off our credit card debt in September, 2007. Over the last 2 years, we’ve used our credit cards for almost all purchases, but have never carried a balance. In other words, we ALWAYS pay off our credit card balances every month. If you’re wondering, we use credit cards for rewards, security and convenience, but I declare right now that I will never pay another cent in interest to a credit card company!!!

Auto Loans

After going through my archives, I realized that I never told you all that I paid off my Honda Ridgeline truck loan in May of this year! How did I miss that? Actually, we were traveling non-stop in April and May, so I can see how I missed it, but it was a momentous occasion. I’ve had a car loan on various cars since 2001 (senior year of college) and I have now been payment-free on both our cars (2006 Honda Ridgeline and 2005 MINI Cooper) for about 6 months now! I paid the loan off about 3 years early.

If you recall, back in 2007, we paid off our Chevy Malibu (4 years early), then promptly sold it a few months later. We went about a month with our old 1997 Pontiac Grand Am before I stumbled across the exact MINI that my wife has been longing for…used. We used the funds from the Malibu sale, along with savings to pay off the loan on the MINI in about 2 months.

Student Loans

For college, I chose to go to a state school (Penn State), but I wasn’t prepared financially to pay cash, except for a $4,000 scholarship I obtained, and neither were my parents. Therefore, my parents took out loans in my name for the tuition, and they took loans out for themselves to pay for my housing. After 5 years of college (I changed from Accounting to Operations & IT in my senior year), I left with about $20,000 in student loans.

On the flip-side, Stacie went to a private college that cost about $25,000 per year (it’s over $30k now). After 4 years, she received degrees in biology and communications, and then continued directly for her Masters in Nutrition Science at Penn State. Since the masters position was research focused, it was paid for by the university, and they even paid her a stipend. But the funny thing is that she left with about $20,000 in student loans as well, and she got the masters too.

We paid off Stacie’s student loan in April, 2008, and then finally this past week, we paid off my student loan. I actually had 6 loans originally and consolidated down to 2 years ago on a 15-year term. It took me 13 years from the first loan issue to pay them all off, but really they didn’t become payable until 2001. Therefore, I paid them off about 7 years early!

How did we pay off $113,000 in 3 years?

Actually, I’ll hold off on writing more of our story until a later date. For now, I’ll just let it sink in that all the debt that kept me up at night and prompted dreams of winning the lottery just to pay it off is now gone. While it would be nice to win the lottery to pay off our mortgage, I’m not worried anymore. The weight is gone, our bank accounts are now filling up more quickly than ever and best of all…FOR ONCE WE HAVE A PLAN FOR OUR FINANCES!

Stay tuned…

About the author

Clever Dude


  • @Kristen, nothing yet. I’m not a big celebratory type of guy (I was actually just telling my wife that). I think maybe a nice dinner out somewhere, but nothing really big, at least financially. The bigger celebration would be for graduating from grad school in about 4 weeks!

  • Congrats, Clever. Just wondering: what was the effective interest rate on your student loan/s v the effective rates on your 2nd mortgage (and your 1st mortgage, for that matter) … and, how did you decide which to pay off first?

  • @AJC, the rate on the student loans was 6.25%. The 2nd mortgage is 7.875%. First was 5.25%. I chose to pay off the student loan because it was more manageable and I could get it off the books faster than the 2nd mortgage. Mathematically, the 2nd mortgage makes more sense until you factor in the tax deduction which brings them down to about equal.

    It was basically to get the personal achievement of paying off my student loans before graduating with my masters (next month) as well as only having mortgages left.

  • How amazing, the combined income of two college graduates was enough to pay off the student loans and a couple auto loans? Wowzer, who would’ve thought. Perhaps I should write about how I’m working my way through college and avoiding debt altogether, I wonder how much praise I’d get.

  • @Who Cares: You’re right. It’s pretty lame that 2 individuals who made the wrong decisions about acquiring debt were able to get out of debt, especially 6 figures of it. And that’s a great assumption that since we have college educations that we’re somehow able to immediately pay off all the debt.

    I pity all the people out there without a college degree who immediately went into the workforce. Poor suckers didn’t get to spend tens of thousands of dollars on college tuition, room&board or books, or at best, struggle to get scholarships or grants to help them along. I’m privileged that I have a college degree because they’re so easy to get, right?

    You’re not the only one who worked through college. I’ve had a job every day of my life since I was 15. I was one of the few kids in high school with a job. I watched all my roommates go party while I had to get to bed early for the morning shift at McDonald’s. You’re not the only one, bub, so get over it. If you think you have a story, then write about it.

  • Freaking CONGRATULATIONS! I can’t wait until I hear the remaining of the story. My family and I are paying of $85K and we are no where close to the meeting the speed you’ve made your progress. Would love to catch up!

    Totally – Congratulations!

  • Congratulations! That’s a tremendous accomplishment, and you’re a role model for those of us who still have debt to handle. Keep up the good work, and be sure to share your progress in building up your net worth from here on out. Congratulations, again!

  • Sounds great!

    What’s the breakup, now, between the % of your net worth in your house v in other investments (e.g. 50% house, 40% invested, 10% ‘stuff’ like cars/furniture, etc.)?

    And, what return do you expect to get on your investments over the long-haul?

  • @AJC. Good question. Don’t mind the math as I rounded:

    Cash: 17%
    Investments: 37%
    Home Equity: 6%
    Autos: 17%
    Personal Property: 12% (if I could sell it all right now)
    Whole Life Insurance: 5% (yep, I got it, it’s expensive, but I’m not giving it up!)

    Investing and savings are next up in our planning. Honestly, we’ve spent so much time just thinking about debt, we haven’t spent much time on the future. Now is the time.

  • Congratulations!

    You are such an inspration to us! My husband will graduate from medical school in May and will leave with just under $115,00 in student loan debt. We don’t have any other debts but let’s be honest….how could we with that much student loan debt?! I was intrigued by the format your loan tracking was in…how did you track all of them down? My husband has a combination of federal and private loans from undergrad and med school and it seems like the hardest part is keeping track with who owns them now. Any advice you would have for us would be much appreciated. And again, congratulations on your awesome accomplishment!

  • @Rachel, I consolidated my loans into 2 loans and Stacie’s into 1 loan shortly after I graduated college. It only marginally lowered my interest rate, but it made repayment much more manageable.

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