Getting Out of Debt: Two Student Loans Down - Eight To Go

As if Brandon's homecoming wasn't great enough, we had another big event happen last week.

We paid off another student loan!!!!!  Check out the debt pay off tracker.

The loan was a "small" one so it "only" equaled three monthly payments.  But that is the most money we've put toward the student loans at one time so its pretty exciting.  

I've been preparing for this the whole time Brandon was gone.  His pay checks were bigger while he was in Korea.  Every month I would put some of that extra money into a special sub-savings account.  Some of the money I kept out for fun things like bikes for the kids and our trip to Utah.  But I saved a big chunk of it.

When the amount of money in the savings account reached the same amount as our smallest student loan it was time to pay it off.   I could have paid it off a little bit sooner, but I wanted Brandon to be around when I did it.  (And I was building up our other savings to act as an emergency fund.)

Last Wednesday I finally paid off that student loan.  It was kind of hard to move that money out of savings.  I've liked the peace of mind from knowing that money was there as an extra emergency fund.  I had to tell myself that we have other savings and so it's okay to use this money to pay off a loan.   

The loan that I just paid off was one of the four loans we have through Fed Loan.  I'm hoping to have the other three loans paid off by the end of next year.  Then we will focus on the one ACS loan.  When that one is gone it will be time to do some giant slaying.  The four loans through AES are huge, but they should fall pretty fast once the other loans are out of the way. 

Now the money that would have gone toward the monthly payment for that loan can go toward paying extra on the next smallest loan.  We already were paying extra on the loan that just got paid off, so all that extra money is free to go toward the next loan too.  It's called the snowball effect and it's part of what is going to help get us out of debt quickly. 

Getting out of debt can become pretty addicting.  I love staring at the debt pay off tracker and imagining how much fun it will be to rip more squares off.  And I love knowing that we are now 5 months ahead of schedule. The momentum is building!