Many people view education debt as good debt; we don’t believe this to be true. Although education loans often sit at lower interest rates than credit card loans or mortgages, they encourage borrowers to make minimum payments for many years, accruing lots of interest while continuing to purchase new cars and houses and living life as if any money that comes into their hands is not already spoken for.

We have a pretty huge goal. We are planning to pay down the remainder of our student loans by December 31, 2011.

Ali and I have been thinking about this idea and preparing our lifestyle since we moved to Portland in August. We have been experimenting with levels of frugality, envelope budgeting, and finding areas where the money leaks out. We’ve been making a grand attempt to “right-size” our lives, taking into account the fact that we don’t need as much as we think… and most of all finding ways to live in abundance mentality. Finding joy in what we have rather than concentrating on anything that seems to lack seems to be the key to success.

Frankly, we find it surprising that so few in the US talk about personal finances. We think about money constantly, but few people share details of their budgets. Since the US is at the absolute front row when it comes to personal spending, disposable income, and consumer mentality, we should know the most about how to handle our finances. And yet, few people even know how to live within their means let alone think that’s a good idea.

We’re going to open up this space and share some real numbers with readers in an attempt to encourage others who may be in similar situations. We’re withholding specifics on our salaries, but will share details of the loans and our spending/saving patterns. We understand this may draw criticism on all sides, but we’re hoping for the grace that comes from knowing we are doing our very best to make decisions that will take our little family in the direction of true freedom.

As of December 1, 2010 our loans total $69,176.76.
We have $0 in credit card debt (we no longer use credit cards), our car is paid for, and we do not have a mortgage. When we pay off our student loans, our goal is to be completely debt free.

This blog is an invitation to readers to join us as we fight our ingrained overspending tendencies and battle our student loans to the death. Are you ready for an epic journey?

If you’d like to join in the fun, we’re going to take reader submitted questions in old-school mail format. So once a week or so (or however often we get them) we will post reader questions and challenges for us and for Spencer. The more entertaining, the better! Find your stash of stamps and envelopes, and submit your message:

Ali & Rachel H
PO Box 11506
Portland, OR 97211

For future reference, you can always find this address on the ABOUT US page from the blog menu.

11 thoughts on “$69,176.76

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  2. Jaimie

    Rooting for you guys! This is an admirable project. Jeff and I try to live debt-free as much as we can, but we do have a mortgage right now, so we are not there yet! (We have logical reasons for the mortgage, but still, it’s hard to fathom a home costing that much money. For reals? Sign me up for an Amish barn-raising!)

  3. Kristen

    I think the idea of student loans as “good debt” is that the education you got with it is an investment that pays back dividends.

    I will bet a cookie that your household income would be significantly lower if it weren’t for Ali’s master’s degree from MIT.

    So I have a big old honkin’ mortgage debt — but if I weren’t paying a mortgage I’d be paying rent which would be roughly similar.

    So, in my book, it’s okay to incur student debt (within reason — much like I don’t beat myself up over having a mortgage per se, but I could have taken out way too much mortgage debt and gotten myself in a pickle) — but of course it’s a grand thing indeed to pay it off!


  4. micah

    Like Jaimie and Kristen, my wife and I jumped into more debt when we bought our first house last year. While the number is staggering, it is a type of debt that we were willing to take on because of what our own home brought with it: a place to call our own, to start a family, to not share walls with unruly neighbors, and (honestly) a way to stroke our egos. But before we did that, we did a lot of debt trimming. We paid off both of our cars, paid off all of our credit card debt, and paid off my student loans. We now carry zero credit card debt and just have to worry about the mortgage debt.

    I also agree with Kristen that student loans are a good type of debt to carry, since a college education should be able to pay itself off multiple times over in the course of your life.

    I wish you and Ali great success towards your goal! I can’t wait to see how successful you guys will be!

  5. mdog

    i see kristen’s cookie and raise her one.

    going into educational debt is a choice. paying off educational debt is also a choice. the low interest rates may indeed ‘encourage’ a long drawn out affair, but that is the bearer’s decision.

    be wise not to confuse poor decision making with inherent badness. also be wise to understand where you would be without the leverage of education you now carry. [this is not a flippant line – truly, think about what your educations have brought to your lives].

    all that being said… can’t wait to keep tabs on spencer through 2011!

  6. Anna Couzens

    What a fabulous idea. Love the way you seem to be going about it. We owe about the same in student loans also and that is our only debt. AND we are actually moving to Portland later this month, happy to hear you’ve been enjoying the PNW. I’d love to set a goal for us to pay off this debt too! We’re in no rush to buy a home so now is the time to do it I suppose. Best of luck to you…as you quickly approach your goal!


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