We made it through 2021! Here’s an update on how much debt we paid off in one year. 

But first, let’s talk real fast about why we are doing this whole debt-free journey thing to begin with.

Why We Want to Be Debt-Free

Simply put: We want freedom.

Debt (especially debt in the six-figures, like ours) is a chain of bondage.

And I’m not being dramatic.

Get a glimpse of what debt and financial struggles did to our marriage.

We want to pay off our student loan debt to:

• be financially secure enough to buy a home (This is the big goal here. We’re in our mid-30s and in 9 years of marriage, we’ve always lived in apartments and townhomes. We want a real, detached home with a backyard.)
• keep the promise we made when we accepted the loans to pay back the money,
• properly save for retirement and build wealth, and
• be outrageously generous.

*insert radical empathy photo

The plan to pay off all our debt started with Dave Ramsey’s Financial Peace University classes. 

I first heard about FPU through a friend in 2010. I sat in on a class. I later bought the kit in 2012 and signed up when they did another round of classes.

But y’all, my life was so chaotic. I wasn’t all in and didn’t finish the class.

Fast forward to marrying Orrin in 2013. 

Orrin knew of Financial Peace way before I did.

Orrin grew up in the Nashville, TN-area, where Dave is based out of. Orrin grew up with his dad listening to Dave on the radio.

To top it off: Orrin went to the same high school Dave Ramsey went to. 

So Dave’s personal finance curriculum was taught at his high school.

(Too bad it didn’t completely stick!)

We had loan accounts in default, in collections, and more than $100,000 of student loan debt between us.

A weary welcome to marriage, right?

After another failed attempt in 2013, we finally graduated FPU March 2015.

(Little did we know, our FPU graduation was just a few months before finding out we were pregnant with our first baby…)

So why is it six-plus years later and we’re still not debt free?

Or even close to it?

I talked about it in my post about marriage and money.

We had some “unique circumstances,” (a stereotypical millennial statement, right? lol) Everyone has unique circumstances. No one is special. Sorry, Barney, but thank you, David McCullough, Jr.

It boiled down to this: We didn’t want it bad it enough to put in the work.

But we’re all in now.

And we’re making progress.

How We Got In So Much Debt (Our 2021 Starting Debt)

We started off the year with 3 debts:

• Medical Debt – $928.75
• Car Loan – $7,931.34 (remaining amount from our 2020 purchase)
• Student Loans – $113,790

The medical debt was from a hospital bill from the birth of my daughter FIVE YEARS AGO!

I was on Medicaid government assistance (definitely not proud of…).

So technically, I shouldn’t have had to pay a dime.

Long story short, our daughter failed her first hearing test and needed follow-up care.

It was my fault for not responding to letters in the mail sent back in 2015.

But the whirlwind of being a new mother got to me:

• going back to work (12-hour shifts as a detention officer at a county jail…)
• Battling pneumonia after going back to work
• Putting my new 8-week-old baby in daycare
• Breastfeeding, pumping milk, storing milk, etc.

The list goes on.

Suffice it to say, I just ignored it and figured it would sort itself out.

Bad mistake.

The account went to collections and the collectors were ruthless – following me around for five stinkin’ years! Well, no more. So grateful to get that debt out our lives.

You can see our car loan breakdown and backstory in this post.

And the student loans speak for themselves. Those loans dated as far back as 2006.

How Much Debt We Paid Off in 2021

We paid off 11 loans to total $33,494.67.

The medical debt, car loan, and private student loans are gone. Bye, bye, bye to $16,984.27!

Plus, $16,510.40 of public student loan debt is gone.

All that as a family of 4 on a mostly single-income and a pretty low salary as a public school teacher. (#teamtinyshovel)

We are so incredibly thankful for the income-producing opportunities that came in 2021 to help us dump so much to our debt.

We actually increased our income more than that.

We had to put about $8,000 aside for taxes and tithes. Since the extra money came from contractor work, federal taxes weren’t taken out. So we’re still responsible for paying it. We didn’t want a huge bill from the IRS so we calculated about 20 percent every time we got paid and put it in a separate savings account. This is our first time doing self-employment taxes, so hopefully it pans out and we won’t owe more than we’ve saved for.

While I’m grateful for our progress this year, I want more.

I want to pay off even more this coming year.

You know those big, hairy goals?

Mine would be to pay off at least $25,000 of our debt in 2022.

How Much Debt We Have Left

At this point, we only have student loan debt left in our debt snowball.

I have student loans and my husband has student loans.

The loans are through Nelnet and Aidvantage/Maximus (formerly Navient, formerly Sallie Mae *eyeroll*).

We sat down and combined my student loans and my husband’s student loans. We put them in order of smallest to largest.

Now, there are 11 loans left – all student loans. The remaining debt total is $98,931.40.

Dave Ramsey suggests those in Baby Step 2 to split up active debt and inactive debt.

Active debt is current debt. The debtor is making regular payments and the account is in good standing.

Inactive debt is an old debt in default. It basically is debt that’s in collections. That means a debtor hasn’t made payments toward the debt in a long time, usually after 90 days.

According to Dave, tackle the active debt first.

It’s way easier, too, because debt collection agencies are more willing to settle your debt in one lump sum for less than the loan amount.  

It’s also exciting.

Once we’re finally done with the active debt, our $33,478.27 inactive debt should be settled pretty quick. Whatever creditor that ends up with it will likely accept $3,000 to clear the account in full.

(We were actually in negotiations with a debt collector for this debt in 2020. They were willing to take $5,000 to clear 33 GRAND! We backed out – long story – but debt settlement is possible.)

Our remaining active debt is $65,453.33 and that’s what were tackling right now.

The One Thing That Helped Us Get Traction In Our Debt Free Journey

You know those things that are simple, but not easy?

The journey to debt freedom is like that.

In the past, we made it hard. But it really isn’t.

It’s this:

Take one step at a time. Repeat.

You have to want it.

It goes back to earlier in the post where I explain why it took us so long to start.

Once you want it enough, you will finally start and you will work hard to actually finish.

It’s that mindset that opened our eyes to how we can make more money to throw toward our debt.

Then, we stepped in to the world of side hustles. It took us much further than the once-a-year income tax return, occasional gift from a family member, or the trickle of money left over from our regular salary after bills.

Those additional income streams kicked our debt payoff into high gear.

When Will We Be Debt-Free? 

Looking ahead to 2022, I want to be more intentional about throwing every extra bit to our debt — even if it’s just $10 or $20 bucks.

We don’t have a debt payoff date. I wish we had.

But we don’t exactly have a regular debt snowball every month.  

All of the money going toward debt is from extra income from extra jobs. My husband’s job is our main source of income and it covers all our living expenses. There is no extra money after that.

If we want to pay debt, we had to find other ways to make money.

Our extra income is irregular and/or still in the growing phases, so it’s hard to tell how much we will make month to month.

Either way, we’re still in the fight! Hope you are, too!

Keep at it!