Dianna Sawyer recently decided to pay off her student loans. Here’s how she and her partner made this values-based financial decision.
It’s been a few days, but I keep logging into my student loan account, just to stare at the principal balance.
I’m in shock, and a maybe a little disbelief, which may explain why I keep checking it, the way a new mother might keep peeking into the nursery to make sure the baby is still in the crib.
And speaking of a new mother, I’m recently became one, which is really where our story begins. Years ago, my husband and I were up to our eyeballs in student debt ($60K from me, $45K from my husband). While to some these numbers may not seem high, it’s worth noting that we have liberal arts degrees, and my master’s degree is in creative writing. We willingly pursued our educations, but didn’t graduate with any certainty of earning a lot of money. It was fine for awhile: We paid our monthly minimums and never passed up an opportunity for a better job.
At some point, though, I got impatient. We had started talking about kids, but both of us just couldn’t see how we could afford to have a baby when we were still spending $800/month on loans. And the emotional weight of all that debt was taking its toll, too. We were putting off creative pursuits, opportunities to travel, and any possibility of working for ourselves because those loans were always there, demanding to be paid.
So we decided to dig in our heels, stare the monster in the face, and start paying them off faster. We overpaid every month, starting with my husband’s loans because his were broken down into smaller amounts that seemed more manageable. Finally, his were gone, and we were left with my balance. So we really hunkered down. Tracked our spending. Said no to things. Paid a ridiculously high amount each month to start seeing some progress.
By last month, the balance was down to $27K. While this was exciting—less than half from where I started!—it still seemed so daunting. At the pace we were overpaying, we were on track to have them paid off in two-and-a-half years. But there was something else looming: our new baby. How could we possibly think about saving for our baby’s future when we were still paying for my education?
It kept us up at night.
We looked at our emergency fund, which was nice and healthy, but disorganized: It was a catch-all for every goal that seemed to be “in the future.” The account we looked at when we talked about buying a house, or taking an amazing trip, or starting our own business. The ultimate rainy-day fund. And we were proud of this fund—it’s what we thought we were supposed to have. A giant, safe, cash account for the zillion “what ifs” in life. And yet that giant account sat there untouched, while we lost sleep over our loans.
Finally, we had some real talk. With each other. With a financial planner. With other Grownups. We knew the only “right” decision was the one that aligned with our values and priorities, and that we were the only ones who could define them. So we did.
Or, perhaps I should say, I did, when finally I blurted out, “It’s more important to me to not have any debt when the baby is born than to have a down payment for a house.”
We sat with that for awhile, and together agreed: We could pay off the loans now and save for the next few years to replenish the account. We’d be back where we started, but with one critical component: no more emotional weight of student loans.
And that’s what we did. We dipped into the catch-all fund, scooped out a big chunk (leaving, of course, enough to get us by if we really needed it in an emergency), and sent a big, fat check to my loan provider. I received a confirmation email, but I still keep checking to make sure it’s really $0, and to revel in the joy of this Grownup moment.
You know, the way I catch myself peeking into my baby’s nursery. Just to check. And then to smile.
While working on the curriculum for Society of Grownups, Dianna can usually be found listening to Motown and taking up all the white board space.