President Barack Obama was on Late Night with Jimmy Fallon back in April 2012. I watched him slow jam the news with Fallon and talk about student loans during his interview. On the show, the President says he and the First Lady paid off their student loans eight years ago. Only eight years ago? I said to myself. I couldn't believe it. It was refreshing to watch our President speak so openly about his debt. It encouraged me to know he paid it off only recently, and that he was unashamed in talking about it.
I graduated from medical school in 2004 with over $100,000 worth of debt. A physician colleague of mine had almost half a million in debt she combined with her husband, also a doctor. My own debt included mostly student loans, but also included a car loan, and many credit cards. When I met my husband, he was taken aback by my debt, but he wasn't especially surprised. It is expensive to go to school, even a public medical school as I did, in America.
My husband and I paid off our student loans and various debt one year after we married, six years after I graduated from medical school. I could not have done it without him. I met him during the last year of my medical residency. He was really the inspiration for our becoming debt-free. One of the first things he told me while we were dating was that he would be happy never to use a credit card again. That really lit a fire in me and made me love him more than I already did. We were on the same page, but he was more forthright about his goals. He was the most likely of the two of us to make it happen.
After 4 years of internship and residency, my salary as a real doctor shot up and it was tempting not to spend all that new money I was bringing in. There were many times I threw little tantrums unbecoming for a woman my age over things I wanted to buy, but had to wait on and save up for. I wanted them now. I deserved them, god dammit, after all the training I went through. It isn't fair, I'd say to my beleaguered husband. All my doctor friends drive nice cars and live in homes with yards and more than one bathroom. Why do we still live in a one bedroom apartment and take the subway? I would come down eventually from my angry tirade. It usually happened once a month but less frequently as I noticed our debt shrinking.
We started our debt-free saga by putting together our debts in a chart, listing them from smallest amount owed to largest. This made me feel guilty since most of the debt was mine, but we were stronger together than separately attacking our individual debts on our own. We planned to pay the smallest debts first. I tried paying off debt in order of interest rate, but the psychological benefit of paying off a smaller debt first, even if it was only $50, was encouraging. After a debt was paid, we would cross it off the list. We would pay off all minimum payments due for all debt each month, and set aside as much as we could from our take home income to pay off the smallest debt first. After the first debt was paid off, the money we would have taken to pay off that minimum payment due would snowball into the next debt owed on the list.
We told everyone we knew what we were doing. This put some people off. Not everyone likes to talk about money. Our families were supportive. My family reacted first by saying, "Why would you want to pay off your debt? Don't you want a house?" But I felt strongly about what we were doing. We listened to money-minded podcasts warning us most of our support network would find it strange we were living on less than half of what we took home and putting it toward our debt every month. Though he is not religious, my husband listened religiously to The Dave Ramsey Show, and I listened to The Suze Orman Show for motivation and inspiration. I also read a book by Kimberly Palmer (who writes for U.S. News and World Report about money and finance) which was helpful because the author and I are around the same age.
My husband put together a poster on which he drew a rocket made of squares. Each square represented $100 worth of debt paid. We would fill in a square with a colored marker for each debt paid. I saw that rocket poster every day. It was taped to the door of our coat closet, so it was impossible to ignore.
Once we got to the top of our rocket ship, I colored in the last square as my husband took a picture. It was truly a wonderful feeling. An enormous weight lifted off, and a hard lesson was burned into my consciousness. I don't use credit cards now and probably never will again. We still take the subway and live in a one bedroom apartment, but we're happier and debt-free for it.
