This Couple Paid Off $20,000 of Student Loan Debt in 2 Years. Here’s How
Nearly all of us have tried to make a budget at some point in our lives, right? But how often do we stick to it?
If an unexpected expense comes up, or if our refrigerator is nearly empty, do we keep following our budget or do we spend more money than we planned?
A New York City couple decided to do the hard work of both creating a budget and sticking to it -- and it helped them pay off $20,000 of student loan debt in less than two years, reports Forbes.
Plan Ahead and Stick to the Plan
Johnny and Joanna, the couple profiled in the Forbes story, made their budget work by planning ahead as much as possible.
Johnny and Joanna also decided to stick to their budget no matter what. The first month, for example, they realized that they had budgeted too little money for groceries. Instead of spending more money, they ate ramen and peanut butter to make their funds stretch -- and then adjusted their budget for the next month!
Include Room for Unexpected Expenses
A good budget has to reflect the life you’re actually living.
When Johnny and Joanna realized they didn’t have enough in their food budget to last through a typical month, they adjusted their budget to spend less on entertainment and more on food. After all, you’ve got to eat!
Likewise, they made sure to have a budget line for unexpected expenses, which they label “everything else.” Johnny and Joanna have two small children, so they know no matter how hard you plan, you sometimes run out of diapers or need to make an extra visit to the pediatrician. That comes out of the “everything else” fund, which helps keep their spending on track.
By planning ahead and preparing for both the expected and the unexpected, Johnny and Joanna were able to pay off their $20,000 student loan debt and start saving for the future.
Making a budget is a tried-and-true financial strategy, so if you’ve got debts of your own, use this couple as inspiration to make your own budget and pay off your debt for good.
Want to know more? Read the full story at Forbes.
Your Turn: Have you ever tried sticking to a budget? How did it go?
Nicole Dieker is a freelance writer focusing on personal finance and personal stories. Her work has appeared in The Billfold, The Toast, Yearbook Office, The Write Life and Boing Boing.