Re-Posted from June 19, 2020
On June 30, 2019, I graduated from my residency program in emergency medicine. On June 16, 2020, less than one year later, we made our final student loan payment. It felt incredible to finally say, “Good riddance!” to over $172,000 of student loan debt. This blog is about how we managed to be debt free apart from our home mortgage less than one year after finishing medical residency. Just a disclaimer, no part of this is meant to come across as boasting. Rather, Genae and I have worked hard towards this goal for nearly 8 years, and want to celebrate by recalling this journey! We also hope this will offer encouragement and guidance for others who aspire to live debt-free.
“A task without a vision is mere drudgery. A vision without a task is but a dream. But a task and a vision, therein lie the hope of the world.” – Inscription on a church in Sussex, England
In 2012, Genae and I were married after returning from a year of overseas missions with the World Race. That previous summer, before marriage and before starting medical school, we were broke and in love! I worked at Caribou Coffee and saved up months’ worth of wages to scrape together enough money for a wedding ring. After Genae moved to Minnesota, her first and very brief job was at a call center selling magazines. She came home in tears the first day, grateful that no one bought a magazine from her, and the next day she very apologetically had to quit for moral reasons and then found a much better job doing landscaping. We were married that June and I started medical school at the Mayo Clinic two weeks later. We were living paycheck to paycheck, and, for the first time, took out student loans to allow me to go to school.
It was around this time that we were first “introduced” to Dave Ramsey. I remember reading his book, “The Total Money Makeover”, and being inspired by the vision of one day being debt free. Often, when Genae and I were driving in the car, we would listen to Dave Ramsey on the radio. Being the saps that we are, we almost always teared up when we listened to people do their “Debt-free scream”. Few things are better for a young married couple than listening to other people talk about how debt and financial strain wrought havoc on their marriages, or to hear the joy in their voices when they celebrated becoming debt free.
Needless to say, early on in our marriage, we caught the vision of one day being debt free. We realized that though I could effortlessly take out thousands of dollars of student loans, every dollar made our prison of debt a little stronger and made the hole we would need to dig out of a little deeper. For those of you taking out student loans, realize that every dollar you spend now will require you to pay back two dollars later, as interest relentlessly compounds with the passing of time. Do everything you can to save money and reduce your expenses now! It will take sacrifice and being counter-cultural.
“Nothing is worth doing unless it involves effort, striving, difficulty, and pain.” – Teddy Roosevelt
Having a vision of being debt free is not enough. Getting here took many sacrifices. We now look back on these sacrifices as joys and often as a source of humor!
When Genae and I were first married, she had a brand-new sporty Hyundai Veloster. I had a 2006 Mazda 3 with rust above the wheels but no car payment. We lived within walking distance to my school, so, we started out our marriage by having Genae sell her car! Thankfully, I have a good wife who is understanding, and, one Craigslist post later, we watched a sporty car with a leather interior drive away from our rental house never to return.
Genae has always had the calling of being a stay-at-home mother, but one of the greatest sacrifices she has made is working tirelessly while I was a medical student to reduce the amount we took out in student loans. Her first job in Rochester had a pretty miserable work environment, and it was unbearably hard for her to drop our first son, Walter, off at daycare every day, but she made this sacrifice for the vision of one day being debt free. Thankfully, she eventually landed a much more enjoyable job working for Mayo in Public Affairs.
We also have had a strict budget since the start of our marriage. We employed the “envelope-system”, putting aside money each month into envelopes for various budget areas and trying to pay for things with cash. We definitely had arguments early on about discretionary spending, Genae for shopping and me for books! This problem was solved when we each had our monthly “shopping budget” of a $100. As a man, I know that I have a pretty incredible wife when she spends less than $100 each month on clothes, makeup, outfits for the kids, etc. The Salvation Army and Goodwill were our J. Crew and Polo!
In addition to having a strict budget, we did everything we could to be cheapskates. When we moved into our rental home in Rochester, it had been destroyed by the previous owners. There were exploded beer bottles in the fridge, years’ worth of burnt food in the stove, scuffed walls, and a flooded basement. We negotiated with our landlord to have two months of free rent for cleaning and repairing the home rather than having him hire a professional service. When we moved out four years later, we received another two months of free rent for being the real-estate agents and helping our landlord list and sell the home!
One of the funniest stories is that when we moved to Alabama for residency, we needed a second car, as I no longer lived within walking distance of work. Taking Dave Ramsey’s advice, we decided to pay for a beater with cash. We found a GMC Acadia with 165,000 miles on it for $5,000 and enough space for all of our kids. This transaction was to take place on the side of the road in middle-of-nowhere rural Alabama. After clearing out the majority of our checking account to put $5,000 in an envelope, my brother-in-law, Evan, dropped me off on a back-country road where I was going to meet the seller. Unfortunately, Evan couldn’t stay as he had an errand to run, so he handed me a pocket knife from the glovebox and said, “Be safe and good luck!”
Thankfully, armed with my two-inch pocket knife and $5,000, I was able to purchase the car without any violence. Unfortunately, the car passed its initial road test and mechanic inspection, but two months later we discovered it was possessed. As we drove down the road it would intermittently have every light and turn signal flash simultaneously as if crying out for help and then the power steering and engine would cut off. I can’t tell you how many times we did the, “glide of shame”, muscling the car to the side of the road sans power steering, where it would then start back up again after a few minutes and temporarily drive just fine.
After making the equivalent of a monthly car payment in repairs, we traded the Acadia in and bought a used minivan. We told the dealership that the car was nearly undriveable, but they said that as long as we got it to the lot, they would accept it as a trade-in and give us $3,000 for it. I won’t forget praying that we would actually be able to physically drive the Acadia to the dealership, and then being so relieved when we made it all the way into the parking lot!
“The borrower is slave to the lender.” – Proverbs 22:7
Though some of these stories are humorous, our financial situation often wasn’t. We felt the pain of debt. My heart sank as I watched our > $100,000 in student loans accumulate at 6% per year. We were accumulating more in interest each month than nearly twice our home mortgage payment in Alabama.
When we first moved to Alabama, I didn’t realize that I needed to place my loans in an income-based-repayment status. One day, soon after moving, I received a text from Wells Fargo that we had over-drafted our account. We had just moved, and I wasn’t going to get my first paycheck until the end of the following month, and my student loans kicked into full repayment, sucking $2,000 from our checking account and over-drafting us in a moment. We had no savings and not enough emergency fund. I felt the turmoil of being a husband and father-of-two in a new state with no paycheck, no money, and no good way to provide for our family. I did something I hope to never have to do again – I took out a line of credit from Wells Fargo to cover the unexpected student loan payment, and then put my whole first residency paycheck towards it to close it out before interest began to accumulate at an exorbitant rate.
Residents make around $55,000 per year. With multiple kids and Genae staying home to care for them, we did not have a lot left over in the budget to dig us out of six figures of debt. I searched for any way I could, while a resident, to make extra money for us as a family. My intern year I used my abundant free time (sarcasm) to be the on-field physician for high-school football games. My second year, I could finally start to moonlight internally. Third year, I had around five days off per month, and I would use at least three of them to moonlight at small emergency rooms in rural Alabama, often night shifts. I also worked as a flight physician for a fixed-wing transport medivac company, and flew to El Salvador between residency shifts to make extra money and provide medical care. One of my favorite experiences, and a quintessential Alabama one, was to be one of the physicians for NASCAR’s Talladega race! I think I would do that one again just for the cultural experience. Roll Tide.
There were many sleepless nights, quick turnarounds, and weeks where I felt like I was never at home because of these moonlighting shifts. But, we didn’t spend the extra money on vacations, house renovations, or fancy things – nearly all of it went straight to student loans. And, sadly, often just to the interest on the loan and not the principal. Talk about feeling like a slave – working endless hours on top of an already busy schedule, just to keep the interest from accumulating. What a despicable system! Debt is a prison, sucking away life and time with family!
The Final Lap
“Begin with the end in mind.” – Stephen Covey
In February of 2019, we re-financed our government student loans to reduce the interest rate from 6.8% to 4.3%. We went through So-Fi, and had just over $172,000 in loans at that time. It would have been well over $200,000 were it not for all of the moonlighting done throughout second and third year of residency. In 2019, I signed on and started work as a community ER physician with the Mayo Clinic Health System in Eau Claire, Wisconsin. We put my entire sign-on bonus to student loans. When we sold our house in Alabama and made $20,000, we put all of it to student loans. When the government gave us money back after filing income taxes (mostly because we have so many kids!) we put it all towards student loans.
For the past year, I have worked overtime hours each month, and all of that has gone towards student loans. When we moved to Wisconsin, we bought a really nice home for a mortgage that was probably one-fourth of what we qualified for. Because of that, every month for the last year, more than half of our paycheck has gone straight towards student loans. This week, we made the final lap, and joyfully sent in our last student loan payment. We now have no debt apart from our mortgage!
“Gratitude turns what we have into enough.” – Aesop
It feels really good to be debt-free and to have accomplished this goal. But, we are far from done. The next item on our debt snowball is our home mortgage and setting aside money for our kids’ education. One of the reasons that we aspire to be debt free is because we do not want to have to work for money. Dorothy Sayers says it so well, “The fallacy is that work is not the expression of man’s creative energy in service of society, but only something he does in order to obtain money and leisure.”
The necessity of money is a reality, but we want it to be a secondary one. We want to work from a sense of vocation, calling, and service, not because we’ve gone into debt for a bunch of things we don’t really need.
Genae and I are incredibly grateful to the many people who have helped us on this journey, most importantly to our families. We were blessed to finish our undergraduate degrees without debt because of the hard work of our parents (and because Genae achieved multiple scholarships)! We have been blessed by their wise guidance, examples, and encouragement. We have experienced the financial generosity of friends and family along the way who have poured out on us far more than we deserve.
We are grateful for the opportunity we now have to be generous in return. One passage, which I think of often, speaks to a reality far better than the American dream of materialistic accumulation, “As for the rich in this present age, charge them not to be haughty, nor to set their hopes on the uncertainty of riches, but on God, who richly provides us with everything to enjoy. They are to do good, to be rich in good works, to be generous and ready to share, thus storing up treasure for themselves as a good foundation for the future, so that they may take hold of that which is truly life.” – 1 Timothy 6:17-19
“Where there is no guidance, a people falls, but in an abundance of counselors there is safety.” – Proverbs 11:14
Where are you on your journey to live debt-free? We would love to help encourage you, please reach out to us! It is a long journey but a worthwhile one. Here are some of the tools and resources that have been most helpful to us along the way: