Updated on 07.29.08

Another Major Milestone on the Road to Financial Stability

Trent Hamm

This morning, my wife and I sent in the final payment on her student loans, which was our primary personal finance goal for 2008 and our highest interest outstanding debt. It felt good. Really good.

Our next personal finance goal is to pay off my remaining student loan, which has an outstanding balance of $14,800 or so. This was the goal we had penciled in as our primary goal for 2009, intending to pay it off by the end of that year. Paying off that debt will leave us with only our mortgage as debt.

Rolling back the clock just twenty seven months really puts this financial turnaround in perspective. My wife had roughly $24K in student loans, all told (now paid off). I had $10K in one student loan (already paid off) and about $25K in another loan (now below $15K). We also both had significant amounts remaining on our separate car loans – I owed at least $5K on my truck at that point (now paid off), and she owed at least $2K on her car (also paid off). We also had a combined $17K (approximately) in credit card debt.

Adding that up means we’ve paid off a stunning $68K in debt in a little over two years. For comparison’s sake, our debt repayment is roughly equal to our 2006 income and not too much lower than our 2007 income, which should give a good idea of how hard we’ve pushed the pedal to the floor since our meltdown.

Now, we just have the remainders of my single remaining student loan and a mortgage to pay off. That’s all.

How did we do it? I’ve written about this a number of times, but it’s just as true now as it was then. We took a hard look at our financial situation, realized we were simply spending far more than we earned, and pushed ourselves – and each other individually – to turn that ship around. We sold off mountains of video games and DVDs and trading cards. We adopted much less expensive hobbies. I began to look seriously at alternative avenues for raising money in my spare time – at first, it was repairing computers, and then I began to have some success as a writer as well. We started preparing food at home instead of eating out most of the time. We made a debt repayment plan and started snowballing our payments, meaning as soon as one debt was paid off, we transferred that whole payment as an extra payment on the next debt.

The most important thing of all, though, was realizing that we needed to turn things around for each other and for our children. Spending far more than we earned was creating a dangerous path for our future, one that simply couldn’t continue.

We use each other as inspiration to push ourselves harder to save money. If my spouse has the financial strength to do it, so do I. If our children have a life of rich and full experiences and they’re emotionally centered, then we’re doing our jobs as parents, even if they don’t have the latest and greatest of everything.

But, for now, it’s time for us to celebrate a little in the way we’ve become accustomed to. A pair of steaks from the freezer are thawing and soon I’m going to go harvest some lettuce from the garden and maybe a fresh tomato or two, plus there’s a bottle of homemade blackberry wine that will be opened up and poured as a dessert drink. An amazing dinner, not much different than what we would have spent a lot of cash on a few years ago, but instead prepared and eaten at home, together, as a family.

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  1. j says:

    Reaching a major goal like that (and early, I believe) is a fine show of what goals, planning, support systems, and determination can do.


  2. Erin says:

    What a tremendous accomplishment. Your children are really lucky to have such parents as you. And the two of you are really fortunate to have each other.

  3. Eric says:


    68K in two years is amazing! Even though that’s a lot of money, think of how that money could have been blown on other things that weren’t really important.

    I’m debt free except for my mortgage and student loans. I’ve got good emergency funds in place, so once I’m done with my Masters in December, I’ll be able to start hacking away at the student loan debt. It’s scary though as it’s just about at 100K thanks to private schools. Once I’m done with that, it’s on to the mortgage.

    I don’t think it will be too hard, the secret is to not get into anymore debt along the way and to attack debt like a cancer.

  4. Frugal Dad says:

    That is an awesome accomplishment! $68k in two years took a ton of sacrifice and hard work. Just imagine how good it will feel to finish off your student loan, and then attack the mortgage. Have you thought about paying off the mortgage early, or will you opt to put that money into savings?

  5. Kevin says:

    Good for you. My wife and I also had a milestone earlier this year – becoming completely debt free except our mortgage – and it feels really great. We also have a young son that turns one next week and it is great to know we are in pretty good shape financially. We can worry about raising him and not have to worry about money issues so much.

  6. Cathy says:

    That’s a fantastic achievement, Trent. Congrats to the both of you!

  7. Moneymonk says:

    I think that is the key! Having both spouses involved which causes more energy toward a common goal

  8. Trent Hamm Trent says:

    I should mention that $8K of that $68K was from cashing in a 401(k). The rest was purely from living cheap and working my tail off. If I can do it, you can do it.

  9. Matt R. says:

    Congrats on reaching one of your financial milestones! It always feels great to accomplish a major goal in life.

    I’ve recently reached one of my personal milestones this year by applying for a business license for my computer repair company…and (partly inspired by you) creating a blog about my experiences as a start-up at http://www.yfncg.com.

    If either endevour has a fraction of the success that you have had with your pursuits I’ll be a happy camper!

  10. Congratulations, Trent!

    Having followed you and your progress for the past year makes me a fan. And this feels like “our team” won the pennant.

    Enjoy and celebrate. You’ve earned it!

  11. Astonishing and inspiring! And to think you came up with a downpayment for a home in that time too!

    Congratulations, Trent. And thanks for bringing us along with you on the way.

  12. Amie says:

    Congratulations Trent! I just started reading your site a couple of weeks ago. I graduated last year and have just started my climb out of student debt. It’s really inspiring to hear that you and your wife paid off her loans. That’s just wonderful. Enjoy your steaks!

  13. Carlos says:

    Hey Trent-

    Cashing in “that” 401(k) was pretty short-sighted. You should have rolled it over to a traditional IRA (at Vanguard).

    It would be better to be still paying that pesky student loan and have that $8k in a tax-advantaged account.

    As a result of withdrawing the 8K at your (young) age, you were heavily penalized (did you not have to pay tax on the entire amount of the withdrawal as income + IRS penalties ?!?). That’s cutting off your nose to spite your face, if I’ve ever seen it…

  14. savvy says:

    Congrats on reaching such a milestone. As someone who also has student loans, I look forward to the day when my mortgage is my only debt. (Of course, I’ll start accelerating the payments on the mortgage then.)

  15. Sandy E. says:

    Everything tastes sweeter when you’re out of debt. I just went up to McDonald’s and got two hot fudge sundaes for $2.16 total.

  16. Onaclov2000 says:

    Congratulations, I need to find it in me to do the same thing, if I keep reading enough it’ll happen eventually, I am getting better at getting my debt paid off and all though.

    That’s great to hear your accomplishments, I hope one day to be able to say the same for my situation.

    Good luck with the rest of it, and do tell, do you intend to pay off the house as soon as you can once the other debt is gone?

  17. BonzoGal says:

    Many congratulations! I raise my glass of (home-brewed, bargain brand) iced tea to you. What a tremendous feeling!

  18. valerie dekam says:

    I think that is super! And I think putting it in perspective to your annual income gives us all a better feel for how much fat you trimmed and how many things you had to give up.
    Way to go and keep up all the good work you do.

  19. Jason says:

    Wow, that’s stunning! What’d you do to celebrate? Buy an XBOX and a Wii? Hah. (okay, just joking).

    I’m wondering how long it would take you to pay off the house at that rate. I’d be interested to see if you are considering that goal or if, once the remaining debts are paid off, you’ll just plow the payments into investing.

    Great job.

  20. dave says:

    way to go, but i don’t think this post is going to bring marjorie back!!

  21. Boyan Penkov says:

    Props, mate! Good luck with the next $15k!

  22. Lurker Carl says:

    Congratulations on reaching another goal! Keep up the excellent job with that accelerating repayment plan.

  23. Amanda says:

    Sweet! Many congratulations.
    Still wish you’d start the cooking blog though. That bit at the end reminds me how much I love reading about cooking. : )

  24. Pchan says:

    Congratulations! That’s a great accomplishment.

  25. Wow! I can’t wait to be able to say I’ve reached a milestone like that, and to be come so far in such a short period of time. You’re an inspiration to many out there who think that it can’t be done.

  26. Shanel Yang says:

    Super! Very happy for you, Trent!

  27. Monica says:

    Congrats Trent!!! Thanks for sharing your journey with the world. You’re an inspiration!

  28. MoneyBlogga says:

    Not only is that an awesome accomplishment ($68K?? Dang!) it’s also inspirational. We have some pretty hefty bills on our end to pay off, bills that I have mentally blocked out but will nonetheless still need to pay. You must be feeling verrrry good right about now!

  29. Eden says:

    Hey Trent, I was going to ask how much was from your 401(k) since I remembered reading about that here, but you answered it in the comments. That leaves $60K in in 2 1/2 years and that is an amazing testament to the power of changing your lifestyle around. Very inspirational!

    My pace is running behind yours so far, but I’m still less than a year into this and I expect to be earning more money going forward. I can’t wait until I can write a similar story. Well done!

  30. My congratulations for your big achievements. Hope you take all that debt into your stride and will soon be living in a fully paid for house.
    Your story is really inspiring and now I believe more than ever that we’ll be able to reach our goals too.

  31. Penny Squeaker says:

    Hey Trent,

    We’re proud of you. Keep cracking the wipe on paying off debt, and living debt free.

    We are totally debt free, no mortgage, no car loans, no HELOC or credit cards, never any student loans, etc….

    We’re a family of 7. By living frugal, we are able to live on half of my husband’s salary. Saving my salary for future needs ” retirement planning, etc..”.

    Savings bonds will pay for children’s educational needs, when earning their degrees online or distance learning.

    In which their be able to graduate w/o any student loans, like myself.

    It’s a major accomplishment, treat yourselves on a great milestone on this year’s goals.

  32. Katy says:

    Congratulations, Trent! That is awesome.

    You are celebrating in such a wonderful way, especially by not spending a big wad of cash.

    I have been thinking of how to celebrate my own financial success recently. When I reached my net-worth goal, rather than spending money on a fancy dinner out, I donated a percentage of my new net worth to a charity I care about. Coincidentally, my blog post today was about the same topic (www.moneytoliveblog.com).

  33. April says:

    Congrats, Trent. That is indeed inspiring. I bet that blackberry wine will taste mighty sweet.

  34. kellzzz says:

    Congratulations on that major accomplishment, Trent. I can only imagine the freedom you and your wife must feel by magnifying my own recent triumph (paying off the 6-year loan on my wheelchair van 2 months early) by a hundred.

    You’re a daily inspiration to me. Thanks.

  35. RDS says:

    Great news and congratulations. Have you considered setting up a meter on your website to show how much debt you and your readers have cumulatively paid off? I am sure that there are many other success stories out there.


  36. azwad says:

    Congratulations! You’re an inspiration!

  37. Michael says:

    I hate to be the Debbie Downer, but education loans are not a bad thing. I’m sure they were at interest rates much lower than your mortgage could ever be and yet you paid them off in full? While the balances are smaller and results are more immediate, in the long run you would be saving more by putting those payments into your mortgage.

  38. Shevy says:

    Aha, so you *do* make fruit wine! Cool. I bet I’m not the only one who would like to know more about your winemaking.

    And that’s great about all the debt you’ve paid off, but I’m also curious about why you cashed the 401(k) in and triggered the taxes on it.

  39. Good job, Trent! Congratulations!

  40. Kim says:

    Fantastic, Trent! Can’t wait to see where you are 2.5 years from now!

  41. Trent Hamm Trent says:

    I used a 401(k) cash-in for $8K of the total debt payoff. I used it right off the bat to take out a 29.9% credit card before I understood other strategies for lowering that interest rate.

    As for the education loans, the ones remaining are private loans with fairly high locked-in rates, substantially higher than our mortgage. They’re well above the 7% threshold I use to determine whether or not paying off that debt should be a focus.

  42. TRENT…


    DUDE…you are amazing.

    Not only does it take a lot of motivation to pay off that much debt that fast, but it takes even more to take the money you are saving and apply it to your existing debt. When I paid off my credit card last month (140 dollar monthly payment) I caught myself justifying several 140 dollar things saying “now that I don’t have a credit card payment I can afford it.”

    It is really hard taking that extra cash and putting it towards my other debt. That is what I admire you for.

    Congratulations. Right now I feel like doing the “I’m Not Worthy” bow down from the movie Wayne’s World.

  43. Venkat says:

    Did you and your wife put $15,500 ea for your 401(K)s(now that you are solo– how about solo 401(k) )and fund your Roth IRA $5,000 ea and 529 for both of your kids? Just Curious?

  44. DoctorS says:

    Wow! Congratulations! The amount that you knocked out in the last two years is amazing. It is totally inspiring because I am in mountains of student loan debt myself (100k) and its depressing when attacking it. But your story shows that anything can be done. I just started blogging a month ago and stories like this are what totally makes it worth it! Love you blog and hope you can check out mine!

  45. realtychic says:

    Way to go! I’ve enjoyed reading about your journey! I agree with the poster who said this makes it feel like “our team” won! Your success makes us all very happy!

  46. Congratulations, Trent. You’ve demonstrated how toughness and tenacity can pull you out of financial quicksand. $68K is amazing. There was a lot of sacrifice to erase that much debt. This has been a heroic accomplishment for you and your wife. Those steaks are well deserved. Good for you all, buddy.

  47. Matt says:

    Congratulations Trent, hearing stories like yours and a few other blogers keeps me motivated in the knowledge that the debt mountain is surmountable with effort.

  48. Moneyreasons says:

    True amazing, incredible focus on a task, and great follow thru…!

    I’ve never had that level of debt, but I do have a mortgage that I’ve been trying to pay down.

    I hope everybody realize the incredible concentration that is required to accomplish such milestones.

    Great site by the way, your articles are a step above most blog sites.

    Thanks for doing such great work!

  49. Antares Pacheco says:

    Trent, I want to cry reading this. My husband and I have about the same amount of money in debt right now, and reading your post really gives me some hope for our future and our daughter’s future. It won’t be as easy for us since we live in Austin rather than the Midwest countryside, but I know we can do it. You are a real inspiration to me. Thanks so much for writing The Simple Dollar.

  50. Rob in Madrid says:

    I have to admit that my wife and I are finding it tough to take frugality to the next level, we’ve been broke for so many years that I’m enjoying actually having some money to spend. Having said that we’re on track to get debt free next year.

    Regardless you’ve been a huge inspiration for my wife and I particulary on the eating front, I cook far more than I ever used to. Nothing beats stress like a few hours in the kitchen.

  51. clint says:

    That is great!! Keep up the good work. We teach this Snow ball debt pay off plan also. It worked for us and works even better if you have a lot of smaller debts you are paying on. I have used it on about 5000 clients and have seen it work each time as long as they stick to it.

    Great job!!!

    Clint Lawton


  52. Sam says:

    Congrats man! Sometimes, a very supportive wife is all you need to get rid of debt trap. I’m really inspired by your actions. Keep it up.

    Fix My Personal Finance

  53. moneysavingmama says:

    trent i have been reading your blog for about a year now and you have taught me so much just by following your story.

    Would you believe when i read your post this morning, I felt like I had cleared that debt :0

  54. B says:

    Congratulations! (Though I’m personally not a believer in snowballing low interest student loans.) So now, the big question is, how much of the fiscal reversal is “earn more” and how much is “spend less”?

  55. SANDRA says:

    STANDING OVATION from Ohio! I’ll even do a “wave” for you and your family! I read you so much AND you’ve helped us so much I have the same giddy feeling that I’ve paid off some of my own bills!

  56. Matt says:

    Congratulations, Trent! Saving $60K out of about $150K (sounds like about 2 1/2 years) is an amazing savings percentage! My fiance’ and I have saved over $40K this past year, and the feeling is amazing. It’s just the feeling that you can do something that others wouldn’t believe possible. Take pride, Trent! (oops, you already have!)

    @B: Trent originally mentioned that his student debt was over the 7% that I think is a good threshold for consideration on paying off or keeping around. I’m certainly of the mindset that no debt is good debt (as long as you have enough emergency funds). But I see where you’re coming from — I’d have a hard time wanting to pay off a 4% interest student loan! Even transferring debt to those “3.9% interest for life” credit cards sound appealing, sometimes.

    The snowballing plan is just a catchy way of saying “keep saving!” :)

  57. Trent Hamm Trent says:

    As I said above, our student loans weren’t particularly low interest. They were private and actually locked in at fairly high rates.

  58. Congratulations! I know what a relief it was when I sent in that last check for my own student loan. I had such a hard time believing it was paid off that I called about a week later to be absolutely, positively certain I was free and clear of Sallie Mae for good. :-) You and your wife have worked hard toward your goals; I wish everyone had your pragmatism and self-discipline.

  59. Marcie says:

    That is so great! Two thumbs up to you!! I love hearing about your sucess because it motivates me to get rid of my debt. If you can do it – why can’t I?
    Excellent dude!

  60. SimonD says:

    It’s great to hear good news like this given the current economic climate, well done! This is an example to everyone – get rid of your debts!

  61. Louie says:

    i fear the day i graduate college and my loans, with accrued interest sock me in the butt. but while i am here in college im preparing myself for a ultra frugal life after graduation, college is great minus the expense…it is a lot of trouble for someone in my position where financial aide for some unknown reason doesnt help and my parent cannot afford to help pay the way etc. all i know its going to be exciting starting off my life with 70 grand in student loan debt haha.
    happy birthday trent, have fun with your next thirty years.

  62. Congratulations! We also recently paid off our second-to-last student loan. We have about $16k remaining and are so looking forward to being free of it.

    It’s always fun and encouraging to hear of other people’s successes.


  63. Stacy6 says:

    Trent, what I like best about your blog (and this story of triumph, congrats!) is that you make it seem like anyone can do it if they’re willing to work hard enough on everything involved. So many books on the same topics give you the feeling that you have to get really, really lucky, and it doesn’t matter how hard you work. Along with a lot of practical ideas and good advice, you give me hope. Thanks!

  64. Susan in CA says:

    Hip Hip Hooray!

  65. partgypsy says:

    I have to say for my own debt reduction (3K left on a heloc) we are just going to say we took a big break. My mother and sister visited which they are rarely able to do. We went to the beach for the weekend and ate out a number of times, not our usual spending habits at all. So, pretty much all the money we would normally put towards the debt this month is going for this beach trip. Strangely enough I do not feel bad about the spent money as it was a very special time and really worth it. If anything it really reinforced I’d rather eat beans and rice but have these times with loved ones than live every day at a higher standard of living and miss out on those times.

  66. Dan says:

    Thanks for sharing numbers. This will help me sell my wife on the ideas I’ve been trying to explain to her (debt snowballing, living a more frugal lifestyle, etc.). It will make a good comparison for our situation and show her what is possible as far as income to debt ratio and how fast the debt can be paid off.

  67. A wanna-be Ph.D says:

    Congrats Trent and wife and kids!

    We devote my stipend to my student loans, and live off of his. I’m turning 30 this month, got $14,000 more to pay, so this seems to be a trend for almost 30 somethings. We’ll be checking on you with curiosity and motivation. I’m trying to graduate debt free, and the student loans from undergrad are the only things left.

    I disagree with others who say it is a good debt. Any debt can still accumulate interest and take away from your bottom line while you try to sleep at night.

  68. Erin says:

    Congratulations, that is awesome!

  69. Kym says:

    Hey Trent, just wondering how much you bought your house for? And how much down payment you made on it? In my area (southern california) I will be saving for many years all I can just to get up enough for a down payment, and I’m thoroughly impressed at your ability to do so while paying down that much debt! Congrats! I just came out of grace period on my student loans this February and have already knocked the principle down by 55%, and should have the remainder gone by April 2009. It started off at a high rate (7.22%) but right now it dropped to about 4.5% due to variable rates resetting lower, and getting an interest rate discount for “excellent repayment”, but as my only debt I can’t wait til it’s gone!

  70. Joe says:

    That is too cool. My wife & I are in the flip situation – we paid off mine while I was in the Dave Ramsey course and now we are targeting her school loan to be done by the end of this year. I’m not sure that we have been as aggressive as you guys have been – very impressive. Thanks for the update and encouragement.

  71. tightwadfan says:

    congratulations! I remember how good it felt to pay off my first student loan early, and how great it felt the day I paid off my last student loan and was debt free except for the mortgage. Almost there, you will feel SO GOOD when you’re done!!! Keep up the good work!

  72. Michael says:

    Congratulations! It took me about eight years to pay off out-of-state tuition for graduate school. Now you can move on to other financial goals.

  73. Charles G. says:

    Louis & Joel Kestenbaum/Fortis Property Group purchase Galleria Towers I, II & III from Los-Angeles-based Cannon Commercial. Financial terms were not disclosed but sources close to the transaction estimate the closing price was in excess of $300 million.

    “This portfolio retained consistent investor interest right through the credit crunch and its closing should send a strong signal about the existing strength of the Dallas investment market for high quality office product,” said Mr. Alvarado. “This was an attractive offering given the Galleria towers are irreplaceable, trophy assets and came with affordable and assumable long-term debt. This transaction also allows Cannon Commercial to enhance its Dallas-area presence, while leveraging the tax benefits of a partial 1031-exchange. This was a beneficial transaction to both parties who remained focused on completing a timely transaction.”

    “We acquired the Galleria Towers from Blackstone (which acquired them from Trizec Properties) in November 2006, and maximized value by aggressively pushing rental rates while at the same time increasing the occupancy from around 90% to 98%,” said Fortis Chairman Louis Kestenbaum. Louis Kestenbaum is the father of Joel Kestenbaum, also of Fortis Property. “The disposition of this asset furthers our goals of maximizing investor returns and geographically diversifying the holdings within our portfolio. We achieved close to 100% profit on our equity investment in the Galleria Towers over a one and a half year holding period, and attained similar returns on our recent sale of International Plaza Tower III across the Tollaway.”

    Built in the 1980s and early 1990s, the Galleria towers range from 24 to 26 stories tall and adjoin the Galleria shopping mall, as well as the four-star, four-diamond Westin Galleria Hotel. Amenities include on-site banking with ATM, security card-key access, conference facilities, a state-of-the-art fitness center, a leasing and management office and an independently-operated day care. The buildings are currently 98% leased.

    Fortis Property Group, LLC is a real estate investment, operating and development company. Its real estate projects include the ownership and management of Class A office and industrial properties located throughout the United States. Fortis currently owns two other Class A office buildings and an industrial property in the Dallas, Texas area. Nationwide, Fortis currently owns more than 20 properties, which contain over six million rentable square feet. Fortis Property Group CEO Jonathan Landau further indicated that Fortis anticipates raising a value-add real estate fund that will invest in Class A office properties in prime office markets throughout the United States.

  74. Clarice says:

    Louis Kestenbaum, now that’s a wise man that knows about the simple dollar! And I’m guessing that Louis Kestenbaum probably didn’t have to worry too much about student loans.

  75. Carmen says:

    Louis & Joel Kestenbaum/Fortis Property Group Behind $880M Sale in Boston

    Fortis Property Group is leading the “Northeast-based private real estate investment group” that has agreed to acquire the 1 million-square-foot State Street Financial Center at 1 Lincoln Street in Boston for more than $880 million, or $880 per square foot, according to sources familiar with the sale.

    The Brooklyn, NY-based Fortis and a group of other New York investors are expected to close on the 36-story office tower from a joint venture led by American Financial Realty Trust (NYSE:AFR) and an affiliate of IPC US Income REIT by the end of this year or early 2007.

    Fortis apparently set its sights on Boston following several high-profile Dallas deals where it agreed to pay about $280 million for the three-building, 1.4 million-square-foot office complex known as Galleria Office Towers in Dallas.

    Earlier in the year, Fortis teamed with Trimarchi Management, also from New York, on the nearly $100 million acquisition of two other Dallas office properties, Harwood Center and Saint Paul Place. It also invested in the $282.5 million purchase of JPMorgan International Plaza in Dallas.

    The addition of State Street Financial Center will build out Fortis’ portfolio considerably. The privately held firm headed by CEO Jonathan Landau is controlled by the Kestenbaum family. Joel Kestenbaum is the son of Louis Kestenbaum. Fortis manages some 3 million square feet in commercial properties and about 454 residential units.

    The group of investors joining Fortis in the Boston deal could not be learned. American Financial announced the pending sale last week, but did not identify the buyer.

    American Financial, a Jenkintown, PA, REIT decided to formally shop the 36-story tower in the last couple of months. The company is pruning its portfolio and repositioning itself. The REIT paid $705.4 million or $688.84 per square foot in February 2004 to acquire the property. Later that year, it sold a 30% stake to an affiliate of Canadian REIT IPC US Real Estate Investment Trust, for $60.3 million.

    The building is fully leased with triple A credit tenant State Street Corp. occupying most of the building under a lease that runs until 2023. State Street also leases the property’s 900-space garage on a 20-year triple-net lease.

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