Baby Step #2: Debt Snowball

Baby Step #2: Debt Snowball

If the title didn’t give it away, we have officially hopped on the Dave Ramsey bandwagon.

Mark and I are getting married in December with plans to start a family in the next couple of years, but being in debt makes me uneasy. In addition to the mortgage we just acquired a few months ago for our condo, we have student loans and consumer debt to pay off. I am not as worried about the credit cards because we usually pay those off pretty quickly. I am, however, worried about the more than $100,000 in student loans that we have in total (yay! Master’s programs) that we need to pay off. I have spoken to colleagues around my age (late twenties, early thirties) about student loans, and it is really keeping some people from starting a family, buying homes and doing whatever else they had planned on. Debt is putting lives on hold.

I don’t want to put my life on hold for very much longer because I feel like it would force me to make decisions I would not ordinarily make. For example, I don’t want to move out of our house and out of Chicago until we have paid off our mortgage and built equity because I don’t want to lose money. That would mean not moving to and raising our kids in North Carolina, where we would be closer to family and friends, when it comes time to start residency seven years from now. That would also mean only raising two kids instead of the four we planned on. It would also mean not going on vacations and having to worry about saving money for each child’s college education. And, without the equity built in our current home to take with us, even if we did manage to move to North Carolina, we would not be able to purchase a plot of land and build our custom estate with cash. Basically, being in debt is going to force us to settle for things in life that I don’t really want, you know, second best. I do not do second best.


With $1000 put away as an emergency fund (baby step #1), Mark and I have been hustling on this Debt Snowball. The Debt Snowball is a method of paying off debt in which you start with the smallest debts first, paying minimum payments on all other debts. Then, when the smallest debt is paid, you roll over what you were paying on the small debt to the next smallest debt, and on and on until all the debt is paid off. The small wins are supposed to be an encouragement and motivation to keep going as opposed to following the Debt Avalanche method, in which you pay off the loans with the highest interest rates first. 

Side Note: You may be wondering how I can pay off my student loans while I am in Medical School, but I am lucky enough to be enrolled in a government-funded MSTP program, which provides a scholarship to cover my tuition and fees ($30,000 per semester) and a small stipend to live on. If you are interested in research and also interested in going to Medical School, this is a good way to do both, although it takes 7-8 years on average to complete the program.

If everything goes as planned, we should have our student loans paid by June of 2020 (the year I want to start a family) and our mortgage paid off 18 months later. Then we would be free to save for retirement for five years unhindered, and save for our custom home so that we will be ready to purchase with cash when we move. I am not playing any games this time. Furniture that hasn’t been used recently–sold to the highest bidder on OfferUp. The TV is gone, some small appliances and most of our clothes are gone, and we are planning to sell one of our cars that is paid off to get the ball rolling as well. I have been taking surveys, trying to get into focus groups and enrolling in Psych studies at the school. Besides mortgage, HOA, utilities, internet and insurance, everything else is paid in cash, and we are not taking a honeymoon until we are able to pay with cash.

Now that I put this out there in the world, I know that we are held accountable to follow through what we began. Updates are forthcoming. Dave Ramsey has a podcast and a YouTube channel if you all want to know more about this plan. He is a little bit tough with his callers, but it seems to work, so I am okay with it.


Cheers to making smarter financial decisions moving forward!


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