HomeDebtA $10,000 decision

A $10,000 decision

I made a bold move last night and decided to transfer $10K from my savings account to my checking account. After much thought, I have decided it’s time… Time to kick Sallie Mae to the curb. That’s right. I’m going to be aggressively paying down my debt so I will be debt free by the time I get married.

I currently have just under $24,000 in my savings accounts. They are broken up in to three subsections. A $10K emergency fund, a $10K extra savings, and a $4K wedding fund. I had been hoarding cash and saving as much as I possibly could because I was scared of the unknown.

I knew I had more money in savings than I needed, but seeing my bank account grow every month really gave me a peace of mind. While there is definitely security in having a large sum of cash easily accessible, there is also security in being debt free. Beginning my marriage with no financial obligations to anyone (but me and the wifey) will be an incredible feeling. Furthermore, I have a responsibility in this relationship to not be a burden. Girl Ninja is debt free, and I truly believe I owe that to her as well. She doesn’t care if I pay the loan off or hold on to the cash, but I think two  years from now, she will be appreciate, and understand, that this was the right decision.

By making this lump sum payment, my student loan balance should fall just below the $5,000 mark. Do you realize what this means? It means the interest I’ll be paying towards this loan is going to drop from $84/month to $29/month.  That makes for a $55/month savings. Booya for savings!

I’m not going to lie and pretend like it wont suck to depart with such a big chunk of change  (I mean, I worked really really hard for that money), but in the end I know it’s the right decision. And if for some reason the crap hits the fan, I’ll still have my $10,000 emergency fund as a first line of defense.

It’s going to feel SOOOOO good to be done with Sallie Mae in just a few short months. I can’t wait!!!!



  1. I have to agree with your choice to get rid of that debt. I'm sure that money you had saved up wasn't earning as much interest as your Sallie Mae was draining you. For something that has been irritating you for so long, I'm surprised you didn't do it sooner.

  2. So long as your job is relatively secure and you have at least 3 months of expenses in savings, I think this makes sense. (Suze Orman says you need 8 months, but she's slightly insane.)

    • only slightly?! She says to save that 8 months (which would take a normal family a LONG TIME) at the expense of paying down expensive credit/debt…tres insane.

    • My position is pretty secure and have 6 months in the bank if for some reason something goes wrong. Hopefully I don't have to use that Efund though 🙂

  3. I have done the happy dance of joy for you! You and Girl Ninja are off to SUCH an awesome start together; I'm really happy for both of you. You and GN will be able to build up and far exceed that amount in no time. Great job Ninja :D.

  4. Yeah, I plan to pay mine off as well. I only owe a little over $5,000. My plan was to pay them off with my income tax return ( I know, I should be getting one, but….) but that money was put towards other debts. By the end of the year I will be debt free, everything except the mortgage.

  5. Wow, I knew there was an earthquake in San Diego yesterday, it must have been Sallie Mae crying over the interest she will be losing..Congrat!

  6. Hooray! Congrats! I agree that this is a great decision for both yourself and GirlNinja 🙂

    I’m a cash hoarder, too. Approaching 10 months in my E-fund…but I want 1 year, even though my job is secure lol! Call me crazy, but it makes me feel safer (but EQs don’t!)

  7. Are you guys buying a house or anything post marriage? because that $10K may have been really useful for a down payment?

    • We definitely will look in to buying a house, but I would prefer to do so with no other debt. I know by paying off my school loan it will delay the length of time before we can purchase a home, but I think it's an okay tradeoff and shouldn't take too much longer.

  8. You're my hero…for real 🙂 I wish I could do that right now, instead I'm still in the savings mode and in default for the loans so hopefully I can clear that up sometime in the next 2-5 years.

    Congrats and good luck to you both on your marriage! She's one lucky girl!

  9. Yay! THE best move! It shows how much you honor Girl Ninja, and how much you've really thought about this! So happy to hear that you'll be shedding that darn Sallie Mae! Don't worry, before you know it you'll have that savings built up again, and you'll have Girl Ninja helping this time!

  10. I did the same thing last fall. I had paid off all my credit cards and my car and I was hoarding cash. I saved over 10k about 6 months or so but I still had 13k student loan debt. I was on the fence about paying it off, on the one hand I had 10k in the bank, but on the other I was still not truly debt free.
    Finally, one day I said f*** it. I took 9k and put it towards the student loan. I was also going to take any money that I was going to use for savings over the next few weeks and put it all towards my student loan until it was gone for good.
    I felt good, but it was a bit of a nervous time going from 10k in the bank to 1k. But I stuck it out, it took maybe a month to pay down the other 4k and it was gone forever! That was my final debt and I was truly debt free.
    After it was all over I was surprised how fast my savings grew again after taking such a big hit. it is 6 months later and I am almost at the 10k mark again.
    In the end it was the right decision and I think you will agree after the loan is paid and out of your life forever.

  11. Congrats man…I think it's cause you brought chuck norris along as your sidekick. On a more serious note though, if you're like me (not saying you are) I take a long time to make big decisions (weighing pros/cons and researching) but I always feel 100% about them after they're made! hope that's the case for you.

  12. What a great choice. It will feel really good when you pay off your student loan. If only I were that smart when I was a young'un…I'd be a millionaire by now 🙂

  13. Congratulations on becoming debt-free and on your upcoming marriage….being debt-free is an incredible way to start out a marriage.

  14. As being part of a marriage where we have little debt (I am still paying off an apartment that I bought pre marriage, but really my tennant is doing that, so I don't consider it a debt as such) it is toally liberating to be debt free. My husband has been able to stay at home with my son for nearly 5 years because we have no debt. It gives you so many choices. $84 a month in interest? that's over a $1000 a year that could be spent on so many other things – including that pony!

  15. I think you made the right choice, for both of your futures! Especially since you'll still have some cash to fall back on in an emergency. Got my tax refund and we are thisclose to paying off our CC debt — paying off ANY debt feels great!

  16. Yay! That is great news and I think you'll feel really good about getting it paid off. Don't be scared about the savings, you'll have enough… wayyyy more than I do right now!

    Also, I want to apologize for not commenting on your blog as of late. So little time in a day! I read your posts daily and haven't forgotten about my favorite Debt Ninja blogger (ok, so you're the only DN-blogger but still my fave). Can't wait for that day when you're DEBT FREE!!!!

  17. Great job!!! Trust me you made the right decision and I am so glad you shared this story with everyone.

    and Girl Ninja – will definitely be pumped.

  18. Great job!!! Trust me you made the right decision and I am so glad you shared this story with everyone.

    and Girl Ninja will definitely be pumped.

  19. […] $10,000 Decision at Punch Debt In The Face, but really he talks about the upcoming wedding a lot. […]

  20. That's great! I think you're on the right track here, and Girl Ninja will most definitely appreciate not having that debt on both of your shoulders when you're married.

    I wish I had $30,000 socked away in a savings account so I could pay mine off before we get married next month. :-p

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