Why 24k a Year Is Enough for Us

In the last post, I mentioned our current level of income.

To review, my husband makes 24k a year, and we plan to use all of his income to payback the loan.

That means we are going to live off of what I make, which is a little more than just a quarter of what he is making.

I can see a big question mark in your head right now. How do we survive with about 6k a year for both of us? Or even, how did we survive with 24k, and planning to pay off our debt at the same time?

The question mark will probably inflate a little after I tell you that we were living very comfortable before the plan started, and after the budgeting, we can make it without starving ourselves.

The thing I haven't mentioned was that, we are living in Vietnam.

Where we live is actually a key point that holds up the entire plan.

Because in Vietnam, 24k a year doesn't put us among the royalty, but it does give us a very comfortable life. My husband was comfortable taking the job that he has now because he can totally support himself, plus a freelancing wife with unreliable income in toll. We had a wedding and we fully furnished our apartment with this money.

And what I'm making, what we are planning to live by after the plan starts, is actually an average level in this country. We will discuss the cost of living in Vietnam in a later post.

Don't worry about things that you can't control. Worry instead about things that you can.

You may be tempted to ask why we are living in Vietnam and trying to pay back student loan in the US. Some might suggest that if we both move back to the US, we may be able to make a lot more money, and pay off the loan much faster.

The thing is, we did try to look for job back in the US. We both have college degree, my husband with a master. However back when we got out of school with no network and no experience, one studied finance and another public administration, the job environment just wasn't so friendly to us. My husband works three part time jobs, totaling up to about 70-80 hours to barely survive. I also worked as a waitress and cashier and make just enough for rent and bills.

Moving to Vietnam, we immediately find jobs. In between places, the waiting period is about a month top. At some point, my husband got two offers within a week of each other, and get to pick and choose. And I'm not talking about jobs that can support us, but also jobs that lead somewhere. Jobs that we can proudly display on our resume, jobs that gives us skills and experiences to brag about in interviews. It's simple: just speaking English here is an asset. This asset gets us started in fields that we wouldn't be able to get our foot in the door back in the US. We wanted to gain experience and reference first, and hopefully when we move back to the US, these will help us move on with our career. We just chose a different jump start from everyone else.

Now with a couple years of experience, we can move back to the US, but we may or may not find good paying jobs to support ourselves and to save toward the loan. We can try really hard, but it is something out of our control.

What we can control, however, is our budget and cost of living. Since we were living very comfortable before, there is room to cut back. And there is cash to be saved up towards the loan.

Therefore, we chose to focus on what we can control, our cost of living. Our plan is to cut back and pay back our loan before anything else. Our goal is that, if and when we come back to the US, we will be debt-free.

The Beginning of Our Journey

Hi world,

This blog is created as a way of documenting a new journey that we are about to embark on, one that we have no idea if anything would go according to plan yet. It is to document the process, and also for us to hold ourselves accountable to our goals and plans. 

It's the story of 24 versus 100

$24,000 - is what we are currently bring in. Our joint income as a couple. Annually. 

$100,000 - is what we owe in student loan.

You read that right. We are trying to clear about $100,000 in debt. While making about $24,000 a year.

Are we crazy? Perhaps. Is it Possible? According to our current calculation, it is. Will we make it? We have no idea yet. Let us show you the simple calculation that we did.

Ok so $24,000 is not really our total income. Basically that what's my husband is making. I didn't count mine yet because I make just a little more than a quarter of that, and it fluctuates because I'm a freelancer.

Oh, and we are planning to do it in about 5 years. Hopefully sooner.

Basically, our plan is that we will throw whatever my husband makes into the student loan. And we are living off of my income. Of course since we want to pay off the loan as fast as we can, both my husband and I will try to increase our income one way or another. I will pick up more freelancing jobs, he is actively looking for a better paid position and side jobs as well. But we can only try and cannot guarantee that we will be able to increase our income and by how much. So 24 is where we start.

Based on that, we want to put 24k a year toward the loans. From what we gather, the loan amount plus interest is about $100,000. Take that, dividing by 24k, and we are looking at a 5 year period. It is not going to happen overnight, we know that, but still much faster than the usual 10-20 years as we often seen from student loan payment plan.

Our Game Plan

The first steps we need to take is to understand our finances, both debts and assets.

We need to look at all our savings and cash. Perhaps set an emergency funds, then see how much we can put toward the loan without putting ourselves in a dangerously deprived position.

We also need to look at exactly how much we are owing and the interest rates on all the loan. We are planning to save on interest so all the payment will be put toward the loans with highest interest rate. It's not a new concept.

Beyond that, we are also a newlywed couple. We promise each other to not let the plan ruin our relationship in anyway. We want to pay off the loan as fast as possible, while not depriving ourselves of things we enjoy like foods and traveling. With that, we need a proper plan of changes we can make to our budget and keep ourselves on track. 

And so it begins!