At this point in the narrative, I wish I could tell you that we got out of debt. But we didn't. In November 2012, we had approximately $65,000 in savings. We had saved this money over the past few years, largely in part due to the success of our mobile app development business.
Why didn't we use this chunk of change to pay off the student loan when we had the money?! One of the main reasons was that I had just turned 30 years old. Mentally, I was thinking, if I want to retire at 60 years old and have my house paid off, then I need to start my 30-year mortgage at age 30. Simple math right? So, for better or for worse, we went from having $65k in the bank to $65k in debt... overnight! The $65k in debt was $52k in student loan debt plus the $12k we had borrowed from our mother-in-law in order to put down a full 20% downpayment on the house. Hey, at least we were smart enough to put 20% down to avoid the mortgage insurance penalty. We also paid 10% interest to our mother-in-law for the time period she had loaned us the money.
We hated borrowing money from family, so we quickly paid down the money we had borrowed from our mother-in-law. It took us about 1 year to pay off the $12.5k we had borrowed from her. This prepared us well for what was to come next.