My husband and I paid off $80,000 of student debt during the pandemic, but now I wish we hadn't

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• My husband and I aggressively paid of $80,000 in student loans during the pandemic.
• We would have been better off investing that money in the future and paying back a smaller amount.
• I fell into the trap of demonizing debt, and I missed out on a lot of great opportunities as a result.

During the pandemic, my husband and I decided to take advantage of the student loan payment pause to pay off his more than $110,000 in student loans. We did this with a combination of extreme Dave-Ramsey-flavored budgeting and declining most invitations to drinks, coffees, and dinners.

At first, we thought we were successful: We'd paid over $80,000 of them by the start of 2023. But then I had a series of realizations that made me change my approach to our finances. Even though I'm grateful we have so few student loans to pay off, part of me regrets sinking so much energy into paying down a balance that was not growing, accruing interest, or making me any money back. Here are three things I would have done differently.

1. I would have saved for a down payment on an investment property

$80,000 would have gone a long way for us in the housing market. We made the decision to buy our first home during the pandemic. We could afford to do so because of our aggressive savings plan.

Since we're both in the military, we were also able to use a VA loan to purchase without a down payment, which put us at a huge advantage. We only had to pay closing costs, PMI, and taxes, which we'd planned for in advance. But it took us more than two years to decide to use our savings to buy another property and invest in real estate.

This time, we bought a duplex and plan to rent our first house and half of the second property, which will bring in monthly passive income.

To some, it will seem counter-intuitive to go into more debt with real estate investing instead of paying off student loans, but sometimes you have to spend money to make money. In the long run, the money we make from renting the houses will be greater than what we pay in loans.

2. I would have invested in ETFs and retirement sooner

It took me way too long to start investing. I did not make my first intentional investment until I was 24 when I read the book "Smart Women Finish Rich" by David Bach. One of the principles in that book that I absolutely swear by is this: Pay yourself first. If you don't do that, your money will never grow, and you will actively lose thousands of dollars a year to inflation and taxes. One big way I've done that is by investing in exchange-traded funds.

ETFs are "bundles" that disperse the risk you take as an investor across several assets. They are generally considered a cornerstone of a healthy investment portfolio. As a general rule, the money you invest in ETFs will passively earn you more in interest than interest on your student loans will cost you in the long run. For example, the money I've invested since then has grown at an average rate of 6% annually, which is 2% more than the interest rate on the student loans.

3. I would have stopped conflating net worth with my self-worth

I've spent so much energy demonizing debt in the past, especially student loans. Student loans have provided my family an education and a good job with benefits. Instead of being grateful for those, I've focused on how bad it felt to owe money.

I acted like we were the first people to ever have student loan debt and felt lacking every time I looked at the balance, even as it was getting smaller and smaller. I thought that because I didn't have to personally take out loans for my own education, then no one should have to. I wish I could reach out to my younger self and remind her that student loans are an investment in the future.

Tons of people have student loans, and they don't have to be a huge psychic weight. As long as you are responsible with your finances, pay the minimums on time, and avoid paying a radical amount in interest, student loans don't have to derail your financial future.

This article was originally published in July 2023.