3 Budget Tweaks Helped This Middle-Class Couple Pay Off $102,000 In Student Loans In 4 Years

Financial Independence, Retire Early (FIRE) seems like an impossible goal for many. Ali and Josh Lupo want to change that.

“You often see the success stories coming from the mountaintop,” says Ali, 31, one half of the husband-and-wife team @theFIcouple, an Instagram account that has 108,000 followers. “You see the multimillionaire who has 100 rental units talk about how they did it in two years. There’s a disconnect. We were like, ‘We’re broke!’ We had very average salaries, and wanted to show our struggles.”

Life as personal finance content creators didn’t appear to be in the cards for the Lupos. Just a few years ago, the couple was drowning in six figures of student loans and a combined take-home pay 34% below the median household income of $67,521, based on data from the United States Census.

Overcoming financial challenges head-on has helped Ali and Josh get back on track toward financial independence – and now they share their journey with thousands of others who follow along. Here’s the couple’s advice for anyone looking to get out of debt and take charge of their financial future.

An Aspiring Two-Income Household Turned Upside-Down

The Lupos met in college, where they were both pursuing bachelor’s degrees in child and family studies. Josh’s first job after college involved working at a group facility for high-risk youth, and Ali’s first job was with a domestic violence shelter. Both jobs paid $12/hour. Burnt out, Ali decided to get her master’s degree in social work in order to pursue better job opportunities.

“We [knew we] would have a lot more debt because of the grad school, so we started talking about finances more,” says Josh, now 32. At the time of Ali’s graduation in the spring of 2017, the couple had about $102,000 in student loans. They were also engaged, with a wedding ceremony on the books for the following year.

“We had never really calculated how much debt we had, what our income was, we never budgeted anything like that,” says Ali. “So we started doing that. And it was at that point we started realizing we had over $100,000 in debt. We were spending everything that we were making and then some, because we were also living off of credit cards. It became kind of that ‘Oh, s—’ moment where if we wanted a different lifestyle than the one we [currently] had, we’d have to start doing some things radically differently.”

Related: I Hit My FIRE Number at 37, But I’m Not Retiring Yet. Here’s What I’m Doing Instead

Ali soon landed a job with better pay as a school social worker, and the couple became a Double Income, No Kids Yet (DINKY) household. Armed with a budget and newfound inspiration about money, Josh started reading books on index funds and real estate. The improved financial situation was short-lived, however, as Josh was let go a few months later from his job of seven years. 

Then things got even worse.

How a Car Accident Kickstarted Their Debt Payoff Journey

Two weeks after Josh had been let go, one of the couple’s cars, a Volkswagen Passat, was totaled. The Lupos say the conversation around their replacement car was a watershed moment in their personal finance journey.

“We were like, ‘Our life f—ing sucks right now’,” says Ali, as they realized their current monthly expenses had become unsustainable. “The Passat had cost $15,000 to finance, so I thought we were just going to take the [car insurance reimbursement] check and get another Passat, because that’s what I wanted. It was a pivotal turning point, because Josh was like, ‘No, we’re gonna get a used Toyota Corolla in cash, because that’s what millionaires drive. We’re not going to take on another car loan.’ I was so pissed and felt like he was ruining my life. But we had no car payment, and that’s a lot sexier than the Passat that we were driving at the time.” Josh used the Corolla to begin driving for Uber, and would listen to podcasts about FIRE and real estate investing between passenger rides. 

Despite having setbacks and a low household income, the couple still put their FIRE aspirations into action by zeroing in what they call the ‘big three’ expenses: food, transportation, and housing. The couple cooked more meals at home to save money, and already had taken the car payment out of the picture. Next, the Lupos focused on saving enough cash to purchase a duplex that would help them reduce their monthly housing expenses, a FIRE technique known as ‘house hacking.’

“Those three things were like a shovel to our expenses as opposed to a little teaspoon,” says Josh. “So it kind of allowed us to not have to make as many emotional decisions. Now if I want to get Starbucks or I eat sushi or see friends, I can do those things without as much mental turmoil or bandwidth to figure out if it [financially] makes sense.”

The couple focused intensely on saving. They also used this time to calculate one of the most important and thrilling personal finance calculations for any aspiring FIRE enthusiast: the FIRE number.

The FIRE Number

In the FIRE movement, your FIRE number is the net worth benchmark you need to achieve in order to become work-optional. A napkin-math calculation for your FIRE number is to multiply your annual expenses by 25:

Annual expenses x 25 = FIRE number

Additionally, these assets need to be invested and making annual gains in order for you to live off the dividends alone. This equation comes from a paper titled Retirement Savings: Choosing a Withdrawal Rate That is Sustainable, which was written by three Trinity University professors and published in the American Association of Individual Investors Journal in 1998. Better known as the Trinity Study, the data set found that retirement plans that had reached a certain milestone and had withdrawal rates 4% per year or less had a 100% success rate for maintaining wealth and principal. This became colloquially known as the 4% rule.

Some FIRE enthusiasts prefer an even more conservative calculation, pegging their plans to a 3% withdrawal rate, which can be calculated by multiplying annual expenses by 33. 

Annual expenses x 33 = FIRE number

Related: Our Family Achieved FIRE at 39 and 41 on Salaries Of Under $100K a Year. Here’s How We Did It

“We had to start having really difficult conversations at that point about what we wanted our life and finances to look like,” says Ali. The couple settled on a FIRE number of about $800,000, which would be reached through a combination of paid off real estate, index funds, and a small dividend portfolio.

How They Used Real Estate Purchases to Pay Down Debt

Josh began doing some consulting work, and the couple saved aggressively throughout 2018, eventually having enough money for a down payment on a duplex. They also cancelled their honeymoon to free up additional funds. After being outbid over a dozen times, they closed on their first duplex near the end of the year, moved in to one unit, and rented out the other. 

“That [first rent check] was a huge win for us, because we went from paying $1,300 a month in rent to about $620 a month,” says Josh. “My income was still super volatile, so that after-tax money [from the landlord check] was staying in our pocket as opposed to going towards rent.” Josh’s consulting picked up as he continued to drive for Uber, and Ali also picked up a side job. The couple built up an emergency fund to three months of expenses first, then split the remaining excess income between student loan payoff and future real estate investment savings.

“We grinded it out,” says Ali. Eventually, Josh’s consulting income matched his former salary. By the summer of 2020, the couple had half of their $102,000 in student loans paid off and enough cash to purchase a second duplex. 

“Now we’re living for free,” she says. The couple’s housing payment was zero, and their  combined annual household income passed $100,000 for the first time. By choosing an investment strategy that could simultaneously offset their monthly expenses, the Lupos have been able to reduce the amount of money they need to live on each month, accelerating their savings and wealth goals. The couple is focused on reaching a total of $1.8 million in assets under management (AUM); they’re currently about 42.5% of the way along, which comes out to approximately $755,000. 

“Real estate has an income focus rather than a growth focus,” says Josh. AUM is different than net asset value (NAV), which is assets minus liabilities. The couple prefers to focus on AUM to build up cash flow potential over time.

“Neither Of Us Are Social Media People”

Ali says the pandemic was a moment of pause that made the couple realize they wanted to explore starting a business together.

“I had never spent two months solid with this person before,” says Ali. “Why is it that the people who mean the most to us are often the ones we spend the least amount of time with? We spend the most time with our coworkers at a job. I felt we should start a photography business or some sort of business together so we could be together more. But nothing seemed to make sense. I didn’t want to learn a new trade or skill or whatever.” Ali suggested starting a social media account to document their financial independence journey. “Josh thought it was the dumbest thing he’d ever heard.”

“Neither of us are social media people,” says Josh. The couple’s Instagram account, started in November of 2020, currently has 108,000 followers. The Lupos chose the name “FI couple” and left off the “Retire Early” part of the acronym because they didn’t feel the day-to-day grind was being talked about enough in the personal finance space; success stories felt sterile and unattainable. Online marketing experts echo this sentiment.

“Social media is social. You want to hang out with people you can relate to and have similarities with,” says Tivi Jones, a marketing communications consultant who has been building social media campaigns for companies since 2008. Jones notes that the combination of relatability and real advice for people who are trying to achieve things in their lives is a powerful one-two punch on many social platforms. She says one category of personalities we follow on social media platforms are people we could see ourselves doing in-person social activities with if they lived in our city.

“It’s not that consumers are drawn to relatable content more than usual, but their trust in brands, institutions and organizations has actually decreased in the last several years, so messages like this from real-life, down-to-earth humans hold more weight and influence,” says Tiffany Rivers, senior director of social media at Media Cause, a creative agency that works with nonprofits. “According to the Edelman Trust Barometer, nearly 6 in 10 say their default tendency is to distrust something until they see evidence it is trustworthy. This distrust, in my opinion, has opened up the door for a new type of content, content that isn’t always polished, well-rehearsed, censored, or edited. Users are looking for people who look like them, feel like them, and experience everyday triumphs and challenges.”

@TheFIcouple reached about 4,000 followers in its first four months of activity. The Lupos realized that making money on Instagram has multiple strategies that can be run concurrently to increase your monthly income from online efforts. The couple released their first information product, an ebook, in the spring of 2021.

“That was very cool, because after it was published, [the income] was 100% passive,” says Ali. “We started learning more about the different levers you can pull to monetize your social media.” Shortly thereafter, their honest posts began to pay off, and their Instagram following grew dramatically. 

How to Know Your Side Hustle Can Replace Your Day Job

During all of this, Ali still had two jobs, and Josh was still driving Uber. But by offering their expertise and support in different formats, such as individual coaching, creating digital products, and working with companies and brands, the revenue earned from social media became substantial. 

“We had like two or three months in a row where @theFIcouple made more money than Ali’s job,” says Josh. “And I knew how unhappy she was. I’m like the math guy so I’m like, ‘Well, if you stay in your job, and we’re making all this money, we can achieve our goals so much faster.’ But when I zoomed in, I knew my wife was unhappy and in a really toxic, stressful job.” Ali exited her job in November 2021, a few years ahead of schedule.

Pro Tip

When your side hustle makes you more money than your day job for multiple months in a row, it’s a sign you have enough traction and momentum to make the leap and become your own boss.

The couple also finished paying off their $102,000 in student loans this past January, four years after recalibrating their personal finance goals. The Lupos encourage anyone with personal finance goals to engineer their plan from what kind of lifestyle they want to live, rather than just choosing an arbitrary number.

“We weren’t thinking about being retired,” says Ali. “We really weren’t even seeing each other that much. When we looked at the lifestyle we were living, it didn’t align with the type of marriage that we want to have. We want to have a family one day, and the idea of being able to be there for all these really important moments, especially when [your kids are] young… that’s important to us.”

“If we can create more optionality in our lives where we can be present for those moments, that’s a huge win.”