If you’ve been following our debt payoff progress reports, you know that we are two months away from paying off approximately $100,000 in consumer and student loan debt. We did it by paying off our debts from smallest to largest and continuing to pay all that we could pay and not slacking off when a particular debt was eliminated.
You may also know that we have been saving around $300 per month for the past year for a nice vacation. So far we have saved up almost $4,000. This means we could have actually been debt free two months sooner. This was intentional.
We chose to include our priorities in our monthly budget and debt payoff plan and follow a conscious spending path.That means we don’t feel guilty about splurging on the things we enjoy because we are frugal in our spending on items or tasks for which we have no interest.
In addition to allowing you to keep your sanity by affording you a guilty pleasure or two, an intentional money plan allows you to set a more realistic date by which you can become debt free. It acknowledges that things like Christmas happen and you may not have enough money that month to pay the full extra payment on top of your minimums due.
Once you know how long it is going to take to get out of debt, add another month or two at the end to account for those unplanned expenses that always happen every six months.
Push Yourself, But Not Over a Cliff
If you are planning for ASAP, you are setting yourself up for disappointment.
Take some time to use a debt payoff calculator and realistically chart out what you can afford, and how long it will take you to get out of debt. If you have a ton of debt, you should be prepared for the fact that it’s going to take you a few years to dig yourself out.
Before you get too ahead of yourself and overestimate your ability to pay off debt, take a month or two to track your spending and get all your bills and lines of credit and all debts listed on the same page. If you would like a free copy of the Microsoft Word debt spreadsheet I use to track my spending and bills and payments due, just email me through the Contact page.
Leave yourself a bit of a buffer so you are not down to your last pennies in your checking account because a few unplanned expenses may just knock the wind out of your sails and back into the arms of debt normalcy.
Your buffer is your safety wire. Now you have no excuse to not push yourself to knock out as much debt as possible, to find the courage to do something bold like selling that jet ski you bought last year and used three times.
Excellent post…and, very timely! We are just about to close on a new home, and are planning to tighten down EVERYTHING to pay off that loan in as few years as possible…but, like you say, life happens! I do not want to return to any kind of credit card “emergency” use…EVER! But, oh! We want to pay off our home loan right quick! Thank you for this post! I think I’ll rework the budget and see what slowing down looks like! Thanks! Cheeryshirley (& Glen)
I definitely agree with you and your post! There is a point where you can’t sacrifice everything in order to focus on debt and money.
This is a great post! I tend to squeeze every last dollar into debt repayment, and when something out of the ordinary happens, sometimes I’m left scramlbing, which isn’t good! Thanks for the reminder that life happens, and I need to be prepared.
Great reminder that you have to be realistic with your debt payoff goal. While it is natural to want to pay off your debt as soon as possible, you don’t want to burn yourself out by pushing too hard. Remember that if it is a lot of debt, the repayment is a marathon and not a sprint. If you set too aggressive a plan, you’ll just get frustrated when you can’t meet that goals and other expenses pop up.
It’s tough to find a good balance between living life now while properly planning for the future (via paying down debt and/or saving for retirement).
I know that I definitely went overboard on our debt payoff plan when I first got started but over the years we’ve scaled back a bit and we’re nowhere near as intense now. Like you said, if you have a ton of debt (which we did and still do) then you just have to accept that fact that it’s going to take awhile to pay down.
I think being realistic is key - it’s not sustainable to cut out all of life expenses when making a debt repayment plan or paying off debt. You’ll just go crazy!
I think this one is the hard onet o remember : “be prepared for the fact that it’s going to take you a few years to dig yourself out” It’s hard because I keep reading blogs about people getting stuff paid off and having gotten out of debt, and so it’s hard to still be in debt! But it just takes time and my family’s goals will be different than other family’s goals/timelines!
Funny thing that debt stuff is, huh? So quick to be accumulated, yet so long to be gotten rid of. I’m in total agreement of keeping things in perspective and being realistic about the situation, particularly with regard to leaving something over. Sometimes people get too focused and fixate on paying down debt, not realizing that even here, a balance must be struck between spending and saving.
Balance is needed-I’m planning a wedding at the same time I’m trying to pay off debt. I’d love to put the money that I’m saving towards the wedding and start paying off debt but I keep in mind that memories still need to occur even while one is trying to push themselves to pay back past errors. And I’m only planning on getting married once so I’d like to have those memories. I’m still paying off debt but at a little slower of a rate. And everytime I make a payment, it feels like a small victory. I also feel pretty victorious that I will not be going further into debt to have the wedding/honeymoon. All that will be paid for out of our wedding savings!
Memories don’t necessitate money! (Got married 7 weeks ago and it only cost a couple grand
)
Eric’s right…so quick to accumulate, but you know why? Because spending money is FUN! Saving money…not so much, but way more rewarding in the long run
Keep up the good work, John! We’ll be cheering you on through the approaching finish line!
It’s so easy to want to do the whole “PAY OFF DEBT ASAP” thing and just go full force. But you’re right - you need to be realistic because you don’t want to set yourself up for failure. When I was paying down debt, I made sure to pay myself first and also give myself a buffer and a tiny bit of fun money.
That is so kick arse you guys are paying off $100,000 in debt!!
Slow and steady wins the race, always. It’s amazing to see what investments made 10 years ago are producing today.
Good Points John! Especially about being realistic. It’s easy to get discouraged when faced with this reality, but building a plan helps ease that when everything is in perspective. $100k is no small feat. Congrats!
That’s such a clever blog title. The fact that you’re only months away from paying off $100,000 in consumer and student loan debt is so inspiring, and it shows that anyone with a sense of urgency to do so, can accomplish the same goal. Man, you’ve given your debt a big ass-whopping. I love it! You should write an eBook explaining point-by-point how you and you wife did it.
I feel like you’ve got the champagne on ice….just waiting for the big moment. Like you’re about to win game 7. Sweet.
This is where the emergency fund comes in. Whenever someone doesn’t have that in place first-instead whole-hogging debt-they inevitably fail when life doesn’t stop happening around them. Or in your words, “Christmas happens.”
Sage advice John, and you speak from experience so credible. Living a monastic life to allow for the largest possible debt payment is bound to backfire, for most, I think. It might feel good for a while, but rebellion is likely, jeopardizing the goal. A steady, sustainable plan works best for most.
I think being realistic is the smartest thing anyone can do. Sometimes I set myself up for savings failure by setting my goals a little to high. We can only push ourselves to a certain point before we get burnt out.
lol@ the jetski. Incredible that you’ve paid off so much, you’re so close now! Awesome!
Definitely good to be realistic and have a buffer. Unexpected things happen, and we can’t forget to live life in the process. It seems like you have a great handle on how to balance, given that you’re 2 months away from a massive debt being finished AND saving for vacation too.
Good reminder! All things in moderation is what I say. There is nothing wrong with pushing your limits and challenging yourself to do better. But suffocating yourself is no good either. I use a budget to plan fun stuff like vacations. I also use the buffer trick to not get into debt.
It’s great to hear about your progress. Only a few months left, keep at it!
We don’t have any consumer debt, but we do have a few mortgages. We’re trying to pay it down, but it’s not that urgent. It will take a while to pay off since the amount is so large..
Congrats John!
This could really be said for much in life. My philosophy is that managing you money enables you to take advantage of life’s opportunities. Paying down debt is important to that money management process, but you need to keep things flexible should opportunities come along.
You guys seriously rock! It’s funny, today I posted about blowing $100,000 in two years, and you guys are paying off $100,000 in debt! How awesome will it be when you wake up the next morning after paying off the last debt, knowing that you are debt free (except the house) and will never be there again! Truly an awesome feat that many of us are still hoping to accomplish. Thanks for sharing your story along the way!
I have been thinking of you both so much, and am very glad you’re going to be out from under the huge weight of debt! You probably won’t be able to sleep that night from happiness!
Congratulations…you’ve worked hard and consistently…keeping the goal in mind! Cheeryshirley
Congratulations on your wonderful achievement!!! Having a realistic plan has been key to our family paying off our debt too.