I’ll Pay It Back…Someday


For the past several months I have been struggling with determining the “right” pace to pay off our debt. My husband and I took Dave Ramsey’s Financial Peace University so part of me thinks we should not have a life until our debt is gone. But then real life intervenes. Yesterday I found out that an acquaintance passed away on Valentine’s Day. He was only 32.  I also think of my dad.  He and my step-mom worked hard until they retired and that’s when they planned to travel and enjoy life. That never happened. My step-mom died of cancer in 2006 and my dad is legally disabled and rarely leaves his house.

So do I say to heck with my debt and just pay the minimum or not pay it back at all? Shouldn’t I live life now because tomorrow isn’t guaranteed? I personally couldn’t do that and I certainly don’t recommend that you do either. So I’m back to my question, what is the right pace to pay off debt? I think the answer is subjective and personal, but serious consideration should be given to the following things.

What expenses do you have?

Track every penny for a minimum of 30 days.  Are you stopping for coffee every day on the way to work? Eating lunch and dinner out several times a week? Are you a movie buff of clothes hound? Where can you cut back that you won’t even miss it? Even putting a few more dollars towards your debt makes a difference.

Next, take a look at your monthly bills. Do you really need all those cable channels? Every feature on your cell phones? The gym membership you never use? Try cutting back one thing at a time. Here’s what we did. You just found more money to direct at your debt.

How much debt do you have?

If you thought tracking your spending and taking a serious look at your monthly bills was tough, this may really be a humbling experience.  Make a list of all  your debt except for your mortgage:

  • car payment(s)
  • student loans
  • credit cards
  • other consumer debt
  • second mortgage
  • personal loans


We sold our house on a short sale and just paid off the payment settlement on our second mortgage.  That leaves 3 credit card balances totalling $20K and a personal loan for my jewelry business of $5K from my mom that will be deducted from my inheritance if I don’t pay it back. we are using the debt snowball method, paying off the smallest balance first regardless of interest rates.

How long do you have until retirement?

I have been through three lay-offs in my career and during the most recent one, I was unemployed for 28 months. When I went back to work full-time last May, we had moving expenses to pay for.  We also thought we deserved to splurge on new sofas and an area rug, clothing & electronic gadgets because we’d gone without for so long. We have since re-focused on paying off debt and have now turned our thoughts towards investing for retirement.

At what age do you plan on retiring? We’re figuring 65 if we’re lucky. We are currently in our early forties and only have about $60K in 401ks, IRAs & and an ETF. Getting our debt paid off will allow us to concentrate on making up for the years we didn’t contribute to retirement and for the losses due to several recessions.

I am now contributing 6% to my 401k and so is my husband.  I also invested $500 in ETFs. It’s a start.

We hope to have our credit card debt paid off in about 20 months. How long will it take you?



I’ll Pay It Back…Someday2 Comments

  1. I've been struggling with the same thing; my interest isn't all that high, because it's a car loan. I am comfortable making the payments, but it would be nice to be debt free. I really want to live it up when I'm young; travel, have fun, relax, enjoy life, but that requires some money that i could either put toward debt or use for enjoyment. I'm not sure. I have to ponder this a little.

  2. I'm hoping to be fully debt-free by 35 (I'm currently almost 26). Right now my only debt is my federal student loans, which I'm just starting to pay off. I'm focusing on my largest loan which is also unsubsidized. I would like to get that one paid off in the next few years and then focus on paying the rest/saving for retirement or a home.

    It's really, really hard not to get discouraged when looking at a large amount of debt, but it seems like you've got a good plan :).