Paying off debt requires a ton of discipline, willpower, and the right mindset. It’s not always easy, but the results are often rewarding.
Last fall I made the final payment on the student loan debt totaling about $35k+ of debt paid off since 2015. It was exciting and I felt accomplished. But it wasn’t the end of my debt repayment journey.
My husband and I still have some debt left, but I decided to take a break for the past 6 months.
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When I Say “Break”…
This isn’t to stay that I stopped paying off debt completely, but I have stepped off the pedal quite a bit and am not currently aggressively paying down debt.
For the past 6 months, we’ve just been paying the minimum on everything. I haven’t provided any updates because to me it’s pretty boring to just pay the minimum. However, I still want to continue sharing my story because that’s how this blog started.
Taking a break from aggressive debt payoff has made me feel really good. But now I want to share the reasons why I did it and what I’m looking forward to for the future.
#1 – Financial Burnout
People don’t talk about it much, but paying off debt aggressively can lead to severe financial burnout.For over two years I woke up each day thinking about my debt. It made me feel good to see progress, but I became obsessed with it.
It’s like pulling a bunch of all-nighters. Eventually, your body is going to give out. With aggressive debt payoff, your motivation, energy, and willpower will all drain and need refueling.
This is why I actually recommend a break for anyone who’s on a debt repayment journey that will last longer than 2-3 years. If you have a ton of willpower and motivation, you may be able to last 4-5 years going non-stop.
But the thing is, so much can change during that time and you may not have the same outlook and determination that you had in the beginning.
Related: How to Stay Motivated During Debt Payoff
#2 Wanting to Save
During the past few years, I’ve been able to save some money despite throwing lots of money toward debt. I’d been holding onto that money for dear life because I felt guilty saving money while still having debt. I knew that if I spent anything from my savings, I probably wouldn’t be able to replace it.
Since taking a break from aggressive debt payoff, I’ve been able to increase my emergency fund, invest more, and set aside money for our house.
My delayed gratification with my current living situation had run its course and my husband and I decided we wanted to find an affordable starter home some time last year. As I’m writing this, the deal isn’t closed but it’s looking like there’s an 80% chance we will become homeowners by June.
Related: How to Save Money In Almost Every Area Of Your Life
5 Ways to Save Money When You’re Broke
How to Work Toward Financial Independence and Still Enjoy the Present
#3 Enjoying the Moment
The 3rd big reason why I decided to take a debt payoff break was because I wanted to really wanted to enjoy the present and acknowledge such a huge milestone. Most of my life has been about planning for the future and reaching goals.
I’ve been chasing after something ever since I was in grade school. I’m a go-getter and very Type A. I have a bad habit of loading my schedule up as I go after the next big thing.
For me, becoming debt free is only the beginning of my financial journey and it doesn’t have to consume my life. I still want to be able to enjoy my current state in life and appreciate all the progress I’ve been making.
So I’ve loosened up my budget a bit and haven’t been so strict on my myself.
Getting Back on Track
Given the type of person I am, I don’t see myself going at this slow pace forever. I finally feel recovered and restored (from financial burnout) and I’m ready to knock out the rest of this debt in the next year or two so that all we’ll have left is a mortgage.
Step 1 is assessing where we currently are and lining up all our debts. Aside from my husband’s student loan debt, we have some small 0% debt that includes a loan for our Tempurpedic bed (was taken out almost 5 YEARS AGO and I’m so ready to be done with it), some medical bills, and my Mac Book which was essential in order to keep running my business. Without a quality computer, I can’t make any money.
Debt I Started With in 2015:
Car Loan: $9,705.71
Credit Card Debt: $0
Student Loan: $20,845
Total: $30,550.71
Debt Added in 2016 After Getting Married:
Husband’s Student Loans: $16,120.62
Husband’s Credit Card Debt: $2,776.11
Husband’s Auto Loan: $4,603.04
Bed: $2,099
Total: $25,598.77
Our Current Debt in 2018
Husband’s Student Loans: $14,342.8
Bed: $773
Medical: $1,559.84
My Computer: $924.61
Total: $19,160
So far, we’ve paid off around $36,988.71 of our debt not counting random medical bills that we probably paid on for a few months that I didn’t track. It feel so great to see that process but we still have more to do.
Switching It Up With the Debt Snowball
As you can see, we still have some progress to make. What I’m changing this time around is my debt repayment method. For years, I’ve praised the debt avalanche method and I still love it but this time, I’m doing a debt snowball.
Related: How to Get Started With the Debt Snowball Method
All of this debt is low interest or no interest since only the student loans carry an interest rate. However, paying off all the other smaller debts first will give me more peace of mind.
Plus, once I get them out of the way, that will free up at least $300+ in minimum payment money that can be directed toward the student loans.
Our plan is to pay off all the smaller debts by the end of this year and top off our emergency fund. Then, get rid of the student loans completely in 2019.
It’s an 18-month plan that is totally doable. Having a mortgage may make things a little tricky, but we’re making sure that we don’t go into this situation becoming house poor and I’ll probably write another post about that in the near future.
For now, I’m going to jump back into action, avoid lifestyle inflation and put this plan in motion. Oh, and I’m bringing back monthly budget reports and debt payoff updates. Remember those?!
Have you ever taken a debt payoff break, or did you just power through until you paid everything off?
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G. Brian Davis @ SparkRental says
I hear you on the burnout Chonce, sometimes you just need a break. BTW congratulations on paying off all of your student loans, I’m sure that’s an load off your shoulders.
To me the debt snowball and debt avalanche both have their place, but there’s nothing like the sense of accomplishment you get when you knock out a debt, and sometimes that psychological reward is worth it even if mathematically the debt avalanche might have saved a little more money.
Cheers,
Brian
Choncé says
Thanks! Yeah I definitely needed a break, and so are so RIGHT about the psychological reward and how important it is. That’s definitely what I’m going for this time around.
Jason @ TheButlerJournal.com says
I don’t know why, but I thought your were debt free. I’ve thought about taking a debt repayment break, but if I do that I may not start back. The good thing is that my income is increasing, so this debt will eventually be gone sooner than later.
Choncé says
Well I paid off all my personal debt that I had before I got married. Now, it’s just my husband’s student loans, our joint loan, and my computer so we’re almost there 🙂 And I think if you’re really determined to become debt free, a short break won’t be that harmful. Even though I was burned out, deep down it still bothered me that I still had debt and that’s what pushed me to start back up again. I don’t know how to explain it but if you’re adamant about your goal it will really help and make quitting long-term not an option.
dcotler says
Yes, I have had planned “slowdowns” and “breaks” along the way over the past two years that I’ve been on this journey. I find it mentally exhausting to go at something full-force for such a long, sustained period of time.
During the summers, when my kids are out of school and we’re all together more as a family, I have dialed back how much I am throwing at the debt, just to have the freedom to enjoy ourselves more. I also took the month of December off entirely (only made minimum payments) in order to feel like I could enjoy all that the holiday season brings (entertaining and gift-giving) without stressing about it.
In both cases, I did not incur a penny of new debt, so I don’t feel an ounce of guilt about it.
And now, for my really big confession: after diligently budgeting and tracking down to the penny for 18 months, I stopped doing so in September, and have not looked back. I am sure I could be saving more and paying down our debt faster if I was continuing to do this, but a) I feel like the 18 months that I did it prepared me well to understand what we spend, typically, and b) I just don’t want to do it anymore. I got obsessive about it, and was constantly tracking, updating, tweaking, rethinking…the mental load was too much.
All in all, as long as we’re moving forward (not acquiring new debt and continuing to pay down existing debt, at whatever pace we can manage), I say its all good!
Choncé says
Everyone’s process is different and slowdowns and breaks are bound to happen. Like you said, it’s great you’re still moving forward and haven’t taken on any more debt.
Kristin Larsen says
You have done such a great job paying down debt! It feels so good to pay off a bill and then have that extra income every month to re-apply to debt or save. You’ve been so diligent about paying things off, awesome job!
Choncé says
Thanks Kristin!
Terri says
I was convinced that you were debt free for some reason!
I really enjoyed reading this. You hear so much about bloggers who pay large amounts of debt at warp speed that sometimes you begin to think they aren’t just human. This is a great reminder that it’s ok to take a break, regroup and find joy in your accoidhommebts.
Choncé says
My debt that I had when I started this blog is all gone, but becoming totally debt free is right around the corner 🙂 You bring up such a great point. I love reading those stories too but sometimes it’s hard to relate.
Jaymee says
I’m also taking a break from debt repayment. I was gung-ho on paying off my $40k+ student loans (my only debt besides my mortgage) by September this year. I was dumping between $500-$1500 a month to make this happen.
But as you said, life happens. I ended up buying a house 2 years ago which meant the money went to the down payment and moving expenses. Then later left my 5-year relationship and had to use a lot of money to get myself out of a bad situation. Now that I’m single, I’m wanting to enjoy my life more and have been spending my money on travel adventures and buying real estate (this decision then became an “opportunity cost” decision where I had to decide if I would get the biggest ROI from paying down this debt, which I had worked down to $12k now, versus buying houses).
Now I’m paying only the minimum towards my student loan debt and I will not be on track to have it paid off by September. It doesn’t bother me at this time and perhaps in the future, I want to go ham on this goal again.
Choncé says
Sounds like you’ve had a lot going on, but that’s some amazing progress on your student loans. That’s great you’ve been able to take time for yourself and please post some updates on how the real estate investing goes!
Kayla says
I also take breaks from paying off debt from time to time. I think it’s important to do, otherwise we begin to question what we’re really living for.
But once you get into the habit of managing your money well it’s easier to do even while taking a break. Then when you start aggressively pursing debt payoff again you won’t have extra debt to tackle amassed during your break.
Choncé says
Agreed!
The 76K Project says
You are right – paying off debt is exhausting sometimes. We’re taking a bit of a break, too, mostly by necessity. Recent medical bills have led us to paying the minimum on our debt and bolstering our emergency fund. It’s hard when I want to see our balance decrease more dramatically every month, but I also feel more secure knowing that we have a bigger savings cushion.
Choncé says
Medical bills suck! We’re at a steady pace but it seems like once we pay off one bill, we get another one so it just turns into a regular monthly payment. I’m hoping things can slow down soon.
DC @ Young Adult Money says
I’m a big supporter of the debt avalanche because I always focus on interest rate, but I did a version of the debt snowball with our auto loans. Even though they were rock bottom interest rate (I’m talking like 2%), having an additional $500 in cash flow to divert towards other debt (and to be honest, mainly investments) finally got the best of me. We paid them both off early.
My view of student loans hasn’t changed much the past 5 or so years. I feel pretty strongly that unless it’s higher interest student loans (i.e. private loans) it’s best to pay the minimum while building an emergency fund and investing. Looking back I’m glad I took this approach, but the bull market helped with that ; )
Choncé says
Yeah it’s nice not having a car payment even if the interest rate was low because the payment amounts can get so high. I can think of a ton of other things to do with that money so glad you got it paid off 🙂 I definitely understand both sides when it comes to choosing whether to pay off low-interest debt or invest instead.