Friday, September 25, 2009

I'm slowing down my debt payments

I feel like I write a variation of this post every couple of months. The truth is, I really struggle between saving and paying down debt. In the beginning, I was very gung-ho about reducing my debt. My outstanding debt was a big prickly thorn in my flesh.
Nowadays, I feel like it's more like joint pain that comes and goes. In plain english, I'm tired of focusing on my debt. I feel like I'm in my twenties, and there are a lot of things I am sacrificing in order to be debt free as soon as possible and I don't have to be that frugal. On top of that, the fact that I have very little savings is becoming the new thorn in my flesh.

I thought everyone that wanted to get rid of debt did it the way I had been. Pay down as much as you can, as quickly as I can. An article over on debtkids site made me rethink that. He has a lot of debt, and he is paying it down, but he also has close to (or over, I don't remember) 10k in savings. I started thinking about it, and I think that is smarter.

Hypothetically, if he were to lose his job, he could pay his personal expenses AND continue making payments on his debt for say, 3-4 months. In this time, I'm sure he could find another source of income. Now if you look at me, I'm paying a high percentage of my income towards my debt, but if I were to lose my job - I wouldn't be able to pay next months rent AND I would miss my next credit card payment b/c I wouldn't have any extra money. See?

Additionally, I want to be able to do fun stuff. I want to travel and take dance and writing classes. I'm tired of feeling like a college student when I make 62k a year.

All this rambling is just a way to say that I am reducing my payments to my credit card by $200 a month. That money will go towards my various savings accounts (I have like 10 accounts at ING hehe). I'm still going to throw any extra money I get towards my debt, but $1100 a month towards my debt is a bit high and I'm ready to change.

I think I'm going to look at the extra interest I pay due to my decision as the cost of enjoying my life. I'm okay with that.



  1. I struggle with that too. My hardest moments come when I have built up a good chunk in my savings and I think to myself, "just put that towards your debt instead" and I always do. However...that has helped me cut my debt by 3/4 in under a I am OK with not having any savings yet, because I think to myself, the moment I am out of debt, these $500+ payments each month are going straight into savings.

    BUT this only applies to my credit cards. I am completely fine with taking a long time to pay back my student loans, since those have a low rate (however not as low as my credit cards..haha).

    I actually think to myself sometimes, what are you going to do when you don't have any debt to pay back!? It's going to feel weird! It's actually going to feel like it did when I lived at home and actually was able to save $5K in a few short months to pay the broker fee and whatnot for my first apartment!

    Good luck with the reduced debt payments, but keep chipping away at that debt!


  2. Having a balance is key.

    If not, you are going to burn out and get frustrated and possibly slide back into old habits -- which I can tell you, totally happened once or twice when I was paying down my debt.

    It's why so many PF'ers say to set aside cash for fun and for other pursuits, and to not put every penny towards debt.

    Great choice!

  3. heyy, im new blogger, and beeenn reading alot PF blogs including urs, anywayz i see u pay too much for you rent, if u move and get place around 700(consider roomate?) u will free up 700-800, thas alot, im from dc and we have high rent here also, but i managed to get a roomate and pay 700+utils, i would suggest moving that would give u "fun" money while still making dent to ur debt

  4. Just came clean today.. My first day here on spilling beans and while searching sites came across yours.. And this post. I feel your pain. It is plain frustrating. But.. You are not alone..


Hit me with some tough love