A few details on the paydown of our debt

In my opinion, understanding the full scope of one’s debt has to be the first step in one’s journey towards FI. We’ve been paying off our debt rather casually since getting married. It wasn’t really til early 2018/after my layoff that we switched gears into rapid paydown. Our remaining debt really isn’t that complicated. Since we paid off all our credit card debt earlier this year, we’re left with just two major chunks – student loans & Moose’s (car) note. I guess we could include credit cards since we use them but we’ll listen to Dave and we’ll pay that off in full every month. Don’t you miss the class? 

So let’s talk about the student loans. There’s just under $45k left. Remember when it was soooo much more? The monthly payment is about $415/mo but we’re “gazelle intensifying” that by more than 7x up to $3,500/mo. At this rate, we would (conservatively) pay off the entire balance by Aug. 2020. I suggest taking this time to add a reminder/event to your calendar for Aug. 2020 checking if we reached this milestone. My guess is we’ll hit it even before that because when I say conservatively, I’m not accounting for even more additional payments from bonuses or commissions or extra shifts. #sidehustle LOL!

The car note has just a bit lower than $20k remaining. This one isn’t a huge deal since it’s at 0%…dang, your credit score really helped lock that rate in huh? HAHA! We’re cutting this tree down $575 a month at a time. By the time the student loans are all paid off next August, there will be just under $9,000 left. At that point, we can up the payments to $4,075 since the $3,500 previously going to student loans will then snowball into this effort. We’ll have this finished off in just over a couple months.

In summary, we’ll be 100% debt free by November 2020. One can argue that we could plow the money into investments since these debts we’re carrying have little or no interest but I think it’s a matter of preference from person-to-person or family-to-family. In all our discussions, we’ve agreed that we’d rather get that off our backs and not have to worry about them anymore. (Case & Point: who knows when I’ll get laid off again, right?) If this changes at some point, let me know. Otherwise, we’ll follow our plan, adjust a bit whenever life forces us over speed bumps and when we’re through the other end, we can focus solely on investing in those assets that will fully fund our lives. And I guess we could save a little too.

For everyone else: Do you have a full grasp & understanding of all your debt? If not, do you know where to start? Need some help or want to chat about this? Schedule a time with me!



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