Why We’re Happy Taking a Few Extra Years to Pay Off Debt

Why We're Happy Taking a Few Extra Years to Pay Off Debt #SavingGoals #financialplanning #debt #saving

Guess what – Paying off debt at an accelerated rate can be harmful to your health… More than that, you may not be making the best decision for your financial future. “Why?” You ask – Being debt free isn’t the only mark of financial success. In fact, I’d argue that your saving goals can be significantly more important than being debt free…   Depending on your specific situation.     I met with our accountant last month, and throughout the first half of the meeting, I kept reinforcing a few of our current financial goals. “By throwing an extra $X at this loan, we’ll be able to knock that loan out 2 years sooner…”   I was focused on getting rid of a few of these debts we have as fast as we possibly could. And for a half hour, I lost sight of the bigger picture.   My accountant […]

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Our unorthodox path to $X00,000 of debt – and what we’re doing about it

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Yes – I call myself a personal finance blogger. AND… Yes – that mysterious crooked number with five zeros after it does represent a relatively recent picture of the debt we have amassed as a family.   (Photo by MKulp Photography)   This story is a bit different from the other personal finance bloggers you’ll read about. There’s no tale of a mansion we couldn’t afford that went under. Over-priced cars that cost us thousands. Lavish vacations paid for with tomorrow’s money (credit cards)… I guess I did lose about $15,000 during the market crash, but that doesn’t equate to nearly a million dollars in debt, right?? Correct. In fact, we’ve lived a relatively frugal lifestyle and we understand the process of coming up with new excuses every weekend as to why dinner out with friends wouldn’t be an option. We’ve argued with utility companies, shopped for the best rewards […]

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Why aggressively paying down debt can be a bad thing

It’s all the craze these days – “Eliminate debt!” But we don’t stop there. We’ll continue – “…ASAP!!!”   I know, I know. I’ve even written articles about that very topic. I’ve discussed the ridiculousness of interest and how the borrower is a slave to the lender, yadda-yadda. About how you have more freedom without the noose of debt around your neck… I hear ya.   But have we stopped a minute to consider the alternatives?   Or at least some of the consequences that come along with dropping everything to pay down debt? Monica and I hadn’t. “What in the world could be a negative consequence to aggressively pay down debt, if you can afford it?” This was our logical thought process.   One day we realized this may have been maybe the 5th worst financial decision we had made to this point (after investment choices during the GR (Great Recession), […]

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Pay yourself first (financial pillar#6)

Check out the complete list of Financial Pillars Here When there are credit card payments, student loan payments, rent, mortgage, car payments, utilities, groceries, …, and the good ‘ole gym membership competing for those precious budget dollars, it can be so easy to ignore savings. In this post, I’ll show you why it’s vital to save monthly. How will we do this? By paying ourselves first. That’s right – before all of those other bills. Don’t worry, if we do this right your lights won’t get shut off on you.   I’ve heard it when doing financial counseling, my friends have said it in random conversations, and the data show their comments to be true… “After all of the fixed expenses, it’s hard to come up with any money to save each month.”   I hear this and think about death to the savings account, death to retirement, and death to financial freedom itself. And I’m […]

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