Ding! Dong! The Debt is Dead!

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The Debt Monster is dead. Find out how we killed him.

You may remember that I took on the husband’s debt some months ago.  It was an APR emergency, and I still had a 0% promotional time frame left on one of my cards.  The plan was to get it paid off by the time the promotional rate expired; the goal was to get it paid off as quickly as possible.

Good news!  That debt is dead!  It got paid off a month and half ahead of schedule!  It’s a good feeling to have it gone, even though it wasn’t super massive.  To continue with the good news part of the post, here are some tips we used to pay it down:

  • I applied every last extra penny towards it.  This side hustle helps pay my bills, but luckily it brings in a little bit extra, too.  We also both have variable incomes, so when we worked more than we were expecting, this is where the money went, too.  By making it a priority, we didn’t give ourselves a chance to spend that money on anything else.
  • When I say every last extra penny, I also need to say that contributing to an emergency fund is a priority for us before even paying off debt.  This logic is made easier when you take into account that our debt was carrying zero interest.  But if you don’t have that emergency fund, the second you pay that debt off you could end up right back in it. That happened to us last time around, and it was a mess.  It’s a good thing we did it this time, too, because there’s some bad news.

If you want to figure out how to pay off your own debt, I’d highly recommend this amazing debt calculator. It allows you to play around with payments and payoff dates, giving you the power to make a plan.

The Bad News

You may remember me mentioning my car and how we had paid it off years ago.

I just shouldn’t mention anything positive that happens in our lives ever.

Recently, it broke down.  It was the best car ever.  Seriously.  It never gave me any major problems beyond regular maintenance.  It was a decade old.  And when it went, the engine just died.  Irrevocably died.  Died so hard there was nothing we could do about it.  But died so suddenly that we didn’t sink hundreds to thousands into it in repairs before it went.

So it even went out lovingly.  And for that I will always be thankful to it.

Luckily, we had enough in our emergency fund to put a down payment on a new-to-us car without leaving our balance low enough to wig me out.  So I have a car payment.  I’m not debt free.  I can’t do a happy dance.

But I needed to diversify my credit streams, anyways.  As long as we pay this one off as aggressively as we did the last one, odds are it will actually help my credit score by the time we’ve got that down payment for a house.

And then when we have that we’ll have a mortgage.  Maybe someday we’ll pay that off super early.  But as I’m growing older, I’m learning that for me, being debt free isn’t really the goal.  I’d love to preach extreme frugality, but I’m not biking 20 miles on a highway in God knows what direction everyday, and our public transport to the suburbs mostly sucks.  So it’s a car or quit my career, which would be a bigger loss than our modest car payment.  I’d love to pay for a home in cash, but if we keep renting the inflation in the renting market will make it so we can’t even save for a down payment.

For me, the goal is to keep my debt manageable while being prepared for the emergencies in life that always crop up when you’re least expecting them.  The debt free-ness that I held onto until my late twenties may not reign again until I’m closer to retirement.  But that doesn’t mean I have to rack up oppressive credit card debt.  That doesn’t mean that we’re going to suddenly give up the student-loan-free path we’ve taken to get the husband through college.  That doesn’t mean I have to let that four letter word detract from living a meaningful, happy, and fulfilled life.

Life is a compromise best fulfilled through moderation.

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39 thoughts on “Ding! Dong! The Debt is Dead!

  1. donebyforty

    Sorry about the car dying, but it happens. I have a post in the works on unexpected expenses, and think I might steal the car example, if that’s cool. 🙂

    My view on debt has softened over the years. After becoming debt free, we waited about a year before getting two more mortgages…and are on our way to a third. Debt’s a tool that can help your finances, if used well, and I’m sure that’s what you guys are doing.

    Like you said, the debt is a part of you getting income.

    Reply
    1. femmefrugality

      Totally cool!

      Mine has, too, obviously. I know it’s better to be debt free, and when I was younger I always swore to do without it, but I honestly don’t see how we’re supposed to bridge the income debt without taking it on responsibly. I make about 22x my car payment monthly, so being indignant about debt would have a major negative impact on our finances as it would mean a loss of job/income. And the whole home thing…we’re never going to be able to afford it if we don’t take out a mortgage. Hopefully we’ll be able to build our income and pay that sucker off early, but we can’t pay for rent and simultaneously save a house payment every month. Makes a lot more sense to pay the bank some interest than to pay the landlord a huge percentage of our income for no eventual profit. We have to get our down payment and emergency fund really beefed up before that happens, though.

      Reply
        1. femmefrugality Post author

          I guess it all depends on your local market, but overall nationwide rents are going up at an alarming rate. Pittsburgh is no exception. It’s gotten ridiculous over the past five years. And our realty market is still crazy affordable. Even with taxes, we could pay lower for a mortgage than rent in some hella nice school districts. And ours is comparatively low as we have been in this place for a while. Comparatively. It still goes up every year. But moving to a new rental is impossible because of the increases. I’m with your wife on this one. As long as you have a healthy savings account, which I’m pretty sure you do, but we’re still working on.

          Reply
    1. femmefrugality

      That was super lucky for us! I consider it the husband’s debt because before we transferred it to my name I held no liability for it as it was unsecured, even if we did hold joint assets.

      Reply
    1. femmefrugality

      Totally different story from last time we had major car troubles! We had paid off his debt, and at that very moment ran into a $1k+ repair, which was what eventually what led to him building up more as we hadn’t put anything into an emergency fund in order to speed debt pay off. (I wouldn’t have chosen to put certain expenses on the card, but we manage our finances independently. He fed and sheltered our family while I was in school for the most part, and has sound reasons behind his financial decisions. They’re just not the same ones I would make.) So that was a bad plan. Glad we learned from it!

      Reply
  2. kay ~ lifestylevoices.com

    What a nice, common sense approach to life’s zigzags. Nice share, Ms. Femme. You’ll make a lot of people feel much less badly about being in less than perfect financial condition. I think some blogs do just the opposite.

    Reply
  3. Taylor Lee @ Engineer Cents

    Woot @ debt payoff! Sucks about the car but, like you said, it went down with dignity. I think your overall approach to the situation is very sensible and even if you won’t be “debt free” for a while you’re setting yourself up to be in a good financial position anyway. So kudos!

    Reply
    1. femmefrugality Post author

      Thanks, Taylor! Hopefully everything goes as planned or a little bit better from here on out, but we’ll be ready in case Murphy visits again. 🙂

      Reply
  4. Ms. S

    Totally Awesome! Congrats. And talk about great timing. It sucks that the car died but happened at a good time when your other debt obligations are gone. And I am all about an emergency fund, so good that was in place. Winning!

    Reply
  5. Debtless in Texas

    Ah these things have a way of happening. Yet another reason we keep an emergency fund high enough to help offset these unforeseen expenses. I hope the new to y’all car is a nice upgrade and congrats on the debt being dead!

    Reply
    1. femmefrugality Post author

      Exactly! Well, in some ways it’s an upgrade but in others it’s a downgrade. I’m not super into my car image, though, so it gets the job done.

      Reply
    1. femmefrugality Post author

      Haha maybe we’ll take a victory lap in our new to us car while gas prices are still lowish. And lavish ourselves in the rich irony. :p

      Thanks for the positive words!

      Reply
  6. Tonya@Budget and the Beach

    Congrats on the debt payoff but yeah that Murphy is a bitch. lol! I sympathize because the same exact thing happened to me. I was debt free and had a paid off car and mine died last year. Thankfully I have great credit so the interest rate is super low.

    Reply
    1. femmefrugality Post author

      Ahhh it sucks so bad, doesn’t it? Loving my credit score right now, too. Interest rate is near non existent.

      Reply
  7. shoeaholicnomore

    I understand what you mean here Femme. Yes I want to be debt free, but I won’t be forever as I’m sure I’ll still finance things like cars and houses. But I do want to remain credit card debt free.

    Reply
  8. Prudence Debtfree

    Our van just turned 16 years old, and I dread the day that it dies. I hope that your new-to-you car will be as gracious as your last one. I am totally allergic to debt now, but we are within a decade of retirement, and we had a tough time managing our debts for years when my husband was under-employed. Stage of life and life experience have a lot to do with our viewpoints on money.

    Reply
    1. femmefrugality Post author

      I’m routing for that van for you! I think that’s really it. If I were closer to retirement a mortgage probably would be more of a deterrent than something to aim for. Things change across all aspects of our life dependent on our age, and money is certainly not an exception.

      Reply
    1. femmefrugality Post author

      For sure. I’m not really sure we could get everything done we need to get done without the extra income.

      Reply
  9. Mel

    I recently got a fortune cookies that said “all things in moderation… even moderation.” I’m sorry you didn’t get the awesome debt free happy dance moment, but I’m sure over time you’ll have them occasionally!

    Reply
    1. femmefrugality

      That sounds like a great fortune cookie! And yeah, I’m sure we’ll hit a couple of them over the years. And as long as I’m not taking out the kind of debt that doesn’t add value, I think I can learn to be okay with it.

      Reply
  10. vickie morgan

    Sorry about your car and that you didn’t get to do the happy dance. We have been doing the happy dance for awhile now but I know that those 10 and 12 year old cars won’t last forever (although in my head they should).
    I’m always amazed how hard you work!

    Reply
    1. femmefrugality

      I had car loans for some of my adult life, but for the past three years I had a great little happy dance going. It was just since November ish that things got messy. So I hear you on that perpetual dancing! Hoping your cars have many years of mechanic free driving ahead of them! It does stink that they die on us. This one was an emotional farewell.

      And thank you. The past few years have been incredibly hard work as we climb our way up the ladder. I hope someday we’re able to strike a little more balance in our lives. But in the meantime people recognizing all that work really means a lot and keeps me going.

      Reply
  11. Melissa

    Congratulations on paying down the credit card payment!! It does suck about your car, but hey, at least you didn’t sink a ton of money into it. And new (to you) cars can be fun, right? I’m telling myself that because we need to get a new (to us) car sometime this year, because my fiance’s car-sharing experience is coming to an end. And yeah, we don’t even live in the suburbs and transportation sucks here. I feel ya on absolutely needing a car! Riding a bike in this city = death, so it’s either a car payment or no job… and a car payment is preferable to that 🙂

    Reply
    1. femmefrugality

      Oh, we actually live in the city, but I work in the burbs pretty frequently. It stinks whenever public transport isn’t what you need it to be, doesn’t it? Hoping you find a great deal on a new to you car! And thanks for the congrats!

      Reply
  12. Kalen

    Congrats on paying off the debt! Sorry to hear about your old friend, aka your car. It seems like vehicle issues are the biggest cause of sudden debt.

    Reply
  13. Chela @SmashOdyssey

    I love that you preach moderation. Some people are so extreme in their lives, including debt payoff–but that’s not for me. Being prepared for emergencies while keeping debt manageable is smartest way to go. Good for you!

    Reply
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  15. Anne - Money Propeller

    You keep using super creepy rabbit dude!!
    Congratulations on getting that debt sorted out, I’m sure it’s a big relief!
    That was very considerate of your car, that’s always the hard part about cars.. “is this the last repair.” I hope you are able to find a good one for a reasonable price.

    Reply
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