A Story About Paying Off Debt and the Obstacles Along the Way

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Here's What Our Financial Recalibration Looks Like

One thing we've realized over the past 10 months is that budgets and debt repayment plans require periodic recalibration. Emergencies happen. Cars break down. Jobs come and go. Living situations change. Financial situations fluctuate, meaning that the achievement of our long-term goals depends in part on our ability to adapt and be flexible.

When we started this process in April of 2017, we were working with the following constraints:
  • One of us had a somewhat unpredictable contract job
  • One of us had a regular but low-paying job
  • We were repaying three credit cards, two student loans, and a car loan
At that time, we were able to allocate a total of $1600/month to our debts and had calculated a Debt Freedom Date of March of 2022.

By last September, our situation had changed:
So we decided to ramp up our debt allocation to $2200/month, giving us a modified Debt Freedom Date of November 2020.

Now our plan and budget are changing again, and for several reasons:

  • We paid off Credit Card #2, which leaves us with one more credit card and two student loans
  • We broke our lease (via our tax refund) so that we can move from our raucous, sleep-inhibiting apartment building into a quieter but more expensive duplex 
  • My new job pays more...
  • ...but my health insurance is more expensive...
  • ...and we're putting slightly more money into both retirement and an HSA

So what does all of this mean in terms of actual numbers? 

Here's our totally transparent breakdown of the old budget versus the new one:

In sum: rent and health insurance are going up. We'll be contributing slightly more to long-term savings. Our debt repayment allocation is going down. 

Sidenote: We are well aware that the rental is expensive, though for our ridiculously-priced city and given its ideal location (right by a trail and within walking distance of school and work), it's considered reasonable. I'll write another post in a few days that explains our decision to keep renting instead of taking the leap into buying.

Here's what all of this means for the big-picture debt repayment plan:

This new plan is only a couple of months off from the old one in terms of the projected payoff date.

Of course I'm hoping that we'll be able to pay it all off sooner than that, and I think we will, especially if we receive work bonuses. But regardless, this new plan seems reasonable to me because it reflects goals and values that have become increasingly important to us over the past year:
  • Even though it's expensive, we love our community, and we're willing to pay the price to live here.
  • Our home is our haven. We value a quiet place where we can truly relax.
  • We want to become more dedicated to saving for the future.
  • We're determined to pay off this debt.
No doubt all of this will change again at some point. It's probably inevitable - because life - and that's okay. We can be flexible. We can adjust. Our pace of debt reduction might fluctuate, but we're moving forward nonetheless.

What about you? Have you recalibrated your finances lately, and if so, what prompted you to do so?


  1. We have been pretty stable for a couple of years now, no recalibration needed, but I'm sure there'll be an adjustment sooner or later.

    I think your new budget and debt payoff look quite reasonable. The only thing I stumbled on was the high rent, both the old rent and the new rent. But it makes sense since you said you are in an expensive area within an expensive city. And we each have our own THING that's higher. In our case, it's our electricity, 4 times more than your gas/electricity!

    1. Yes, the rent here is pretty crazy/ridiculous. Most people in our town struggle at least somewhat to make ends meet, and a lot of folks eventually end up leaving.

  2. I recalibrate constantly! My income fluctuates a fair amount so I'm always fidgeting.

    I'm curious why you decided to pay off the big student loan first. Why not just knock the little one out? Is the interest rate difference that dramatic?

    1. Oh, that is definitely a possibility. The interest rate difference isn't that dramatic - 7.25% for the big loan vs. 7% for the smaller loan. We're thinking about paying off the smaller one first for the sake of momentum.

  3. I have recalibrate a number of times. As long as you're moving forward, its all good!

  4. Second loan question: you could probably refinance them (or at least the big one) and save quite a bit. Have you looked into SoFi or Earnest or one of the other student loan refinancers?

  5. Congratulations on the new digs! I can't wait to read the details

  6. I can't get enough...your posts are so matter of fact and down to business. great binge read! true on the budgets changing... i've had to reallocate a few things as well but still managed to keep within the monthly target... home as haven is kind of my motto for right now as well.