My Debt-Free Before 28 Plan

For the last month or so, I’ve felt really stuck in life. After making the decision to not go to Colorado, I couldn’t seem to make any decisions on what I did want to do. Yes, I always have a handful of ideas floating around in my head… but I couldn’t commit to anything. Finally, after recognizing that most of what was holding me back was my debt, I realized what was really going on: I’ve been suffering from debt fatigue.

After 13 months of putting so much energy into paying down my debt, I’m happy with my progress but just want it to be over and done with. I’m still making all my payments, still saving, etc. but you have no idea how desperately I want to say eff it! (excuse me) and just go buy the things I want. I also want to be able to start saving for a down payment, but the thought of “doing it all” with only small numbers going towards everything is incredibly daunting.

The question now is: how am I going to kick this bad attitude / situation? And there really is only one answer: I need to pay off the rest of my debt and I need to do it fast. So, here’s where I’m at right now…

Personal Loan: Balance ~$5,320
This one time, when I thought I was going to get my finances in order, I consolidated all of my debt into a loan. The interest is currently at 7% and I make bi-weekly payments of $149 to it.

Car Loan: Balance ~$5,200
Obviously, this is the loan that financed my car. The interest is only 1.9% and I make bi-weekly payments of $117.42 to it.

Both loans are scheduled to be wiped out in April 2014. My plan is to continue making my bi-weekly payments, while saving extra money on the side. Every time my savings balance reaches $500, I’m going to make an extra payment on my personal loan. I will do that repeatedly until it is paid off and then do the same with my car loan. Since I’ll already be paying off about $3,000 on each this year, I just need to come up with an extra ~$4,520 to wipe them both out for good. If I add in my next tax return, I could be done as soon as April 2013.

When everything is paid off, I’ll be able to save upwards of $800-1,000/month for a down payment. And I’ll be able to say I paid off $28,000 of debt before the age of 28. Talk about motivation!

Have you ever suffered from debt fatigue? What did you do to get out of it?

PS – Thank you again to everyone who wished me a happy birthday on Facebook, Twitter, Instagram, email, etc. this weekend! xo

  • I’ve definitely suffered from debt fatigue. But I also like paying off debt also because I like seeing progress. Can’t wait until it’s ALL gone!

  • I’ve barely been paying my debts for any amount of time and I’m already sick of it. It is the most miserable thing. Nearly every day I think about what I could do with the money that’s currently going towards my debt: replace my stolen iPhone, go somewhere warm this winter, buy a TV, start saving for a car, invest more in the stock market. I daydream constantly about quitting my aggressive debt repayment, going down to the required $200/mo payments, and spending the extra $500/mo+ on myself.

    The only thing keeping me relatively on track is focusing on the next six months — or really, 6 payments. Once I get through those, my Federal Student loan will be paid off. Then almost immediately afterwards I’ll get my income tax return, and that will put a huge dent in my Provincial Student Loan (I’m hoping at least $2,000). I keep telling myself if I can make it to that without screwing up, I can maybe take a month off and buy an iPad or whatever (and why not? It will mean I’ll have kicked $8,000 worth of debt ass!). I’m generally really an advocate of living in the present but I can’t stop thinking about January 2013. I NEED TO GET THERE.

  • I haven’t hit the debt fatigue yet–but I’ve only been doing this for a few months or so. Okay a little longer but I’ve only been really kicking butt at it for a few months. I’m sure I’ll get there but I try to keep things interesting right now by playing a game with myself with my debt–how fast can I get this debt paid off compared to how fast this debt was paid off? It’s not the most fun game but it works for now!

  • April 2013 is so soon! You’re so close!
    I paid off $100,000 of debt post university and it was a very hard few years. It got so frustrating that I couldn’t do things with people or buy the things I wanted. Funnily enough though, now that there is no more debt and we’re saving for a house, I don’t WANT to spend money on clothes or stuff. I always remember how much time and pain and suffering it took to pay off that debt and I don’t want to do it again!

    • I think I’ll be like you – to a point. I need a new bed desperately and want to go on at least one trip, even if it’s a cheap one. Then I’ll save save save for a down payment.

  • Yeah definitely. It’s a discipline and like everything else, you can get burned out. I think the key is to find a new perspective on the situation, and I think you’re doing that. But I feel your pain, and I need to take my own advice!

  • Debt fatigue is a total bitch. That’s why we’re throwing everything we possibly can at the debt, rather than doing small chunks spread out (some for e-fund, some for house fund, some for debt, etc). Just ready to pay off our beloved car – we’re scheduled to do it in October but I am hoping we can pay it off in September. It will be awesome to have no debt payments! (And then we’ll start bulking up our e-fund.) For me, personally, it’s just easier to funnel all of the money toward one thing at a time, rather than spread it out into little pots.

    That doesn’t mean that it’s easy, by any means, but it sure does feel good to see our debt decrease by $2000+ a month. I still dream about spending that money elsewhere though…my natural spender is constantly thinking of all the fun & pretty things I could buy with that money. However, we’ve decided to plan a big expensive trip in May (we’re going to NYC), so that is extra motivation to clean up our mess now. And yes, we’ll be saving before we go, and will only be spending what we save! No more debt! :]

    You’re doing fantastic. If I had a single income stream I don’t think I’d be able to save like you. Keep it up, C!

    • Debt fatigue *is* a total bitch. Man, I wish we were saying this out loud over a glass of wine! Anyway, you guys have been a huge inspiration for me, lately. So happy we are email buddies!

  • Nuts, I didn’t know it was you birthday! Happy belated birthday, hope you had a nice weekend besides #pfworkingout :) I totally know what you mean about debt fatigue but I think giving yourself reminders like this about how you intend on paying it down and how you can get it paid off sooner than budgeted will probably help give you that motivation to keep on going again! That and looking at pretty houses to motivate you to save up for a downpayment also helps :)

  • Debt fatigue? Been there, done that – paid off uni costs, car costs, mortgage costs,, etc etc, – and not 100% non-stop either otherwise I would have crashed mentally trying to do it. Look, you can run any machine non-stop at top speed otherwise it wears out. You instead have to: ta daaaa – “pace yourself”. So, when looking for answers, you go to your friendly Google search to find the answers. And – voila! – here ya go –

      • Yer most welcome Cait. Actually (I hate to break the news to you) but one is never 100% debt free – and certainly not by 28! :-) Ever heard of replacement debt budgeting? It refers to you also saving up to eventually purchase / replace the future wants and/or needs in your life – like that depreciating car that your are paying off. No worries though – it’s all a part of living and enjoying life.

  • I’ve suffered from it too. But at least you aren’t having the urge to spend! That was how I was coping after debt fatigue…but to help it, like you, I made some new goals! I focused all of my energy into saving for a down payment for a property and I also tried to pay a lot towards retirement. It feels so good to save!

    Happy belated birthday love!

  • Debt fatigue is a big issue for us too. We cut back, and back, and back; make a little progress, then get fed up and spend far more than we can afford, wiping out all our progress. I like your plan, it seems realistic, plus in less than a year you’ll be debt free!

  • I think you are in the home stretch and you have dedicated so much to this process you’re not even going to WANT to take a break–the end is in sight! You are going to feel so much better with that debt off your back :)

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