Skip to main content

How We Paid Off Debt Before Retirement




You can't be in debt and retire. Well, you can and plenty people DO live that way, but I would not suggest anyone do it.

My husband told me in 2015 that he would like to retire in 2017. That left just 2 short years to climb out of debt. We had one car we owed on and three credit cards at the time. If I remember correctly, it was about $20,000 of household debt plus a mortgage on our home. Since it was just the two of us and we live frugally, it wasn't a problem to get going with a "debt snowball" right away.

Have you heard of a debt snowball? Its a Dave Ramsey idea on how to eradicate debt pretty fast. You list your debt from smallest to largest balances. The smallest balance debt gets the most money thrown at it while the remainder debts get paid minimum balances. Once you knock out that smallest debt, you add what you were paying to it along with the payment for the next to smallest debt and that debt gets all the extra money while the remainder debts get just the minimum payment and so on until all your debt is gone. Of course the house takes a bit longer, and for us, we knocked it down quite a bit but not all the way out. However, we were able to refinance the remainder at a smaller interest rate and a WAY smaller payment that could be paid easily in retirement. Have we ruled out trying to pay THAT debt off sooner? Of course not. We would LOVE to be able to pay that down quicker than the 30 year loan it is on. But on the other hand, we ARE able to use it for a majority of our tax deductions every year so it does work out for us. And by having such an economical payment, we CAN put more money to that loan each month. The debt snowball worked for us and I'm SURE it will work for you too if you have the desire and fortitude to kick debt IN THE BUTT once and for all!

The next thing we did was to live on less. Quite a bit less! And the extra we WEREN'T using each month went to paying down the debt and beefing up our savings. This means really budgeting money each month into fixed and flexible amounts that we could live with so we didn't have the pinch of money nagging us to go out and spend, spend, SPEND! And learning to adhere to a budget is a good thing to learn before you find yourself on a fixed income.

We also went to a financial planner to discuss what retirement would look like living on the amount of money we had saved so far through my husbands 401K matching program, his pension and social security benefits. After all, you REALLY need to know that figure and know that it will be enough for you to live on now and into the future with the rising cost of living. And we also made an appointment with social security to discuss the different "tiers" offered based on what age you begin taking it. Also, very informative.

I will share more in the upcoming months about our budget categories and ways to live life fully within those parameters so stay "tuned".

Some budget books I like that might help you too....









Thanks for stopping by today and if you haven't put "Living On A Budget" at the top of your list of New Year's Goals as well as  "Steps To A Debt Free Retirement"..... Might want to seriously consider doing it. 

Comments

Popular posts from this blog

Hey Retirement! Don't take OUR Date Night Away!!

"Wait! Did we budget for Date Night??"

Wednesday night is Date Night at our house. It's been that way for a LONG time! And we didn't want retirement to do away with our weekly fun. So today, I'm going to cover some good ways to keep that fun coming and be able to pay for it with slightly reduced funds.
Put some money in the budget. Analyze what you can afford and how many times you will be going out during the month. If you get paid twice a month, budget for two date nights. If you get paid weekly, you only need to budget it in for the week. For us, we are getting paid once a month so we will budget for 4 to 5 nights out. We set aside about $20 to $25 per week for date nightRemember, it's about spending time together not how fancy the dining is. You can make a picnic one week and then spend double the following week at a nice place. You can make dinner at home and go to see a play or movie. In our case we could go to the beach with some hot dogs, potato chips a…

Living on Less.....WEIGHT, Part 1

It's not just about the money. Living on Less can also mean having less "stuff" cluttering up our homes, less stress and drama, and dragging around a whole lot less weight. 
The topic of the day... What are YOU "Weighting" for?
I think I've always had a weight problem. I was active enough as a teen and young adult to keep the pounds in range. But when I started having kids, I put on weight with each one. In 2001, and 230 lbs., I'd finally had enough and opted for Gastric Bypass Surgery so I would never have to think about being fat ever again and yes, I'm using the word FAT. I like to eat though, and only ended up losing a total of 35 lbs. with gastric bypass. Don't get me wrong, if you do it right, you MIGHT not have the same results I had, but a little dixie cup size meal was just not enough food for me. I would cry and be angry at every gathering of people and food. Let's just say eating was a big part of my life, so much so that it had int…

Oui Yogurt by Yoplait. Simply DELICIOUS!

Have you guys tried OUI yogurt yet?

OH MY GOSH YOU HAVE TO!! It is DELICIOUS!
This isn't the first jar I've had. Last month we discovered this yogurt at our .99 Store in San Luis Obispo and they were selling it 2 for $1. Yes, you read that right and I'm almost scared to state that on here for fear it will cause a run on the store! I know you guys think that if it's in a .99 Store, something must be wrong with it, but that isn't so. These are in date, sealed properly and absolutely perfect.

Oui yogurt, made by General Mills and Yoplait, currently comes in comes in eight flavors: strawberry, blueberry, black cherry, vanilla, coconut, lemon, peach, and plain.The yogurt is also non-gmo, gluten free and lightly sweetened with cane sugar in the fruited varieties.It is made using whole milk rather than reduced or no fat, a long culturing time and two kinds of fermenting cultures; L. Bulgaricus and S. Thermophilus. I've tried all of the flavors over the last couple of mon…