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

Patriotic Book Bag

My daughters and I love a challenge. So, back in late May we decided to take each other on in a $5 Dollar Store Challenge. We found inspiration over at Lindsay's Blog, Living With Lindsay. This is how this challenge goes. You shop your local Dollar Store spending no more than $5 on supplies. Then you put your purchases together, in a different way and make something brand new. You CAN use SOME supplies that you have on hand at your house already to complete it. For our challenge, we decided to put in that it would have to be something patriotic, red, white and blue, or something using 4th of July type supplies, knowing that the completion date would be right around the first of July.
I walked in the door of the store about a month ago and found some really nice, thick placemats like these. The ones I picked up were red and white stripes with a blue star pattern. I was already thinking a purse of some kind so I knew I would need about 3; one for each side and one to cut up for the b…

Grave's Disease

The Picture - Half Empty or Half Full?
Many of you who know me know I've been fighting a battle with Graves' Disease for about a year and a half. It was diagnosed in February of 2007. I was so very sick back then I actually thought I was going to die! One of the main symptoms was a rapid heartbeat and mine was probably 110 beats a minute. I was put on Methimazole, about 40 mg. per day to knock down the worst of the symptoms. That has gradually been reduced until now my dose is 5 mg. a day. Then I got some really bad news this week, my numbers are beginning to rise again. My Dr. called on Wednesday and told me he wanted to do the radioactive iodine treatment. I just don't feel ready for that at all. He gave me until the 7th of November, my next appointment, to "see the numbers change". He says to take the medicine every other day and in two weeks go off it all together. Yeah, the numbers will change and it won't be for the better I'm sure. So, I went on the…

Coffee T. Rice House

Isn't this a beautiful Victorian Style home? You can't see all of it because of the shrubbery and trailer park at the base of the house. It made me curious about the history of the house so I looked it up. Here is what I found. This is the historical information I found written HERE.
Coffee T. Rice House Oceano, California
History and Description:
Coffee T. Rice was a wealthy financier, with enterprises throughout the State, who migrated from Ohio to San Francisco. When a railroad was surveyed through this area he envisioned an industrial center here and acquired various properties close to the right of way. He introduced celery production to the area.
Rice started construction on his home in 1885 using the same craftsmen that were working on the Pitkin House. The house originally had 20 rooms and was painted yellow. Surrounded by well-kept grounds with various trees and a sundial, the house was approached by an oval driveway and a stone-pillared entryway. The grounds also included…