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The Hard Wins


Happy Tuesday Everyone!

I won’t have a weekly debt update this week, since I didn’t pay much off. Instead I want to focus on the challenge my last 3 loans will be to pay off.

On last week’s post, I was asked a number of questions in the comments section by Judi; these got to doing some thinking. The questions pretty much pertained to the following:

  1. Do you think your last 3, but largest debts, will be mentally easier or harder to payoff than all the ones before? And…
  2. How am breaking down these larger loans into smaller wins? And…
  3. How are you planning on keeping your focus during this time?

The first two are relatively easy to answer. I just KNOW that these last few are going to be BY FAR the hardest to payoff. From a financial standpoint, they represent nearly 1/2 of my student loan balance. From a mental standpoint, they are mountains compared to the mole hills I’ve climbing thus far. The only comparable balance would be my car, which had an August ’13 balance of $11,700 BUT I wiped out most of this in one swoop with an old 401K account withdrawal- I don’t have any more large accounts I can withdraw from if I’m feeling that “itch” to just pay another one off.

As far as the 2nd question, ever since I aggressively started paying off my debt, I’ve kept a line of “Next Steps”. For each balance, large or small, my “next step” or target was the next nearest $1,00 increment. So if my balance was $7,575, my target was $7,000 and so on and so forth. This idea was definitely not mine; I got the idea from Joan over at “Man vs. Debt” (Side Note: I really like what Baker accomplished, but they have since seemed to have packed up and moved on over there…). I thought it was one of her best moves, and replicated it in the same fashion into my own debt payoff.

As for the 3rd question, I don’t really know. Since all my loans to this point have been relatively low balances, I’ve only had to go a few months in between the wins of having paid them off- which kept my focus the most. But now it’s going to be months and quite possibly years between wins and the ultimate goal of $0 debt, and I’m not sure what to expect other than difficulty. I’ve maintained my frugal lifestyle since graduating college 6 years ago, but at some point I know I’m going to want to see some tangible rewards for all my hard work up to this point. So it’s like, can I keep this going for another year to 2 years? Just having a savings account worth more than a couple grand would be enough.

Have any of you paid off a large $20k+ debt? If so, how long did it take and how did you maintain focus?

(On a side note: I would like to save more in my 401k, ASAP, while I pay off these last large chucks. I’ve filled out the paperwork to increase my contribution from 4 to 10%, but haven’t handed it in, yet. What do you think?)

I will be posting my May in review, but I’m not sure I can get to it today, but certainly by the end of the week.


  • Reply Angie |

    Almost all of our loans started with a balance >20k so I never got the feeling of quick wins. My way to stay motivated was to update my loan payoff spreadsheet. Watching the amount of interest accumulating drop each month was motivation in itself. As I added extra payments I could visualize the change in the full end date. Also, it was a great tool to have to evaluate changes to the debt payoff plan.

    How does it look if I delay extra payments by saving an emergency fund?
    How much longer will my debt payoff take if I increase my 401k savings, take a different job, buy a house, etc.?
    How much would I save by playing with 0% balance transfers?

    • Reply Matt |

      That’s very impressive Angie! This is some great thinking for the long term payoffs. I’ll be incorporating these into my own debt spreadsheet. Thanks!

  • Reply Walnut |

    I second the amortization table for each of the remaining loans. I dedicated a lot of money to mortgage payoff in my last house and running scenarios and calculating the benefit of the giant principal payments versus not making them was hugely motivating.

    As for the 401k, I definitely support increases there. Just analyze the cash flow effect and recognize how many months it may add onto your payoff schedule.

    • Reply Matt |

      You and Angie both have some excellent thoughts on the amortization table. I’ll have to incorporate it into my own spreadsheet.

      As for the 401k- I handed in the paperwork this morning to increase my contribution to 10%. It’s going to alter my payoff schedule (obviously) but I think it will make me feel better knowing I’m increasing my retirement savings at a faster rate.

  • Reply Den |

    My advice would be to keep setting your next steps for each goal and really focus on your lowest loan (about $7,000) and throw anything extra at that loan…..then (and this may be controversial) take a break from over thinking it all.

    You’ve got your budget set and your expenses low. You have some fun money set aside each month and you’ve got some fun planned for the summer. Continue to make your monthly debt payments, keep your expenses within your budget…..but then go and enjoy your summer.

    I’ve fallen into the trap of over thinking our debt payments, re-doing a perfectly good budget, and constantly thinking about debt to the point where I wasn’t enjoying our planned (and budgeted for) fun. Your last three debts are going to take patience and time…..so let the power of budgeted payments work for you. You’ll be amazed at how much progress you will have made by the fall.

    And I think it’s great that you are increasing your retirement contributions!

    • Reply Matt |

      Den- you gave me a ton to think about. Since our Disney trip is in July, I’m leaning towards using the month (or at least part of the month) as a “vacation” from debt payments. I’ll make the minimum, but I’ll sock away what I would normally use to pay and put that towards our trip and other fun ideas we’ve had, but haven’t done yet. Thoughts?

      • Reply Den |

        I think that’s a great idea. Take a month’s break from debt payments (except minimums), use the money for your vacation, then come back refreshed and ready to hit the debts hard this fall. Some people won’t agree, but I think if you don’t take care of your mental debt repayment health (especially since this is a marathon, not a sprint), you could burn out….have fun!!!

  • Reply April |

    Jumping from 4% – 10% seems a little extreme, especially while you’re still paying off debt. I recommend increasing to 5%, then every 3 months or so, re-evaluating and perhaps increasing one percentage point at a time. (Also ask if you can do so online. Ours is really easy to change online!)

    • Reply Maureen |

      I disagree with Angie. These are your compounding years and you can afford 10%. What you get on a compounded interest return over the next 40 years FAR exceeds what you are paying on interest for “measly” extra 6% (above your current 4% contribution) of disposable income that you would put towards the loan.

  • Reply Brooke |

    It’s funny — I was thinking about targeting my largest and most expensive loan, currently at 44K at 7.65%. It seemed large and so I immediately saw shifts in my behavior … wanting a larger emergency fund because the payoff seems longer, wanting quicker wins, wanting to take vacation instead of staying gung-ho on debt repayment. etc.

    We’ve shifted my focus back to my car, currently at 6K/1.99%. But, we’ve decided at a minimum to first pay double payments on that largest loan while designating the smallest loans as our main “target.” Our thought is that by the time we get around to the largest loan, it won’t be AS overwhelming though it still will probably be in the 35K range.

    We have saved 10% of our income (including employer contributions) for retirement throughout the entire process. I’m not willing to sacrifice retirement savings for 4 years to pay this stuff off faster. Especially since my husband is already in his 30s. I’d rather try to make extra money than get way behind on retirement savings.

  • Reply Shauna |

    I recently upped my 401k and let the paper sit on my desk for a week. I saw it sitting there one day and just decided to take it down. You’ll never get back these years of compounding, and your tax savings will offset some of the lack of income now. And you’ve already calculated that you can afford it. I’ve decided to set regular reminders on my calendar to increase my contributions by 1% twice a year. That way it’s a small effect but in a few years I’ll have a nice nest egg.

  • Reply Judi |

    Wow great tips from you and the readers! I really like Den’s point about just staying the course and not switching priorities too much since that seems to be one of my bigger issues 😉 I also liked your idea about making your own mini goals to get the wins. I think you’ll be able to keep your focus since you’ve done such a great job thus far.
    We increased our retirement contributions when we accomplished our small goals just because it was the right time for us to set other goals but I think the choice is yours!

  • Reply Kayla |

    This post is SO RELEVANT to my life right now. I graduated college with 5 student loans, and through deferment and not making enough to afford payments (I applied for an income-based repayment plan and they just laughed), I only just started paying them in December 2014. I got aggressive on the Dave Ramsey plan this month and paid the smallest two in full. Talk about motivation! But the smallest ones were about $4,000 combined and the next ones are in the $5,000/$5,000/$6,000 realm. It’s super intimidating to see those numbers. They do feel like mountains over mole hills.

    All of that to say… the concept of writing out next steps is BRILLIANT. And I think I will steal that idea. I’ve socked away my emergency fund (again, I’m a Dave Ramsey cheerleader over here) but $1,000 just didn’t seem like enough of a safety buffer for me. So I’ve given my emergency fund it’s own emergency fund… but I miss the days of having more in my savings. I try to focus on how WONDERFUL it is going to be to have an extra $500 a month to sock away in savings versus pay someone else. But keeping motivation is tough.

    Wishing you the best on your journey!

    • Reply Matt |


      I can absolutely relate to everything you wrote to me- you’ll knock out those larger debts in no time. I also remember the good ole days of having a larger savings plan. I’ve talked about the internal conflict of paying off debt or having a larger savings a couple times, but keep falling back to the debt payoff- again, I also agree that I can’t wait to have that money in my pocket vs. giving to someone.

      Wishing you the best on your journey, as well!

So, what do you think ?