One of the things I love most about being a personal finance blogger is reading stories about other people who have reduced or eliminated their debt.
Our debt is pretty simple:
- A mortgage – We re-financed our original 30 year mortgage (set to pay off in 2037) with a 15-year mortgage in late 2011. This will put us on pace to pay that off in 2026.
- A student loan – My wife has one outstanding student loan. It is a private loan with a rate lock of just over 2% and a payment under $100 per month. It’d be nice to pay this off early but we’re not changing our current strategy to do so. Additional cash flow would have to open up.
- Credit cards – None. We use credit cards simply to earn cash back rewards
- Car – None. We have two cars, both fully paid off.
It’s great as I see a lot of bloggers write about paying down debt, paying off debt, or discussing their personal debt payment strategies. For the most part, they’re usually pretty good.
However, there is one thing that I usually see left off, and that’s to have a ‘No New Debt’ provision, and a plan to reach it.
If you start off with $100,000 in debt, work hard, and pay off half of it, that’s awesome! What if you have $10,000 in debt, and you pay it all off. That’s great, too!
And, with most debt payment stories, that’s often the ‘end’, so to speak.
What it doesn’t address is to make sure that number never goes higher. In other words, if you pay off half of that $100,000 debt, you should make sure to do everything possible to avoid having that number go higher.
Read morePay Debt Away But Keep New Debt At Bay