Find the Balance: Pay Down Your Debt & Still Have a Life

I’m not in the mindset of putting every penny toward my debt.

Whaaaa? Personal finance blogger said whaaaaat?

That’s right. Because I think balance matters. And having a life.

UPDATE: I'm now debt free! Read more about The Lifestyle That Allowed Me to Pay Off Over $30,000 of Debt in 6 Years

Find the Balance: Pay Down Your Debt & Still Have a Life // Ask Allea

When paying off debt, understand two things:

  • There’s a season when you can pay off your debt all hot & heavy (like I did January thru April 2016). You set a goal, work a side gig, cut back spending, the works. It’s typically better spent as a short-term season.
  • But there’s also a season when you live a normal life. Think long-term. You:
    • Make a game plan.
    • Set a number.
    • Stick to it.

Once I paid off my car in April 2016, I shifted my budget back to what it had been before my "expedite-car-loan-payment-and-work-two-jobs" season.

For the record, those four months were really rough, and there’s no way I would have a life, my friends or my mental health if I kept paying off my debt in such a grueling way. It was stressing me out (among other things). I was pretty much a zombie.

Now that my car loan was out of the way, I needed to think big-picture and long-term.

I made a game plan.

By May, I made a new game plan:

  • Pay off my student loan debt (over $17,000 remaining at this point)
  • Build up my savings (to $10,000)
  • Stock up my retirement fund (to $30,000)
  • Do all of this by the time I’m 30 (June 2019)

Specifics matter, y’all.

Helpful Tip: Use real numbers and give yourself a timeline. It’s motivating and you can actually track your progress.

I knew that if I found a good balance between paying/saving/stocking, plus I kept my budget on track, I could reach these goals, live within my means and not go further into debt.

By setting these goals, I’ll be in a great place with savings, retirement and some solid money habits in place.

I’m not just hoping it’ll happen — I’m making a plan. I’m telling my money where to go.

I’m boss. Not the money.

UPDATE: I'm now debt free! Read more about The Lifestyle That Allowed Me to Pay Off Over $30,000 of Debt in 6 Years

I determined to not let Current Me be the fault of my plan not working.

(Honestly, even writing this, I feel like I’m on some *mission* or that I’m going to battle. It feels epic to me.)

My game plan shifted a lot as I debated on how quickly to pay off my debt, whether I should put money into savings first, then pay down my debt, or the other way around, or if I should pay an equal amount toward my loans and saving simultaneously, etc.

I did a lot of playing around with numbers, but thennnnnn...

I set a number.

My number was $450. That’s how much I’d put toward my loans each month. I was going to tell that money exactly where to go. I had a plan, ya know? And to the plan I’d stick!

That $450 each month would come from my full-time job salary and not depend on picking up a second job. It’s a reasonable number for me, considering in 2015 I was used to putting $250 into savings and making a student loan payment of $200 each month. (When I took out my car loan, I pulled $167/mo from what would have been going into savings.)

So my $450 would come from:

  • What was my car payment (before I paid it off), $167
  • My minimum student loan payment, $200
  • The difference of what I had been putting into savings before my car loan, $83

As part of my game plan, I told myself that any extra money I earned would have a designated place to go.

For me, this looked like:

  • Coaching sessions: extra income would go toward the cost of flying/attending FinCon
  • Cash back from my reward credit card: $50 every few months would go toward student loans (I didn’t plan on that money to support me, so why not put that toward my debt?!)
  • Babysitting: extra money I could spend on whatever I wanted (like goods from a farmer’s market or eating out with friends)

Related: How I Paid Off Over $12,800 in Loan Debt in One Year (Both Car + Student Loans!)

I’ve stuck with it.

Each month, I budget $450 toward my student loans. And, actually, in the last few months, I’ve upped that number to $550 each month. I know it sounds like a lot — especially since my minimum payment is only $200 — but the faster I pay down my principal, the more I’ll save on interest.

Related: Perks of Paying Off Debt Fast

Since I’ve upped my “number” to $550, I’m particularly flexible if I would rather only pay $500 toward the loans one month and spend the $50 difference on something else. They’re my rules and I can break them if I want.

However, I know my priority is to pay off my debt. The end is in sight — I plan to be debt free in less than 18 months. It makes it even easier for me to say “no” to things don’t want (or can’t afford) when I picture my bigger goal.

I want to be debt-free, please.

Take the Stress Off & Have a Life

What’s important about setting this number, for me, is that it doesn’t fluctuate smaller than $450 — so I can hit my student loan payoff goals. But it also doesn’t have to fluctuate bigger than $450, either. I can, if I want (and as I mentioned, I do fluctuate bigger), but I don’t have to put more toward my debt if I don’t want to.

This goes back to “balance.” I like knowing that I’m paying down my debt early, saving interest and cutting off years of how long I’ll be in debt. But it also means I can spend money on things I like to do for fun, even if they cost money.

Related: Choose Your Own Adulthood 

Debt prison tells you that spending money on anything but your debt is the worst thing ever.

No one likes to be in debt prison. I hate debt prison.

Sure, I’ve got a plan to pay my debt, but my budget also gives me margin to spend money on a new dress, concert tickets or a road trip to Michigan. I’ve also taken a trip back to London, which is pretty sweet.

Related: Perks of Paying Off Debt Fast

I know that I’m covering my tail long-term with my debt repayment plan, but I’m also not withholding all fun things from myself 100% of the time.

I allow myself to “roll over” funds in my spending budgets from one month to the next. Just because I didn’t spend all $35 of my entertainment budget in September doesn't mean I “have" to put that toward my debt with all sorts of urgency. Nope. (My rules, my game plan, remember?) I’d rather roll that $35 into October so I can go to a pumpkin patch or buy a new surprise album from Taylor Swift (which didn’t happen, but it’s okay) — or both.

For my mental health, I need to know that I can say “yes” to fun things with friends. I don’t want to rule out spontaneity. Also, I’m young and want to enjoy my 20’s.

Making a game plan, setting a number and also having a social life are what matter to me.

Balance is key to getting a little bit of everything, while not losing your mind or friendships in the process.

What does balance look like in your budget — between paying down your debt and still having a life? Do you have a “number” you stick to on a regular basis for paying down your debt?