Reader Question: Should I Destroy My Debt Or Live My Life?

Today’s post addresses a reader’s question. Do you have a question you’d like me to answer? Contact me!

Recently I had a reader write to me asking for advice about their financial situation. The reader has a lot of student loan debt, similar to the amount my wife had, and wanted to know whether they should focus on paying off their debt as quickly as possible or focus on living their life.

They want to start a family and buy a home in the near future, but worry their student loan debt may need their attention first. I completely understand the situation this person is in as we just recently paid off over $80,000 in student debt in just under 3 yearsHowever, no two situations are alike and many people choose to live their lives in different ways.

The way I see it, this person has a couple of options. The first is to sacrifice now and pay the debt off as soon as possible. The second is to pay the loans off over the life of the loan and live a modest life throughout the process. Of course, there is middle ground, but those are the two main decisions to start pondering.

Pay The Debt Off As Quick As Possible

We personally decided to attack the student loan debt and destroy it as quickly as possible because we didn’t want it hanging over our head. The benefit of paying your debt off as fast as you can is the fact that once it is paid off, you won’t have to make another payment on it ever again. That frees up your future cash flow for other adventures from the day you pay the loan off into the future. The downside is you’ll have to sacrifice in the short term to get it done as quick as you can.

By paying off the debt sooner rather than later, we were able to open up many options in our lives that we never would have been able to have if we still had $80,000 of student loan debt. However, we greatly sacrificed many things in our lives during those three years we were paying off debt. We definitely didn’t live a lavish lifestyle during that time, but we lived a life we were accustomed to living as recent college graduates.

In the case of the reader, once the debt is paid off, they will have more cash flow available to save up for a down payment and to start a family. Of course, they’ll delay the start of their family and saving up for a down payment while they pay off their current debt.

Live A Modest Life With The Regular Loan Pay Off Schedule

The other option is to simply pay the loans as normal and live a more modest lifestyle until they’re paid off. By choosing this option, no extra money will go toward paying down debt and that extra money can be used instead to help start a family or save up for a down payment.

During this entire time, payments will still need to be made on the original debt so you won’t have as much free cash flow to reach current goals. You will be able to spend a bit more now, but over the full life of the loans you won’t have as much money available to you due to the interest you must continue to pay over the life of the loan.

Some people are OK with paying interest in order to spread out large costs like school and that’s perfectly fine as long as you’re aware of the cost. If interest rates are low and you have plenty of money to live on otherwise, it is a perfectly acceptable decision to make as long as the debt isn’t a bad type of debt.

However, I would never suggest incurring excessive amounts of debt based on your future earning potential and I would strongly suggest that consumer debt, such as credit card debt, should never be an option. Personally, I think mortgages, reasonable student debt and certain types of car loans are the only types of debt that should be incurred.

This option will free up some money to raise a family and buy a modest house in the nearer term, but you sacrifice the interest payments that could make you richer over the longer term. You must decide which is more important to you and be comfortable with that decision.

Regardless Of Which Option You Choose Don’t Forget To Plan For Your Future

Whether you choose aggressive debt pay off or paying the loans according to their terms, don’t forget that the rest of your life must still be taken into account. Don’t short change yourself by not saving for retirement or for your other future goals.

Life should be lived in moderation, no matter which path you choose, and you shouldn’t sacrifice your future self for short term desires such as getting rid of your debt a couple months sooner or buying that Lexus that you think would make your life complete, but is completely unnecessary. Pick the path that works for you and have a plan.

Personal finance is very personal, after all.

What would you do if you were in the reader’s situation? Would you pay the debt off quickly and sacrifice starting a family and buying a house in the short term, or would you pay the debt off slowly over time and start saving for a family and house?

Do you have a question you’d like me to answer? Contact me!

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About Lance Cothern

Lance Cothern, a Certified Public Accountant (CPA) licensed in the Commonwealth of Virginia, is the founder of Money Manifesto. You can read more about him here or connect with him on Facebook, Twitter, Google+ or Pinterest.


  1. Gosh, this is such a tough one. On the one hand, it is our natural inclination as PF people to say, yeah, front load paying off your debt first obviously. On the other hand, depending on the age of the couple, waiting until ALL of their debt is gone AND THEN buying a house might delay starting their family to way later than they’d expected or might be reasonably safe. That said I agree that being debt free gives you a lot more options if you can pull it off.

    • Yes, PF bloggers generally say kill your debt quickly, but they’re only looking at the dollars and cents and not the whole life picture. It is a very tough decision and will depend on the person as to what decision they make.

  2. I strongly believe in getting your own financial house in order before having a child. I don’t suggest that all debt should be paid off before baby, but a solid and realistic action plan should definitely be in place.

  3. I think you also have to factor how long it would take to pay off the debt in either scenario. If the debt can be knock out in a short period of time, maybe it doesn’t change overall life plans that much.

  4. A combined strategy is often something to consider as well. Pay extra on the student loan debt but leave some wiggle room for changes. There’s nothing that says that the only two choices for paying the debt off are 3 years or 20 years. Targeting for seven, as an example, would be fine.

    Another thing is to take one approach but evaluate along the way and make changes as necessary. Maybe go full throttle for a year, then dial it down. Either way you still come out ahead.

    • Combined is definitely an option. I think I should have made it more clear that the first decision is whether to just make minimums or decide to pay more, rather than full blown pay it all of now.

  5. Without the student debt, your DTI ratios are more favorable. This will allow for more flexibility when shopping for a home/mortgage. Just something to think about if home ownership is your eventual goal. It may be worth living slim for 3 years to have the ability to get your dream home rather than settle somewhere less permanent.

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