Should We Destroy Our Debt Or Create A Consistent Payoff Plan?

This year has been a crazy one for the history books as far as our lives go. There have been many changes for the good, like getting married, and many unexpected events that didn’t turn out the way we expected them to,  such as Tori’s second short term disability stint.

Throughout all of these changes and events there has been one constant financially for us. That constant has been our desire to destroy Tori’s student loans as fast as possible. The problem is, we’re just like everyone else and we’re eagerly anticipating the end of being in student loan debt. We’re just sick of paying for it and debt fatigue is slowly starting to set in due to this year’s craziness.

Why Debt Fatigue Has Set In

This has been an incredibly challenging year financially when you consider everything that has happened. Tori started the year on disability from her first foot surgery, went back to work for a short time and then had to go back on disability to fix another foot problem resulting from the first. She’s spent more time on disability at less than full pay than she has spent working.

In between disability stints, we decided to repurpose the money I saved to help pay off Tori’s student loan debt after marriage. We decided we were going to buy a house in town where we wanted to end up for the long-term. This move had another consequence other than having to deal with a house purchase.

We decided to turn our old townhouse into a rental property. It took a lot of our time and sat empty for a few months leaving us with two mortgage payments at the same time. Luckily our townhouse payment was more like a car payment and that’s OK because we don’t currently have any car payments!

As if that all of that wasn’t a big enough challenge, we got married this year! It was an awesome wedding and luckily we had our full wedding budget in cash before the year started. Tori did an awesome job managing our budget and we didn’t overspend for our wedding despite some of the small hiccups.

Oh yeah… with a wedding comes a honeymoon and those aren’t cheap! We recently shared our complete cost report of our 7 day Carnival honeymoon cruise. We had been saving for this too, with a small payment to ourselves out of each paycheck.

With everything that has happened, we’ve still managed to throw all of our extra money at paying down the debt. So far this year we’ve paid down Tori’s student loan balance by $16,937.06.

And just in case you think I’m complaining for everything that has happened this year financially, I’m not. We planned ahead for the expected events and we’re prepared to take care of the unexpected ones. I’m merely documenting what this year has put us through.

What Should We Do Now?

We have three options the way we see things currently. The first is to just make the minimum payments on all of Tori’s loans. While this is an option, we’re not even considering it because of the variable rates on some of these loans. Another reason we’re not really considering this option is because the loans would not be paid off until the middle of 2018. Yuck.

Our second option, as we see it, is to come up with a number we’re comfortable with putting toward the loans every single month and just stick with it. This would accelerate our loan payoff but allow us to save for other goals and spend a bit on ourselves from time to time.

Our final option is to continue on our current path of student loan debt annihilation. We’d take all of our extra money every month and throw it toward the student loans to make them disappear as fast as possible. This will definitely get us to the point of being debt-free (except the mortgages) faster, but it won’t be quite as fun along the way.

Don’t worry though, no matter which path we take we’re still saving plenty for retirement and taking care of anything that requires our immediate attention before we throw the money at the student loans.

So which path would you take given our crazy year so far? Would you reduce our efforts to minimum payments, a constant schedule or total debt annihilation?

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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. if it were me, i’d probably mainly stick to a consistent schedule with maybe some extra payments here are there. but also, my student loan balance is a really high (damn law school) so it’s hard for me to justify making extra payments for myself right now when i know it’ll barely make a dent. i think if i were closer to the end though, i’d want to knock them out fast.
    — jackie

  2. We made a reasonable budget that we thought wouldn’t feel like deprivation and said every cent over what we spent was allocated to principle payments or to a specific investment goal. It worked well and we crushed about $100K of debt in 14 months without it feeling painful.

  3. I think option two might be best, at last until the new year. Around the holidays, it’s nice to have a little extra money to set aside for gifts or travel. Then in the desolate months, January-March, debt annihilation, then maybe back to option two in the spring months.

  4. What about a mix of options 2 and 3? Decide on a minimum you’ll contribute every month, and then every other month or every third month just go bananas and put as much as you can on the loans. It’s more like interval training. 🙂 Wow, I like this idea so much maybe I’ll write a post about it! (I don’t usually go for the diet/workout metaphors in PF.)

  5. If you’re experiencing fatigue, I would probably stick with the middle option, which is paying a fixed amount. At some point, you may become ready to attack it again, at which point you’ll likely have made significant progress.

  6. Bryce @ Save and Conquer says:

    Since you are already doing it, I would stick with student loan debt annihilation. Get that over and done with. If you just cannot keep up with the annihilation plan, though, then back off a bit, as you and others have suggested.

  7. I like the automatic approach and throw extra money at when you can. I use this with my mortgage and car loan.

  8. I would try to knock off the debt for sure. When I had to pay it, my main concern was to get it out of my mind and not drag it forever. The reason I chose to finance my car for 4 years (when I could have stretched it for 8-10, as others would do) and I didn’t refinance, even when it was pretty difficult to pay (lost my job).

    So I’d keep on budgeting and living frugally while paying off the debt as fast as possible. Take each loan, pay it off, then move to the next one. Living debt free is really worth the hassle, you can then invest and have as much fun as you wish 😉

  9. My approach would likely to be to start with the consistent payoff for a few months while the dust settles, and then start destroying it. I would have a hard time coming to terms with the interest expense, so I’d want it paid off as soon as possible.

  10. Moderation in all things 🙂
    That being the premise, I would stick with a constant repayment plan. As you already point out in the post, total debt annihilation may not be all that fun along the way. With the consistent plan though you are happier I’d assume and also get to do other things with some of the money. Its fun, it doesn’t put too much strain on life and finances, its sustainable and it ultimately gets the job done.

  11. I would go for the second option at least you can work around that amount while keeping your budget afloat. Good luck!

  12. Wow, you certainly have been through a lot this year.
    Since I’m the type of person that hates having debt hanging over my head, I would be inclined to just get rid of the remaining debt, at all costs. When I was in upscale specialty retail, I paid off a $100K business line of credit used to finance my store all in one year because I just couldn’t stand having the debt. Every person is different though…

  13. I would get rid of the loans as quickly as possible. I’m also very debt adverse, so take my advice with a grain of salt. 🙂

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