Recently I shared how intensely I think people should destroy their debt depending on what type of debt they have and the interest rate of the debt.
We’re pretty lucky that we didn’t have any of the worst types of debt, which include payday loans and credit cards.
However, as you may be aware of, we do have a mortgage and once had a lot of student loan debt left that we were working on paying off.
How serious are we about our different types of debt?
We decided to pay off our student loan debt as fast as possible. In fact, we paid off over $80,000 of student loan debt in less than three years.
That said, we have no intention to pay our mortgages off any faster than their 30 year terms.
While we were paying off our debt, we were trying to decide whether or not we should treat ourselves with a couple of larger purchases before the student loans were gone.
Here’s what we were considering.
What Are We Considering Buying
At the time, we were considering buying a roughly $500 laptop and a much larger purchase of $4,000 fencing in our backyard.
The fence would have been nice so we could let our dog, Daphne, roam around without going on a leash. This also would have freed up a tiny bit of our time since we wouldn’t have to physically take her out multiple times a day.
Why We Didn’t Think It Is A Good Idea To Buy
Tori’s student loan debt hung over both of our heads because, while it was necessary to pay her way through college, she ended up with a crazy amount of debt. We were constantly reminded of the debt every time we made a payment.
By making either of these large purchases we would have been delaying our student loan debt payoff. The loans would hang over our heads that much longer.
We were also against taking out debt for purchases such as computers or a fence. We felt these should be cash purchases and I think 99% of the people reading this will agree.
While we would technically have paid cash for these items, to us it would feel like we’re taking out a loan to purchase either the computer or the fence. What was our logic?
By purchasing these large items while still owing money on the student loans we would have essentially been buying something else instead of paying off and lowering our debt. So, instead of having less debt we would have had more stuff.
In our minds, that is almost as bad as taking out more debt to buy more stuff.
Why We Might Have Made The Purchases
Paying off over $80,000 of student loan debt is more of a marathon than a sprint. By balancing debt pay off with our other goals, it could be argued that we’d end up paying the debt off in a more controlled way.
By planning purchases like a laptop and a fence, we would have been less likely to splurge on unplanned purchases along the way.
That said, we did already have a mini fun budget each month so we already had the little splurges baked into our plan. If we budgeted to buy a laptop or fence we would have been increasing this mini fun budget by quite a bit.
What Did We End Up Doing?
We ended up purchasing the laptop a few months before the student loan debt was paid off. It replaced an aging machine that had slowed down significantly over the years. However, we paid off our student loan debt just four months later.
Ultimately, we decided against purchasing the fence. Even after the student loan debt was paid off, we still didn’t install a fence. We ended up selling that house, so we’re glad we held off as fences rarely add any money to the selling price of a home.
We are, however, installing a fence at our new home as I write this.
In the end, we were happy we bought the laptop. It made our lives much less frustrating and it only delayed the student loan debt pay off by a couple weeks at most.
Do you think we made the right decision or do you think we should have waited to buy the laptop until the loans were paid off?