Tortoising Your Way to Debt Free Forever
Posted by Gail | Filed under Balance, Money Management
Yah, I just turned a noun into a verb. Hey, people do it all the time. And since the tortoise has become the all-round symbol for “slow and steady wins the race”, I think we should embrace “tortoising” as a legitimate strategy.
Gail, what the dickens are you going on about?
Lots of people who are trying to get out of debt want it gone NOW. But it took a while to dig the hole and it’s going to take a while to get out of the whole. I do recommend strongly that if you’re carrying consumer debt that you focus on getting that consumer debt paid off in under three years so you don’t end up with debt fatigue. But there are lots of other kids of debt: mortgages, car loans, and student loans just to name a few. And sometimes, if the debt is significant, it may take a little longer to get to the end.
This is where tortoising comes in. As Confucius said:
“It does not matter how slowly you go so long as you do not stop.”
While jumping on the fast track to debt-free forever may feel exhilarating as you start out, it will take persistence and tenacity to get to where you want to be. If you don’t have the courage or the backbone to do the hard stuff, if you don’t have the stay-with-it-ness to stick with the program, you’ll be back in debt in no time flat.
There will be times when you get into very tight spots. It will seem as if everything is conspiring against your plan to become debt-free forever. But you must stick with it. Yes, you may have to adjust your plan to accommodate whatever boulder has appeared in your way, but if you keep moving like the determined tortoise you are, you’ll eventually get around the boulder and back on track.
You must also have faith in yourself. When the tortoise went up against the hare, he didn’t start the race saying to himself, “This is ridiculous. I can’t possibly hope to beat this hare. I’m wasting my time.” Nope. He just got on the road and started plodding to the end. And if you want to be debt free, you’ve got to get on the road too.
If you make mistakes along the way, don’t fret. There’s always tomorrow. You’ll get a chance to figure out what you did wrong and make it right. Everyone makes mistakes. Everyone. Stop beating yourself up over these mistakes. Learn and keep moving.
I often talk about the need to have “gumption” when you’re facing a hard task. While others around you throw up their arms in despair or frustration, you and your gumption keep on truckin’. You know you will be debt free. You can smell it. And you’re not going to stop until you get there.
Inspirational quotes on persistence abound. From Dale Carnegies “Most of the important things in the world have been accomplished by people who have kept on trying when there seemed to be no hope at all” to Franklin D. Roosevelt’s “When you come to the end of your rope, tie a knot and hang on.” You can find something that will speak to you and help keep you focused. Get on the internet and search for “persistence” and “quotes”. You’ll be astounded at what pops up.
I’ll leave you with one more that I love. This one is from Marian Wright Edelman, the first African American admitted to the bar and an activist for children’s rights. She founded the Children’s Defense Fund in 1973. She says:
“You’re not obligated to win. You’re obligated to keep trying to do the best you can every day.”
Go. Do your best!
February 1, 2010 at 8:35 am
Thanks Gail…sometimes we need to be reminded that a setback, a poor decision, whatever, isn’t the end of the world. I have no consumer debt but have a car (just about paid off), a mortgage and a retirement to save for.
I find inspiration, positive reinforcement and maybe just that something to keep me from buying that one more thing that I really don’t need.
I am not sure you’d appreciate being compared to a lighthouse but I think you’re helping to guide a lot of us through the rocky shoals of the personal finance seas.
February 1, 2010 at 8:41 am
My favourite quote is “Obstacles are what you see when you take your eyes off the goal.”
This post was timely for me Gail, but in another context. I am part of a training group for a marathon in May. We have to run some crazy distances right now to build stamina and I’m feeling a bit overwhelmed. The last quote can certainly relate to my current fitness journey. I’ve got a lot of training to do and a lot of weight to lose to make the journey easier. I’m not worried about racing like the hare, I just want to finish like the tortoise – ideally somewhere in between.
I recently consolidated to free up cash flow and help us avoid adding to our debt. Having extra cash and some savings is giving me piece of mind to be able to focus on my training and not worry about money. It feels good.
Now can someone please light a fire under my behind and help me run 10K tonight??
February 1, 2010 at 8:48 am
Thank you for this message. As a tortoise who only just left the start line (one month in, 35 more to go), I am determined to get to that finish line. I have not enjoyed the feeling of this debt over my head, and I can see the freedom on having it gone.
Just need to remind myself, one step at a time.
February 1, 2010 at 9:07 am
Oh Gail, this is the most timely post for me ever. I have been diligently paying down my debt, and even came up with a beautiful new budget in Jan to have me debt free sooner than I thought. And then I had my final corporation taxes completed…and had to write a BIG cheque Saturday that completely obliterated my savings, all of it, and then some (thanks to my husband for his backup stash that he lent me some to cover the remainder until I can pay back his savings account by April, unfortunately taking away from my own cc debt repayment amount to do so). I spent most of yesterday feeling sorry for myself to be honest, beating myself up for having enjoyed every red penny that came in, without a thought of the consequences. And then I came to the realization that I was debt-free before, and I will be debt-free again, just a slight bump in the road.
Thanks Gail, for everything you do. The disheartened me of yesterday morning wanted to go blow a whack of credit-card “money” and throw my hands up to signify defeat because I was done, pissed off and DONE with the stupid debt and the debt-free dream. But then your voice came in and told me to, in the words of Dory, ‘Just keep swimming, just keep swimming”.
February 1, 2010 at 9:10 am
I have been plodding along like a tortoise for a long time. I’m close to the end and I just wish a fairy god mother would come along and turn me into a hare so that I can get this done and move on to the next phase of life.
regards,
Jason
February 1, 2010 at 9:19 am
Oh heck yeah I used to wish for a magic fairy (sometimes called the lottery fairy) to sweep in and smack me with her wand and my debt would be gone and cash in the bank. (She’d also take off a goodly number of pounds, give me a decent fashion sense and help me………..errrr……….defy gravity in certain ways).
That would have been great. Really great, but it all would have been one blaze of glory, and those burn out so very fast.
I would not have learned the lessons I am learning along the journey: How to effectively budget, what snowflakes can do when you gather them together to pay off debt, the new lease on the present and the future that I have.
The fairy would not have permitted me to have those wonderful moments of accomplishment and goals met, over and over and over. She’s a greedy fairy that way LOL
When it comes right down to it, I’m a greedy person. I want to keep having those feelings over and over again.
February 1, 2010 at 9:50 am
This is a good reminder not to use a setback as an excuse to bail on our plans. I would love to be debt free yesterday, but that is not reality. We have had to reduce our mortgage payments, but we’ll still be debt free in 2 years and 4 months if things stay as they are – sooner if things go better.
I had planned to be debt free in 2010, but perhaps I was just being a hare.
February 1, 2010 at 10:33 am
Ah yes, the tortoise. We’ve been discussing a bit about this in our Gail Club, and have found that while moving like a tortoise works, it’s the desire to become the hare that often gives us the feeling of financial burnout.
I know that I am on the tortoise pace right now to getting myself out of the hole I slowly dug myself into. And while I’m always looking to find ways to move forward faster, I am content with the moving forward part. Now that I have a more viable saying for myself – thanks confucious and Gail – I know I will get to the end of the year meeting my goals and feeling a greater sense of accomplishment about it and myself!
Debt and the Weight battle are things that take time, patience, ,persistence and tenacity. I have set my Debt Free Date, and am practicing patience to let it come on schedule. I’m persistent now that I have an known value from each pay check going toward that debt and while some days I”m tenacious and other days I’m not, I am working on this. Once I get ride of this Elephant on my back called debt, I’ll be able to channel all my energy into obtaining my desired health goals.
Another step forward towards debt free coming two weeks from now!
February 1, 2010 at 10:57 am
My wife and I raced our way to the “Debt Finish Line” at a break neck pace, set lofty goals and made it there in record time. The only problem is we are now debt free and find it very hard to enjoy what this freedom has given us; we live on a strict budget, use Gail’s Jar System and don’t spend what we don’t have. Sometimes though, I more then my wife find that I turn down offers from friends to do things I think are frivolous because I’m so set in my ways. I hope we are not missing out on life because of this.
February 1, 2010 at 11:01 am
I like that you said to keep having faith in yourself it is so true.
There have been a lot of setbacks in my life lately and some days I really do want to throw up my hands but I dont and I keep focused and keep going and getting up everyday and keep on motoring through…my dad always said, “it is what it is” so just deal with it as it comes the best that you can. I love him and miss him for his wisdom.
February 1, 2010 at 11:08 am
To Melaniesd, you can do that 10 k tonight. I am doing a 1/2 marathon in May. I often feel the same way. That being said, I have looked at the training schedule for a full marathon, and thought, holy crap! The 1/2 is enough for me, I just want to finish, that is bragging rights enough for me. Congratulations on the commitment. Just work the plan!
February 1, 2010 at 11:15 am
$12,000 worth of debt 19 months ago – today, 19 months later we are just a few months shy of being debt free. It’s been a slow journey, with a big dip in the path part way through, but we are just about through. Our debt-free date is May 1/2010 – I can’t wait, I feel like I’ve turned into the hare boucing and racing to the finish line – praying we don’t trip on the last few steps. But I must say, it was the slow and steady tortoise pace that got us to this point.
February 1, 2010 at 11:41 am
Patience is something I am still learning about so I tend to be the hare and push myself overboard. I’m writing the quotes in my daytimer to remind myself that not going full out all the time doesn’t mean I’m a loser! Not having to deal with the fallout of exhaustion from over doing it is worth it. It is really easy to get caught up with the “why aren’t you getting it done as fast as you can?” crowd. Thank you for this post.
February 1, 2010 at 12:04 pm
What a wonderful post and so very true. Most days I want to be the hare and finish the “debt” race but I know the tortoise way is the way to go.
February 1, 2010 at 12:28 pm
I love the tortoise and the hare!
I have always been a tortoise and it drives my bunny friends crazy at times. (I have tortoise friends too, but it can be months between phonecalls from them — no urgency to keep in touch, we understand true friendship doesn’t have an expiry date)
Another great thing about being a tortoise is that less predators seem inclined to try to bug you for long (but hares are tasty prey), and hares are prone to bounding off cliffs by accident (zigging and zagging) in reaction to small frights — while the tortoise has ample time to see what’s ahead…
Being steady and well protected is a great plan (just try not to get tipped onto your back)!
February 1, 2010 at 12:28 pm
I so agree with you Goal “0″ debt… This month is my finish line… At last, i’m getting there and still… I can’t brush off a “what now?” feeling. The actual process of going debt free took lots of good will and perseverance. It occupied center stage in my life for a while… My priorities have changed, my sense of value shifted along with the process. I’m at a point where I find little enjoyment earning or spending money anymore… I remember when I used to get a “kick” on payday… now it’s like any other day. I thought being debt free would give me wings when in fact, all I feel is grounded… Through careful planning and dismissing all the non-essentials, i ended up needing very lilttle and do not get excited to the idea of spending foolishly… I stretched myself to the other side of the pendulum it seems…
February 1, 2010 at 12:34 pm
Marc:
I think the “what now?” feeling comes from needing another goal. You got used to looking forward to what you may not have known have peace/being grounded, to a check mark and not other box to check later.
Now you can bump up your EF or RSP. You can also plan for the next big expense. A trip? A donation? Anything?
Just make sure you find a way to enjoy at least one month of newly free money. Then find a goal you will be proud to put on your list.
Congrats! Your world changed and it’s ok.
February 1, 2010 at 12:44 pm
Thanks for the reminder that slow and steady wins the race, Gail. Since being on the jar system for a little over a month now, my husband and I are realizing how little money we need to enjoy life. We were overspending by a lot wasting money on silly little things. We’ve realized how many of the things that bring us joy are for free – ie. taking photos of our daughter and dog playing together in the snow, baking muffins on a quiet weekend morning and enjoying breakfast together as a family etc.
February 1, 2010 at 12:51 pm
One I like, by Ralph Waldo Emerson:
“Once you make a decision, the universe conspires to make it happen”
Decide to be debt free, and wonderful things will start to happen to help make things a little bit easier!
February 1, 2010 at 1:15 pm
Marc, I agree with Marie. My loan will be paid off by the end of November, and I will suddenly have a 40% of my monthly take home pay back! I’ve spent some time thinking about what my new goals are, since I’ll be 25 and with 0 debt, but I do have future plans: get a house, have a wedding (at some point!), go on more trips, hit my actual targets for the TFSA and RRSP (actually USE the allotted amount!), and give more to charities.
My first big thing was determined this weekend with a friend – we’re going to go to Disney World in the week between our birthdays, and I’ll have the money easily at my fingertips. That’s going to be my splurge before I go back to using that 40% for future savings / EF / RRSP, since I’ve worked hard to get debt free and have decided to give myself a reward.
I also don’t need a lot to be happy, I don’t need to be on the hunt for a new and better paying job, since I don’t have a need for more money. So figure out your next goal, and how you can work towards that!
February 1, 2010 at 1:21 pm
I’m not sure if Gail has done a blog entry on needing to select a new goal once you are debt free, but it sounds like it’s a common situation. Getting to debt-free can take months or years, so for a long time there isn’t really a need to worry about what comes after that.
Some people can function quite well with no definite goal in mind, but I find it’s necessary. I’m a list maker, a spreadsheet tracker and definitely need a goal however small to work toward, particularly when the going gets tough due to unexpected set backs, sheer exhaustion with a strict budget, or faced with temptation to splurge on something fabulous but unnecessary. I find setting a goal make me more accountable for making it happen, even if it’s just to myself.
February 1, 2010 at 1:35 pm
To Debt “0″ and Mark, I agree with everyone else who says you need a new goal. You should be so proud of yourselves for sticking to a difficult path and achieving it. Now you should know that you can do anything.
As for what to do now, surely you’ve got a project you’ve always wanted to do: trip to France where you go to all the best restaurants without a care in the world, publish a book, home renovations, etc.
Back when I was working summer jobs to save for university, I would always allow myself to blow the first paycheque on whatever I wanted. ALL of the rest of the money went into savings but I got to play all summer long with the new stuff I’d bought.
February 1, 2010 at 1:43 pm
I’d like to have some extra incentive by finding out how long it took people to get to debt-free (consumer debt that is). I’ve just bumped to 18 months, barring any other big unforeseen expenses, and from the line in the sand today, it looks soooo far away. I know it’ll come quickly, and it’s the first time in a long time that I can say in 1.5 years I’ll be debt free, but the encouragement from others who’ve had greater than 9 months of payments to finally be debt free would sure help (along with the stories of those who are months away from being debt-free and wondering what’s next of course!).
February 1, 2010 at 2:02 pm
We started our journey to zero debt before we discovered Gail and her very sound and practical advice. Our solo attempt was so much more stressful than it ever needed to be and we made a lot of mistakes which we paid for – all over again.
We weren’t tortoises or hares but chickens running around screaming that the sky was falling and tripping over our good intentions. It was a miserable time.
When our particular ca-ca hit the fan it was so shocking and terrifying and such a wake up call that we went into debt paydown panic mode. To make a long story short we started putting EVERYTHING into debt repayment without taking a look at the whole picture and completely ignored our common sense. Nothing new there. We were foolish getting into debt but who knew we could be foolish getting out of debt? Takes talent. We paid down a huge amount of debt (even got to be debt free for a whole hour and a half) before an emergency hit (the van broke down on the way home from the bank after our last debt payment) and we ended up back on the credit card.
When we discovered Gail and started following her budgeting and future planning ideas we finally got to real debt freedom. If you don’t budget realistically and put money aside for emergencies then you tend to end up doing the credit two step. One step forward, one step back, sidestep, two steps, trip and fall behind.
During our solo attempt we did not put anything into emergency savings and we left some big holes in our budget. No money set aside for car maintenance, clothing, medical, entertainment, house maintenance etc. We were counting on our luck to hold. Hahahahahahahaha!
You can pay down your previous debt faster than expected if you put all the money that you should be reserving for day to day needs onto the debt but that is just silly – those day to day needs always catch up to you. I was the victim of a joke by a group of delinquent ravens – they stole all my granny panty underwear and bras off the clothes line and dropped them into the top branches of our neighbourhood trees. Not only embarrassing when the kids thought that parachutists had landed but it messed up the whole month when we had to steal from Peter to buy underwear for Paula.
And I have always found that emergencies hunt in packs. The first one chases you to the edge. The second one cripples you with a classic hamstring attack. The third one goes for the throat. Of course the Banker will always be willing to patch you up but hey – sheep’s clothing!
In the end we increased our budget and decreased our debt repayment. It took longer to be free but it was slow AND steady and most important of all we kept moving forward. We never had to scrounge for quarters down the back of the sofa or use the cards to get us out of a mess again. Well so far anyways.
February 1, 2010 at 2:18 pm
I totally agree with you about the goal. It’s only that as this journey ends, all projects I can think of seem rather vain… or a selfish use of a too dire resource.
Basically, charity seems like the way to go… trying to do good. It just seems unthinkable to go back to my old ways even with money to do so… Especially knowing how little I can actually go by with and be fairly happy.
Is that a side effect of debt fatigue? Even though it took me only a year to go by? Unsure.
February 1, 2010 at 2:28 pm
I am glad you posted this entry when you did. My husband and I picked up your book and are working through it but I need some guidance from you about this very topic.
I will be getting a one time cash bonus from work that could essentially pay off all of our consumer debt. Great right!! Wrong. We have been in this situation more times than I care to write down (don’t want to actually see it in writing). I work for a company that give stock options and stuff like that and we always pay off debt with it and then start right back up again. Here is my question. Should we just put that money into an emergency fund, or high interest TFSA and work at paying off our debt, hopefully the pain and reward of doing it slowly will teach us a final lesson. Or should we pay off everything and continue to work through Debt Free Forever and apply the principles while starting off from Zero Debt?
We are at an impass here and think your opinion would be valuable in pointing us in the right direction. Ultimately it will be our decision in the end but your thoughts would help a lot.
February 1, 2010 at 2:33 pm
Maura,
Why not do a bit of both? Like putting some aside in a TFSA in case of emergency and take a chunk off the debt. Or if, your RSP’s aren’t maxxed out, put some there and use the tax return towards your debt…
Basically, it’s pointless to pay down the consumer debt if you end back using it at the first bump in the road.
That is I believe what a Turtoise would do.
February 1, 2010 at 2:48 pm
Michelle:
I’ve been at it for a few years now. I’m paying down my student loan (which can seem gargantuan when just out of school and starting to live life as an “adult”!), and started that in November of 2007.
At first I was making the minimum payments, and adding as I could, because I needed to re-establish my emergency fund (moving into a new place mid-month, with 1st, last, and next months rent due in two weeks sure does eliminate that fund quickly!). I’ve since re-established my EF, and have it for 10 months of emergency time (assuming I’m not making payments to my student loan – if I am, than it’s more of a 6 month fund). I have paid down my loan from the initial $28,198.00 I received (or so says NSLSC) to being at just over $7500 now.
Could I have paid it down sooner? Sure. I could have it all paid off right now. However, I wouldn’t have my emergency fund in case something happened. Could I have it paid off in fewer months? Sure, but I also need to consider that there is more to life than debt repayment, and I’m making excellent headway on my loan, so why shouldn’t I go for a (cheap) vacation once a year? There’s nothing wrong with having your student loan paid off in 3 years, instead of two. I don’t make a whole lot of money, but it is definitely possible once you put your mind to do something, and persist with the follow through!
Good luck with your debt repayments!
February 1, 2010 at 2:53 pm
Maura:
If you always return to debt, either your budget is flawed or you are not following your budget. Spending time looking at your expenses for the past six months will give you greater insight into the problem. This needs to be done no matter what because you should not count on a regular bonus for budgeting.
Extra $?
1- if possible: 18% of gross into RSPs
2- Calculate: Net – RSP = what’s left
3- Emergency fund if you have less than 3-months
4- Debt repayment
5- BUDGET!
February 1, 2010 at 2:55 pm
Once debt-free a few years ago I kept the budget pretty tight (loosened a few categories) and set new goals. First was to quit a job I wasn’t super happy with and move to a new city to find a job in the field I wanted to work in (spent a year saving up for moving expenses and living expenses while unemployed). Then a wedding, then the house. Now I am searching a bit for my next goal to work towards.
I agree with others, once you are debt-free have a little splurge to reward yourself (with cash of course) but figure out what to do with the extra funds — if you don’t know put it into a savings account. I found if I didn’t set the extra aside it got worked back into the daily spending again and it was harder to tighten my belt when I did figure out my goal and had to start saving again, then to just stay on the tighter budget the whole time. Also, it was nice to have a starting point bigger than zero.
To Maura, it depends on your interest rates on the debt, if they are high it might be good to pay off the debt so you aren’t giving the bank so much money. I personally would put half the bonus on the debt and half into an EF. Then you use it to make some headway on your debt, but you leave some for “learning”, and have an EF for the not so good times.
February 1, 2010 at 3:02 pm
Lisa, thank you for the vote of confidence. I really appreciate it.
Which race are you running? I’m running The Bluenose Marathon in NS.
Maureen, you’re a riot. You always make me smile & I learn from you too!
Maura, I agree with Marc. Consider doing both. Do you have any savings for emergencies yet? I bet you’d feel really good knowing you have some emergency money aside while you pay down your debt, so that when those emergencies happen you’ll have somewhere to draw from.
Marc, a great big WAY TO GO!!!! for paying off your debts!! You must feel great!
I can understand the ‘what now’ feelings. Maybe consider putting the extra money in a savings account monthly for now while you decide what you’d like to do. Or develop a few accounts:
Marc’s fun account.
Marc’s emergency account.
Marc’s retirement.
Marc’s sweet new car! etc.
Good luck!
February 1, 2010 at 3:10 pm
Marc:
It’s is just that it is weird to discover what makes one truly happy and the clash with the previous approach. You have paid off your fun. You went towards ‘total’ discipline to achieve your goal. The black & white approach helps during that time. You do not HAVE to set a category to every penny you earn anymore. You can just put the money aside to have the flexibility to do something or change something else about your life when you are ready. I would say (to borrow from Gail’s previous website quote) that the value of money is that it gives you choices.
Ensure that your financial future is ok (RPS, EF, insurance). Ensure that possible upcoming expenses are affordable (housing, any maintenance …).
Find a hobby that is fulfilling but that does not require too much money. You may want to spend $ on events gave give you an ‘experience’. You may want to take an occasional course at college or university.
If donations feel right to you, as you discover the various organizations, you will also discover more about your true self and your values.
Enjoy the new journey!
February 1, 2010 at 4:28 pm
Here’s the quote that is keeping me on ‘the tortoise track’ lately, when it comes to both money and fitness: “A small daily task, if it be really daily, will beat the labours of a spasmodic Hercules.” –Anthony Trollope.
February 1, 2010 at 5:16 pm
Thanks for the encouragement – I had a setback last week and I beat myself up for a couple of days about it, but I am just refocusing on my goal and I’m not going to let it get me down.
February 1, 2010 at 6:19 pm
To those folks who have finished the race — congratulations! And thanks for posting — it’s a good reminder to those of us who are still on the track that if we keep going we’ll cross that line too.
Marc and Goal “0″ debt, have you thought about working less? It sounds like the “I’ve paid off my debt, now what?” is a new side to the general process of becoming aware that many write about on this site. We go through it when we first get serious about paying off debt, and realise how much more pleasure we get out of things that have no price tag than we ever thought. Then we notice a deeper shift of priorities, usually away from the material preoccupations of mainstream North American culture. But “debt free” can mean many kinds of freedom. I remember someone writing a “Success Story” about having the freedom to leave work to spend several months with a seriously ill family member.
One of the things I loved about the book “Your Money or Your Life” was the concept of living more simply in order to be able to spend more time on the things we love and truly value than on working. Until a few years ago, I loved my job so much I was unable to think of what I’d rather do than teach. Now, if I didn’t have to work for money, I wouldn’t — or I’d sure work a lot less. Our culture is so tied into defining identity, value, adulthood through work. Maybe if the debt is paid off, and we can live on less than we thought, we can do more with our time than sell it for a paycheque. I’m remembering (or half-remembering) a line from “What Colour is Your Parachute” about finding meaningful work “where your deep passion and the world’s deep hunger collide.”
February 1, 2010 at 6:40 pm
To Marc, Marie & Amelia, Thanks for the inspiration. We need another goal to shoot for and make the payday something to look forward too and not just another day like Marc said. I’ll have to get my pendulum back to center so that we can enjoy the benefits of our achievements.
February 1, 2010 at 8:06 pm
Maura: Someone else mentioned interest rates. You can’t overlook this. If you are paying consumer debt interest rates, then throw the entire windfall against your debt. Nothing you can accumulate in a 2% high interest account will give you the returns that paying off 8 – 20% consumer debt rates will.
Then trust yourself to have changed. Just because you’ve always returned to being foolish doesn’t mean you will again. You are essentially still in debt mode until you have the emergency fund, the necessary savings fund, the retirement fund all accounted for. So make sure you are following the budget and you will be fine. But my vote is the entire amount of the debt unless you’ve got some great “pay no interest for a year” deal on your credit cards/loans.
February 1, 2010 at 8:20 pm
Hi!
I’m a huge fan of TDDUP. I’ve been reading Gail’s blog for a little while but more seriously since a week. I just love it! I’m learning so much and the comments of everyone are very usefull! Keep up the good work Gail and people, continue to respond!
February 1, 2010 at 9:01 pm
Maura:
I also recommend reading MickMack’s Story.
Go to the Success Stories, search the Archives for ‘My Best Strategy’ and you will find the story.
February 1, 2010 at 9:43 pm
Inspiring to read the success stories here, and to feel at one with those who have had their ups and downs.
I’ve been looking at being debt free the same as going to Weight Watchers years ago. Having a goal to shoot for and the support of everyone around you is key. The hardest bit though is once you reach your goal you have to do maintenance. So, I’ve decided once I get debt free, my maintenance is transferring the amount I was using to pay off the debt to savings (TFSA’S) and wouldn’t it be wonderful to even think about travel even though that is very difficult for me? And then there is….and on it goes….I think it will be very interesting.
@Maura ~ I agree with everyone else – 1/2 to each.
February 2, 2010 at 12:46 am
Having a finish date for our goal was priceless to us! Our goal was to finish off the mortgage….and we had various spreedsheets with options to pay it off sooner. The last year was very tough, but seeing that goal of December 2008 made it worth it! (We were nuts, and paying 50% of pay towards it! — however, it was a “flexible mortgage”, in that we were doubling up payments every month without penalty.)
I admit we didn’t find Gail’s show until the end for us — we didn’t have savings for RRSPs or an emergency fund — looking back, we feel pretty stupid. However, we are taking all the former mortgage payments straight into RRSPs and TFSAs and, unbelievably enough, investments!
Good luck to those working towards your goal! That finish line feels amazing!
February 2, 2010 at 12:54 am
I agree how timely this post is. With the start of the New Year, we are all feverishly trying to make sound budgets that will get us to our Debt-Free goal sooner. We get a little anxious and want it to happen tomorrow. Sounds a little like how we got ourselves into this mess into the first place, don’t you think?
The progress in our household is slow, but it is steady and I try to remind myself of that. The jars are working and I am proud to pay cash for everything. Still can’t believe what we used to fritter away money on, but just knowing we did is a huge step forward.
I am Trying Hard to focus on the process AND the prize at the end:)
February 2, 2010 at 2:11 am
We are following Gail’s advice and working through 3 years of debt repayment. We are using the jars and the first month ended and there is money left in the jars (some of the jars it’s just change). We have the budgeted money in an ef and savings. 2 years 11 months to go.
I get where Maura is coming from. I first wonder about the budget and whether it is adequate. I would probably put a $1000 in the ef and put the rest on debt repayment.
We are in the same position as far as bonuses —no they will not pay off our debt but could make a dent. We feel though that due to some situations that the money really needs to go elsewhere. My husband makes $250 less a month until the end of August due to taxes so we are short in our budget. We plan to take my bonus and pay my car insurance for the year. I am going on mat.leave so it will be less this year anyways. This will free up $211 a month to mostly cover the shortfall.
All I wanted to do was throw it on debt but then what….fall back into debt like Maura is worried about??
With my husbands bonus -alot more $$– we will put some in rrsp’s before it gets put on his paycheque and then we are using $1200 to put away for a “vacation fund” to make my husband feel that one day we will be able to get away. Then we will pay some debt. But because I will be on mat. leave we really thought about it and feel we should save some and possibly buy gift cards to grocery stores etc… to ensure there is money available for food and diapers if needed.
Gail had a blog in the last few weeks about future goals and she has also talked about having a little fun money while paying off the debt. That is why we are fine with the 3 years—if it gets paid off faster great but I am not eating ramen noodles and kraft dinner for months just to end up back into debt in a few years. This has to be realistic and still enjoyable. I think that is what Gail means.
February 2, 2010 at 3:30 am
I want to thank EACH and EVERY ONE of YOU for contributing to such a lively discussion, especially those who spoke from personal experience. It is these sorts of conversations about real life issues dealing with debt and repayment that keep so many of us motivated to stay on track.
What a timely post this has been, Gail, as I myself feel like my repayment method is going so SLOWLY; but I have to remind myself each and everyday that “a man must learn to crawl before he can walk.” Therefore, we always begin with small steps, and eventually they will turn into large strides, wherein our goals will be met in time, as we keep the ultimate goal of Debt-Free Forever in plain sight.
Keep up the great work everyone!
February 2, 2010 at 10:56 am
Melaniesd : I am running the London Ontario 1/2 Marathon on May 2nd. Good Luck! I am always so inspired by everyone that makes a commitment to run a race. All of the training definitely applies to finances as well. Make a plan and stick to it and you will get to the end!
Goal”O” Debt : Please find a new goal, hobby, find your passion! Volunteer for a cause. You will find a purpose for the money. Find some joy in it!
February 2, 2010 at 12:40 pm
If a process is slow, you must keep track of your progress and use that as a benchmark of success.
This is why SPECIFIC goals are important (see one of Gail’s recent post on this topic). Set a specific (MEASURABLE) target and a date. Did you meet your target? If yes, go YIPEEE! If not, find out why. There might be legitimate reasons for not meeting your goal (UNEXPECTED event, predictable but omitted events like maintenance issues and kids’ activities …) and revisit your plan and budget.
So having a target date that suits your personality is a must. Maybe every 3-4 months, you write down in big letters the amount payed during that time and the amount left owing. A chart will let you see that you did progress (or you can just see how little interest you paid in the last year of repayment when the tax receipts comes in the mail).
February 4, 2010 at 11:28 pm
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February 7, 2010 at 5:46 pm
To tortoise your way to paying down your debt by saving money on gas go to save money on gas.
To tortoise your way to paying down your debt by increasing your earnings click on “Powered by Sitebuilder” at the bottom of the “save money on gas” page.
Sitebuilder uses the tortoise as its motto to encourage people to build websites that make money by “tortoising it”; using tortoise as a verb the same way Gail does.
February 11, 2010 at 8:52 pm
Thank you so much Gail for reminding me that everything can’t always be done immediately!! My boyfriend and I are working diligently on paying off consumer debt; we’re down to a year, and it’d be sooner if we didn’t have a wedding to pay for, but the car will still be paid off before the wedding, and then we’ll be consumer debt free.
People keep telling us one of two things regarding our student loans: either (a) don’t do anything until they’re completely paid off, or (b) eh, who cares? the rates are so low I’d just keep them and let them be paid off in 30 years. People don’t get our (c), that we set aside more than the minimum every month, and every 3 months we send an extra premium payment to the processors. We have to have SOME life, but I’m not paying these silly things when I’m 60. I’m mad that I’ll be paying them in my 40s, but I guess that’s what you get when you have close to a half million in student loan debt alone. I don’t even want to look at what happens when we buy a house, but we’ll plug along with that too.
February 14, 2010 at 4:12 am
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