How to tackle wanting to live your life and pay off debt simultaneously.
HOW DO I TACKLE WANTING TO LIVE MY LIFE AND PAYING OFF DEBT SIMULTANEOUSLY?
I get this question a lot, and it makes sense. All these money gurus tell you to sacrifice EVERYTHING for a little bit and then you can live your best life. But, then, once you have paid off your debt you are supposed to save, pay off your house and save some more. If you follow these strategies that’s okay, but you also will not really start living your best life until you are in your 50’s or 60’s.
But, I am getting ahead of myself. I think first you need to define what “living your life” means to you. Some people have hobbies, other people experience wanderlust and want to travel as much as possible. Then you have people who seek a simpler lifestyle who just want to have a home, or those who want to have experiences with their friends and family now. Once you figure out how you want to live your life you can look at the bigger picture of how that plays into paying debt.
For me, “living my best life” is traveling.
After you decide what kind of lifestyle you want to have, next you need to look at your debt and your payoff goals. There are questions you can ask to ascertain whether your goals are realistic and how they play into your overall life goal.
These include:
How much debt do you have?
If you pay your minimums how much money is left over each month?
If you pay off all your debts, how much money does that free up in your budget?
If you put everything extra you can towards debt, when would it be paid off?
Is it within your means to put extra to debt and still have money to spend on lifestyle goals?
Everyone’s money situation is different as are their goals. To some degree there will be some give and take. However, if you are not interested in waiting 5-10 years to “live your life” then look at your budget.
If you pay your minimums and there is no money left over then you need to make some changes, which include trying to bring in more income. If there is money leftover, then you can decide how to divvy up those funds.
Maybe you can split them, for instance send ½ of the money to your debt and put ½ towards whatever activities you are saving for. It may take you longer to pay off the debt or save for “the thing” (whatever it may be) but you’ll pay the debt faster than if you put all the money towards “the thing” and you will get the “the thing” faster than if you put all the money to debt.
All of this to say, you need to look at your situation, finances, goals, and dreams, and see what is realistic within your means. If you are not satisfied with what you see then go back to the drawing board and see what needs to done to get you to where you want to be.