Why We’re Pausing our Debt-Free Journey

We are officially pausing our debt-free journey. If you are new here, my husband and I were always inspired by both the Financially Independent Retire Early (FIRE) movement and Dave Ramsey to knock out our student debt and start building wealth as fast as possible. As we were preparing to get married, this became our first joint goal. We started our debt-free journey in August of 2018, which was exactly two years ago! Based on our plan at that point, we would have been completely out of consumer debt, with just the mortgage remaining by now with a target end-date of June 2020. We had those rose-colored glasses on.

How it Started

We started in earnest, paying off almost $15,000 in credit card debt, adding an extra $100 to our principal payment on our mortgage and starting to chip away at our student loans. What people don’t really talk about when they discuss paying off debt with “gazelle intensity”, is that your life basically needs to be put on hold for the years that it takes to get to that point. This is easier depending on what stage of life you’re in. If your job is steady and predictable, if you’re done having kids and your expenses are not projected to change, this is very doable. But for us, life was in a state of major flux. It was the frugal living that got us through some of these changes, but the debt payoff plan needed to be completely stopped for us to survive.

When Life Gets in the Way

There were some major expenses that we needed to take care of. However, we did not want to compound our debt problem by taking out unnecessary additional loans. We paid our share of the wedding expenses, my exam fees, most of Mark’s master’s degree program and two vehicles with cash, although we were still taking out loans in my name for medical school. The first car was the Prius we discussed in the previous post, but since I had also started hospital rotations, it was necessary for me to also purchase a vehicle to commute to all of my hospital sites for medical school.

Between June 2019 and June 2020, we had managed to save $10,000 for emergencies. However, our housing payment went up by almost $1000 per month due to property taxes, our income fell as Mark was between jobs, I became pregnant, and the final blow to everything was the Coronavirus Pandemic. So yeah, life got in the way. The one thing that has been saving us this whole time is being frugal. We have been limiting our expenses and we have an emergency savings stockpile that we haven’t had to touch yet. That has given us so much peace of mind. I am really not sure what we would have done if we had no savings.

Why We Paused our Debt Payments

We are pausing our debt-free journey because our priorities have quickly changed, and we needed our finances to be more flexible. Since we don’t have an income anymore, we need the money we have to pay for our basic expenses. We have stopped making extra payments on the mortgage, and our student loan payments are put on hold. Thank goodness we don’t also have car payments to make. We are making frugal plans for the rest of 2020, as this will be an extremely lean year for us. The job market is not great right now and Mark is still applying for jobs.

Once Mark is employed again, we are going to get ourselves steadied on our feet. At that point, we will consider resuming our debt-free journey in 2021. In the meantime, I am starting my own from-home business. I hope it will become profitable within the next couple of months and give us some extra income. We are selling things around the house that we don’t use or need for some extra cash. We will also consider moving to reduce our housing expenses.

Looking Forward

This is an ultra lean season that we’re in, and a challenging one at that. To “celebrate”, I will be creating some fabulous frugal content. I know many of you are also in a similar situation, trying to keep afloat until the tides change. 

Here is some of what we have lined up for the rest of 2020:

Save in September challenge

No new clothes challenge

Tips on what to buy at the dollar store

How we save money on baby gear and clothing

Low cost Fall activities

Frugal food tips and meal planning

Frugal holiday gifting 

Thanks so much for following along with us. Real life is hard, and even the most prepared of us can find ourselves in a bind. I did not want to share a perfect debt-free journey that seemed out of reach for most. Instead, this is a realistic struggle with priorities and choices, a struggle that is made harder by an unpredictable virus and an unpredictable economy. If you’re on your own debt-free journey, stick with it. Even if it takes longer than you originally hoped, it’s still worth it to become financially independent.