Paying off debt can seem overwhelming. A way to help you stay motivated and intentional is to calculate a “payoff date”.

When you are getting ready to determine just how long it will take you to pay off all of your debt, you have to write it all out.

This was my Tip #3 from my blog, Getting Started Paying Off Debt.All of your debt can include but is not limited to your car, student loan debt, personal loans, financed furniture, credit cards, etc. The best way to gain momentum in paying off your debt is by making a list of your debt from smallest to largest. As you make minimum payments on all of these debts, start targeting the smallest debt with ANY money you can free up in your budget. As Dave would say, “Go at it with a VENGEANCE!!”. Maybe you worked a side gig this past weekend, throw that money onto that debt. Perhaps you only spent 80% of your grocery budget this month. Throw that extra money onto the debt. Once the first debt in your “debt snowball” is paid off, you will take the money you would have been paying towards the smallest debt and start putting it towards the next debt. This will continue until all your focus is on your last debt and you are debt free! This step can take people several years to complete based on the size of the total debt, their income or “shovel”, and their determination to GET RID of this debt! The more you can dream about the freedom you’ll have and the more you make sacrifices to reach that debt freedom, the quicker you will get there.


I want to break it down for you! 

First, write it all out smallest to largest.

I will include my Baby Step 2 Debt Tracker here for you. I explained this in previous blog, but to sum it up…Math would tell you to pay off your debt by interest rates–paying the highest interest rate debt first. But, getting out of debt is not determined by being better at math…getting out of debt is determined by a behavior change. And a huge motivator in continuing with the process is to WIN! Once you pay off that first debt in FULL, you’ll feel a WIN. And you’ll want more of that feeling.

Second, create a debt freedom chart!

There are some really cute downloadable charts you can get to track your pay off. Some people make a paper chain and hang it in their home…for each $100 or $1000 they pay off, they take a paper chain link off. At our house we had a chart with 10 columns and 8 rows. (I made it when we had 80,000 left in student loan debt.) squared-one-uYtyhKO3ygU-unsplashEach time we paid off $1,000 in debt, we shaded in a box. Around the chart, I have doodled quotes from Dave and even some of our mentors to get us fired up! We leave this chart on our fridge so that we can be reminded of what we have accomplished and how much we have left! As of July 2nd, 2020 we have paid over $50K in debt and we have about $48K to go!

Thrid, once you have your debt laid out and have a motivational debt payoff tracker established, you are now ready to see how much you can put towards debt each month.

This step can get a little complicated. In this step, you will have to create a budget or revisit a budget you already have. I won’t tell you what you should and shouldn’t pay for each month. But, if you are serious about becoming debt free, I recommend making sacrifices in this step. We don’t have internet. We don’t have cable. We don’t eat out often. We don’t have spotify premium…we don’t have premium anything really. We try to keep our dinner cost less than $5 for every “meal for two”. We eat leftovers. We stretch meat and more costly foods with cheaper sides like….beans and rice. You’ll hear Dave Ramsey and his fans say “Beans and rice. Rice and beans.” This means, minimal. Just enough to live. The quickest way to be done with debt is to live a very minimalist lifestyle for a short period of time. You aren’t buying many or any new clothes. You are working as much as you can. You aren’t going on elaborate vacations. This can be a super difficult pill to swallow, especially if you are used to having all of these things and more. Because we were working to pay off $100K+ in student loan debt while Tyler was still in graduate school (meaning he was not working), we decided that we would have to pace ourselves a little. We did pay cash to go on a very frugal (four days for less than $900) and extremely fun vacation to Inlet Beach, FL right before I had to go back to work as a teacher. Just remember, whatever you don’t put towards debt, is just extending the amount of time you are in debt. So if you decide to have a $100 wifi/internet bill each month, then you will be spending$1200 per year on wifi that could have gone to debt. That is something you and your family decide you cannot do without, though.

Photo by Jp Valery on Unsplash

We use the hotspots on our phone. It isn’t always the easiest option, but it frees up $100 per month that we can put towards debt. Your budget can be as simple or as detailed as you want it. We used to be super detailed with our budget…making a line item for everything. But, it got complicated. It required too many envelopes. It was overwhelming. Now, we just keep it simple. We have a grocery/household item budget. If I need to buy shampoo this month, it comes out of the same line item as the ground beef I bought earlier this week. Here are our line items: giving to Church, Rent, Household/Grocery, Gas (for our home), Electricity, Trash, Gas (for our car), Auto Insurance, Renter’s Insurance, Life Insurance, Cell Phone Bill, Restaurants, Addie’s spending money, Tyler’s spending money, and Gift Giving to others. We also currently have three sinking funds: Traveling, Christmas, Flights home. The traveling sinking fund is there temporarily because we have family coming up to Alaska, and we want to be sure that we can go with them to different places in AK as they are up here. That is more important to us than paying our debt off one week early. Sometimes you can do that sorta thing, but if you don’t limit this type of spending, you’ll end up months/years behind your original payoff debt–it adds up! 

Fourth,  let’s calculate your debt payoff date!

After your budget is created and you feel as if you have everything accounted for, subtract the total predicted to spend from one month’s income. If you get paid every two weeks, take your two payments from the month before and use that to fund the next month’s expenses. As a teacher, our paycheck came at the end of most every month and it was the same each month. It didn’t fluctuate. So for example, when we got paid $2400 take home each month, we would spend about $1800 on expenses and put $600 (what we could squeeze out of the budget) towards debt.

Photo by Debby Hudson on Unsplash

Some months we could get more creative and put even more towards debt. In order to calculate how many months it will take you to become debt free, take your total debt and divide it by your monthly debt contributions. Let’s keep it easy. If you have $20,000 in debt and can put $500 a month towards paying it off, you will have it paid off in 40 months or so.. (we can’t forget that interest will be acquired). As your income increases, your expenses decrease, your payoff date can scoot up. 

At this point of your financial journey, you should not be investing into your retirement, you should not be saving for a home, you should not be taking out any more debt. At this point you should have $1K for emergencies, your rent/mortgage, utilities, food, insurance, and that about covers it. There will be line items specific to your needs like clothes for kids, you may even have to cash flow a *new to you* car if yours dies. But, this step is not supposed to last very long no matter what your income to debt ratio is. You should be making sacrifices that make you feel weird, uncomfortable, etc.

This isn’t a very fun and exciting place to be financially. You owe people money. 


That doesn’t have to be your last financial chapter! Let’s move on and write more! I want to cheer you on as you pay off your debt!!