How my mindset has changed two years into the debt-free journey

My mindset when I started the debt-free journey was simple: I wanted to pay off all debt as fast as I could.

And for the first couple years, that’s exactly what I did.

I have never been gazelle intense. I don’t have a side hustle or do anything else to make money outside my full-time job.

Instead, I focused on following a budget that includes a lot of money dedicated to paying back debt.

We’re still working with that budget today. But it’s fair to say my mindset has changed and shifted on the debt-free journey.

Here’s how — and why — that shift happened.

How my mindset has changed two years into the debt-free journey

Over the first two years of our debt-free journey, we paid back about $35K.

This included credit cards, our car loan and an educational line of credit. We did it using the snowball method — every time we paid off a debt, we rolled the minimum payment to the next debt in the line. Within a year, the only debt we had left is the one we’re paying off today: the student loan.

By the time we close our 2019, we are projected to be sub-$30K on the loan. That will mean we have paid back more than $17.5K in twelve months.

That’s a lot of progress. I’m really proud of those numbers.

And while I’m sure we could continue making this sort of progress in the year to come, I’ll be honest: my mindset has changed on the debt-free journey.

Why I’m OK with taking longer to pay back the student loan

My initial goal for paying back the student loan, which I wrote about in this post, was to pay off the loan in less than three years.

At the time, I called it am ambitious but doable goal. Fast-forward a year later and I still believe it is both those things.

I’ve also reached a point where I’m OK with the idea of maybe taking a little longer than that.

What’s interesting to me is that none of the items I listed in that post as being things that could work against us influenced this mindset shift.

We’re both still employed and, for the most part, we have been fairly lucky when it comes to avoiding financial disasters (knock on so much wood), and I don’t feel burnt out or like I am somehow missing out on anything because we’re paying back debt.

So what’s changed? I’m not sure if there’s one specific thing to create for this shift. It’s more been the result of simply feeling more secure about our financial future — including the idea that we might have goals beyond just paying back debt.

This isn’t the first time our mindset has changed on the debt-free journey.

In the spring, we adjusted our budget to allow for more spending money for each of us (I wrote about that here). While there are some elements of our budget that are static, like our bills, our approach to money has almost always included a degree of flexibility.

It’s worked well for us before. And, if we do move ahead with changes to our snowball, I anticipate it will serve us well again.

The new path forward

How does this look, then? Nothing has been finalized yet but, now that student loan interest rates have officially dropped, we may consider dialling back our extra payments in 2020.

I’m talking about a small reduction — a few hundred dollars a month, at most. This will enable us to continue to make great progress with the loan while also making it possible to start saving for other goals we might have.

As far as I see it, if we can pay at least an extra $10,000 on the student loan in 2020, we’ll be in good shape. Even if we reduce our payments a little, we should still be able to realistically hit — and, likely, exceed — that target.

What will the rest of that money go toward? There are a few options, but ones that spring to mind would be emergency savings and — maybe — the beginnings of a house deposit.

Maybe. Like I said, nothing has been finalized yet. But these are definitely things we’re thinking about coming into the end of a very successful 2019.

Final Thoughts

The last two years have been great as far as debt repayment goes. We made a ton of progress and I’m sure that will continue, even if it’s (intentionally) slower in 2020.

If you’re on the debt-free journey and you’re finding your mindset has changed — that’s OK! In my books, so long as you’re moving forward, you’re doing alright.

Keep going. We’ll all get there in the end.

Did you pay off debt in 2019? Or are you planning to pay back debt in 2020?