i cant pay 1300 extra toward debt so now what

September 12th, 2008

I Can’t Pay $1300 Extra Toward Debt, So Now What?

If you haven’t been reading this blog from the beginning, when you read my recent Tell All Tuesday posts, you may have some similar feelings to what I have had in the past when I first started reading personal finance blogs.  When I first started working hard to get out of debt, I would read posts from people who paid hundreds or thousands extra on their debt each month, and although I would be happy for them and feel inspired by their progress, at the same time, I would think “Well, I can’t do that, so what’s the point?”

When I started this blog, and a significant commitment to debt reduction, I was barely paying the minimum required to debt each month.  And my goal was to simply pay $100 over the $810.41 required just to meet the minimum payments each month.  This was June 2007, and even with only paying around $100 over that required minimum, over time, I calculated that we should be able to pay off a little over $36,000 in debt in about 3 1/2 years.  By only paying $100 over that initial minimum required payment per month, every month.  I would read about people paying enormous amounts to debt at a time, but I would reassure myself that it can be done with small amounts too, as long as I just kept at it.

The key was consistency.  Even just a small amount extra than what was required, done month to month, eventually added up to a big difference.  What began as $100 extra a month became $300 extra a month once the credit card was paid off, without adding another penny to the amount we were paying.  Of course, other factors changed too, and we now pay a lot more extra to debt each month than I could have initially imagined.   That has been an exercise in patience and perseverance – working hard to find small ways to boost our incomes, and then grabbing onto opportunities we created.  I won’t pretend that it has all been skill, but it hasn’t all been luck, either. The longer we focused on debt reduction and made it a priority, the more we were able to find opportunities to increase the amount we paid to debt.  I started out selling things on Craigslist and taking online surveys, and ended up at this point working two more part time jobs than I was when I started.  Being open to opportunity has helped a lot.

But even if we had never significantly increased our income, and I was still only paying a little over $900 to debt total each month – we still would be able to pay off $36,000 in debt in about 3 1/2 years.  Which really isn’t as long a time as one might think.   Whatever your situation, however much extra you can put towards debt, just keep at it.  Little by little, mountains do move.

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24 Responses to “I Can’t Pay $1300 Extra Toward Debt, So Now What?”

  1. I kind of feel like that sometimes, but I’ve learned that persistence and patience is key. Congrats on your success.

  2. You continue to inspire me! Some months I really don’t have enough to make the monthly payment on the huge education loan I have, but somehow, I find the money and it gets paid.

    Little steps add up to big changes down the line.

  3. that’s awesome! the key is to start somewhere, whatever the amount is. Every month that amount goes just a little bit further…

    good point and good post!

  4. Very true. It can be hard sometimes to see what other people are doing and not feel a little like a failure (at least for me). Of course, I try not to do that too often, but it happens. Like you, I’ve always been comforted by the fact that my plan *is* working and even if it is going more slowly than I like I know I’ll get there.

  5. $100 is my extra amount too, and I so appreciate your inspiration! When reading PF blogs, I’ve asked myself – where do some of these people come up with the money? And knowing there’s other families that are chiseling at their debt at the same pace we are is so helpful/valuable. Seeing progress, even if it’s $100 in principle payments and an avoided $5 in interest is GREAT. Keep at it and keep us posted!

  6. Thank you so much for this article! I am in the same position and it really helps to read these little by little posts at least in some blogs.

  7. Thanks for the uplift! It gets downright depressing sometimes when you look at your account balances and it seems that everything is too out of reach. Posts like this are the reason I read PF blogs.

  8. We struggle with having a consistent strategy, such as which debt to focus on, should we attack more aggressively debt that is at an artificially low intro rate, HELOC vs credit card, etc. Luckily it all SEEMS to be heading down!
    An interesting online calculator which will tell you what a huge difference you can make in your debt with consistent payments (e.g., instead of always the minimum) is at Bankrate:
    http://www.bankrate.com/brm/calc/MinPayment.asp

  9. i’ll chime in with thanks, too! i find myself getting needlessly jealous when some random fellow debt-killer gets a sudden gift of thousands of dollars and can knock out a pile of debt, or bitter when i see that their monthly income is twice mine so “no wonder they’re doing so well!” by the same token, i can also see that someone has a small amount of debt (or smaller than mine) to knock out, and i’m like, “what are they even worried about?” it can be a lot of negativity, but realizing that the numbers are all relative, but the goal and the only way to make progress (keep trying, use all of the resources available, and keep your chin up) are absolutely the same for all of us promptly pushes me over into the smiley optimist category. grey day be damned!

  10. I completely agree. My husband is on unemployment and I am on disability. We can’t make huge payments. But we’re still paying down a decent amount of debt.

    One of our big tricks is to pay every time we get paid. Right now, that means the weekly unemployment checks. Before, it was biweekly, with my husband’s paycheck.

    I find that the longer the money sits in your account, the less will inevitably be there when you go to pay “extra.” It’s too easy to rationalize small purchases because you have money in the account. So we pay down a set amount each week. Then, at the end of the week, if we have extra that we’ve been able to avoid spending, we make another payment.

  11. I agree it is the little bits, but consistant bits, that help get the job done, the mountain eroded – and you have to start somewhere!

    My start to being debt-free was $5 extra/mo on the mortgage… in a really good month it was $10… but it all helped out in the end! 10 yr pay off! You’ve just got to keep at it and keep track of it so you can see how much progress you’ve made. Keep track! Seeing that progress is what makes that mental difference between success and not so successful :) Good luck!

    Your monthly debt payments are larger than my takehome pay – so I just divide in my mind to find a reasonable comparison :)

  12. Just popping in to offer moral support. Every time I hear about how you are all putting so much into your debt repayments, I get excited about what you can do when the compound interest works for you. It’s going to be great.

  13. I couldn’t agree more, small consistent steps get you where you want to be!

  14. @ Marci – our monthly payments are more than my take home pay too lol. Thank goodness for the spouse. heh.

    As a perspective I guess, we are in the 15% tax bracket, and together, take home, is around $40Kish annual. It varies because what I make varies but I think that is close enough to illustrate. Before I started aggressively re-employing myself it was a little under $30K, take home.

  15. Thank you. I needed to read this today.

  16. I have found that paying 120% of the minimum does reduce the payments alot faster. Some institutions like Ford motor company, will apply the extra payment against the next payment, making it lower, which is kind of frustrating, because it gets me back in the mindset of paying the minimum, but fortunately I’m able to break out of that…

  17. Well done. “DOLP” works.

  18. I like that you really make the little amounts matter. I’m also saving for my down payment little by little. I currently have a little over $4k in that account…and I just think, WOW! When I started my blog, I never thought I would be able to save that much so quickly. Now that I’m back in school, it’s stalled, but I’m going to keep working toward the goal.

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