A long-term look at debt payments and savings

January 30, 2009 at 10:00 am (Saving Money)

I started having those thoughts every person in debt eventually starts having  “What could I be doing with my debt payments if I didn’t have debt?” I realized that if I stick sorta close to my budget, even not paying for debt, and instead save that money, I could conceivably have a downpayment for a house in 2-3 years (you know, the 20% down that is generally recommended)!!!!!

I’m just starting to realize how depressing it is that I’ll have to wait 5+ more years before I get to the point that saving or spending is actually an option. Well, it’s depressing for a few moments. I don’t really let it get to me. It’s all academic at this point, a theory that I can mull over in my head, that I can actually accrue savings and build up money for a really large purchase.

I have never saved money in my entire life, and I’m 37 years old! I contribute to 401K in my current job, but only at the minimum to get a match from my employer, which is 3%. Any higher and it would affect my debt payments. In my previous 5 year stint at corporte america before I returned to school for an art degree (that most useful of degrees), I had an amazing job where they matched up to 7% at 100% (they were rolling in money, a new company, and with a very fresh, very HR-positive atmosphere). I built up quite a bit at the time.

But back to savings. I’ve never had any before now. I currently have $625 for my emergency fund – not a lot, but it’s still in its infancy, and I hope to have $1000-1500 this year JUST for savings (not an amount I’ll touch for the expected large yearly expenses – I’m saving separately for that). 

It’s still interesting to me how I’m able to pay so much in debt payments while I never seemed to be able to do so before, and I feel like I’m living pretty close to the same level I used to. Where did all that extra money come from (post-budget)?!?!

Just some rambling thoughts that have been in my head this past week.

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4 Comments

  1. rtc said,

    I just found your blog at pfblogs. Good luck on your debt-free journey. You are better off now than when you first started. That’s what I keep telling myself!
    Enjoy the weekend.

  2. brainy said,

    I went through the exact same process, wondering how I was going to pay down the debt I had, followed by wondering what it’d be like to have all of that “extra” money each month once I was out of debt.

    When I got there… well, it was as though nothing really changed. I don’t have debt payments anywhere near approaching what I had, but I certainly don’t feel rich either. I’m living at pretty close to the same level.

    Weird how that works…

  3. debtmaven said,

    Thanks rtc! I’m in it for the long haul, and I know it’s l-o-n-g overdue and necessary. I’ve already paid a bunch and I’m on my way. Thanks for the encouragement, we all need it.

  4. debtmaven said,

    Yeah, by the time I actually Get There, I think it will be a seriously ingrained process. Luckily my income has been increasing in small amounts since last summer, so it all helps. I am trying to keep my spending habits at the same standard no matter what income I have. The thing I have going for me (and for yourself I’m sure) is that I’m not an extravagant person, so I don’t feel like I’m sacrificing quite so much. Just got to watch those little splurges (which add up!).

    Congrats on making it!

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