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When I was in debt, I prioritized maxing out my 401k and HSA before tackling my debt. I made sure to allocate all available resources towards paying off my debts. Additionally, whenever I received bonuses, I used some of the money to go on vacations to maintain balance. While some advocate for focusing solely on debt repayment, I've seen friends who followed that path end up back in debt. By pacing ourselves and balancing debt repayment with saving for the future, my husband and I managed to pay off over $150K in debt and save $100K for a home purchase within three years. Pace yourself – it's key to sustaining momentum and achieving financial stability.
Fortunately, my only debt is my mortgage. I don’t believe in accumulating unnecessary debt. I learned some harsh lessons many years ago with CC debt when I was in college.
The way to staying out of debt is having a hard and fast rule around needs and wants. It guides how you spend and save your money
I only have a mortgage now. I had minimal student loans and a car loan before. I pay my credit card bill on time and pay it off (!), don’t let the interest accrue. For car payments and student loan payments I’d pay more than the minimum balance and especially large chunks when I received bonuses. For my mortgage, I actually pay half every two weeks as opposed to once a month - it cuts down on the interest payments - and I made random on off principal only payments.