Big Audacious Debt Payoff Plan Part 3


Last November, I shared my plan in a post, Big Audacious Debt Payoff Plan Part 1, to pay off $24,000 in debt in under 13 months. We began by paying off our credit cards. We never paid any fees, but our balances started increasing. To avoid this, we took money out of our emergency savings and paid all the credit cards except one to $0. Then we paid the total balances off each week.

We were paying $300 per month on our last 0% credit card which we finally paid this off last March. At that time, I created an updated post, Big Audacious Debt Payoff Plan Part 2. In this post, I provided additional details on how we ended up with the initial $24,000 debt. I also updated our plan to pay our Home Equity Line of Credit (HELOC) loan not by December 2019, but by the end of June 2019.

Focus and Determination

We religiously paid our $2,000 per month plus interest through April 2019. I ran some calculations and figured out that we would be able to pay off the loan a month and a half earlier. We stayed focused and determined to pay off this loan. On May 1st, we had $14,000 remaining on the loan. We decided we would be better off draining our savings and paying off the loan than continuing to pay the daily compounded interest at an annual rate of 6.5%.


We paid off the last of the loan yesterday on May 11, 2019. This saves over $300 in interest from our original plan of paying $2,000 each of the following 7 months. The only issue is that we have very little money left over. Our total cash balance is about $700. This is a far cry from having over $10,000 in emergency savings.

The risk is that something happens and we do not have the cash to cover the emergency. In the few years that we maintained an emergency savings of $4,500, we only had to dip into it a couple times. This leads me to believe that we should be fine until the end of the month. Having our credit cards are paid off decreases our risk. This means that all our pay for the rest of the month can go to pay the minimal bills we have left for the month and then begin filling our savings again.

Financial Goals

Earlier this year I set several financial goals for 2019. The main goal was to pay off the $24,000 HELOC. I can mark this one off. My second goal was to save up $10,000 in our emergency fund. With the HELOC paid, we can pay $2,000 to ourselves each month. Add to that the $1,000 we already save each month in our emergency fund. With over 6 months left in the year we could easily save $15,000 to $20,000 by the end of the year.

Not drinking and spending less each month on our groceries is now part of our lives enabling us to save even more each month. Minimizing our debts and spending less really increases the amount of money we can save.

I had another goal to read at least six financial books this year. I already read five and I am working on my sixth. Here are the books I read so far this year.

I have plans to finish several more since my original list has two that I have yet to finish. I will finish the first of the following books this week. The second book will take a few months. I should finish the third book this month. The last book will take longer, but I still plan to finish reading it by the end of 2019.

Do you have any book recommendations? Let me know. I am always looking for more great books.

Future Debt Payoff Plans

With the HELOC paid, we finally not only have less than $400,000 in debt, but are also now below $392,000. The only debts that remain are my 0% car loan, Dr. SoS’s student loan, and our mortgage. I plan to keep up this series as we begin to pay off these debts.

We currently pay $220 on the principal of Dr. SoS’s student loan on a graduated repayment plan. Even though we plan to bulk up our emergency fund, I plan to add another $300 per month to this payment so that we can begin paying $500 per month on this loan. This brings us up to the standard repayment plan. Our plan is to increase this payment by an additional $500 each January further increasing the payment to principal.

I ran some calculations and by following this plan, rather than paying off Dr. SoS’s student loan by the current due date of 2043, we should have the loan paid off by August 2026. Even better is that once we pay off her loan, if we snowball that payment into our mortgage, we will end up paying our house off 18 months early and will become completely debt free by April 2027.


Mr. SoS


  1. Freddy:

    It is pretty amazing how much we were spending on alcohol. I never tracked it specifically, but depending on the month between $50 and $300 per month. That pays off a ton of debt.

    I looked at our HELOC today and we paid $1,782.58 in interest in 2018 and $464.74 in 2019. You can purchase some good wine for $2,247.32 or quite possibly take a vacation to an all inclusive resort for two for about that amount. Good news is that we will no longer have to pay this money to the bank, but can pay ourselves instead.

    Mr. SoS

  2. Six years ago we were in a similar situation – drowning in debt and robbing Peter to pay Paul. We made a commitment to cut our lifestyle down to zero and get out of debt based on my book recommendation: Total Money Makeover by Dave Ramsey.

    Followed the Ramsey “baby steps” and as of Oct ’18 we are 100% debt free. No car / motorcycle payments, no credit cards*, no student loans (we even cash flowed college for both boys), and most importantly, no mortgage or HELOC. The steps work. It takes sacrifice and you’ll have some contentious budget meetings, but it WORKS. By focusing on a debt snowball we were able to get rid of everything but the house in a little over 2 years. Based on your situation it might take a few more years to get the student loans knocked out, but if you can focus $50k/yr on them at the end of the snowball they’re gone in four.

    Six years ago we were 20-25 years away from being financially able to retire. Now we’re five which gives us an extra decade to enjoy the fruits of our labor. We also get to not worry so much about the economy, job changes, etc. We own it all & have a cash position that would allow us to ride out at least a year with zero income (highly unlikely.)

    There’s plenty of Financial Peace University classes based on the book’s teaching starting in Aug / Sept in the area. Check it out & good luck!

    *You can live without credit cards – we haven’t had one in six years. Debit cards work just fine & offer the same protections. Enterprise & Dollar will take a debit on a car rental and most hotels have no issues with it either, you just need a couple hundred extra bucks in the account for the hold.

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