Pay off debt or save for retirement is like picking between Team Britney or Team Christina. (Young GMD was Team Britney but Current GMD is Team Christina in case anyone was curious!)
Luckily, when it comes to this common personal finance dilemma you don’t have to choose one or the other because GMD says you can pay off debt and save for retirement all at the same time! Win-win!
Longtime readers will know that since I started this debt repayment journey back in December 2012, I have been putting ALL my extra money (after bills have been paid and minimal money set aside “to live”) towards debt repayment. I don’t have a high income but because I’m so aggressive with my debt repayment I was able to reduce my original $58,000 debt by $18,000! Side rant: I’ve had
nosy extra curious readers accused me of not being truthful about my debt repayment because they think that my fiancé J has been helping me with my payments so technically I didn’t pay $18k. I will clear this up now once and for all. J and I do not have combined finances of any sort. That $18,000 was all me! This blog isn’t Girl and Fiancé Meets Debt. It’s Girl Meets Debt. Thank you. End rant.
$18k towards debt in one year meant I had no savings sitting in an Emergency Fund but any “spare change” I had kicking around did go into a retirement savings account.
I remember the day I opened that retirement savings account back in January 2013 – it was the second best financial decision I have ever made for myself. The first of course was realizing I was a financial idiot and had to stop avoiding my debt like a bad ex boyfriend.
Since I’ve opened that retirement savings account, I haven’t really talked or thought much about it because honestly it was like watching paint dry - that’s how slowly the balance was building up.
This morning I checked my online bank account to make an extra payment (booyah!) towards my debt and saw that my retirement savings had finally reached a 4 digit number!
I can’t tell you how AWESOME this feels. This just goes to show that every little penny does count. Compound interest is a beautiful thing.
Within the next few months, I’m going to do crazy things like investing that retirement savings and I can’t wait to blog about it! Right now I’m just doing some research, educating myself to see what investments I feel comfortable with.
How do you feel about the great pay off debt or save for retirement debate? And more importantly, are you Team Brit-Brit or Team Xtina?