Could You Be Better Off Paying Down Your Debt Slowly?

by Miranda Marquit · 5 comments

in debtWhen you look at your debt, it’s tempting to try to pay it off as quickly as possible. This impulse is often encouraged by stories of consumers who made heroic efforts to pay down debt in a short amount of time.

It’s true that you can make big sacrifices, look for extra income, and pay off your debt in record time. But is it always the best route? And what happens when you are done paying off the debt. Will you stay debt free?

While you can definitely be successful taking an aggressive approach to debt reduction, it’s also important to consider whether or not that is the best approach for your situation. Is it possible that you might be better off overall by taking it a little slower?

Paying Down Debt and Extreme Dieting

My weight used to yo-yo (but continue to move ever-higher) because I’d tackle those 10 or 15 pounds aggressively to reach a desired target. I’d spend six to eight weeks depriving myself and exercising more than usual. Once I hit that target, I’d slowly return to old habits. That’s because the dramatic changes in my eating and exercise habits were unsustainable.

The same might be true of your finances. You can deprive yourself of everything you like to spend money on for a short period of time, but are you really tackling the root of the problem? My cyclical weight gain wasn’t my problem — it was a symptom of my lack of good habits. You might fall into the same trap when you pay down debt very quickly.

Are you really changing your habits, or going through temporary pain to hit a goal? The Bankruptcy Data Project at Harvard found that about one-third of those who file for bankruptcy wind up in the same place later. This can also happen when you pay off debt very quickly without truly changing your approach.

Smaller Changes Can Mean More Sustainable Results

Once I stopped crash dieting, I started making smaller, more sustainable changes. It took longer to reach my goal weight, but it was easier to maintain that weight once I reached it. Incremental changes to my nutrition and exercise habits stuck. The same approach can work when it comes to debt. Focus on changing your money habits in ways that you can maintain for the long haul. Then tackle your debt.

Another consideration is the need to be ready for the unexpected. When my then-husband and I were first married, we tried demolishing our debt in one big payment, draining our savings. Unfortunately, almost immediately after making that payment, a rash of unexpected repairs and similar expenses cropped up. Since we didn’t have any savings because we’d paid off our debt, we had to turn to credit cards. In no time, we were right back where we started.

Don’t forget to shore up your finances even as you pay down debt. You might pay more interest right now, but you could save in the long run if you can manage matters so that you don’t wind up back in debt.

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  • Mike Monfredi says:


    Thanks for the post and for your insight. Shedding light on these topics is huuuge and great for all parties.

    I would comment that success in weight loss or in eliminating debt is determined at the onset. If you are able to determine that this is a choice you ARE making and that you will succeed at any cost, the how becomes ancillary.

    I believe that everyone’s most effective plan is unique to the individual and the circumstances. Extreme, slow, or moderate – whatever gets the job done for you.


  • Lloyd says:

    Tackle the root cause, not the effect/symptom, in the this case, cause being money habits (overspending, impulse buying etc) and not how fast you pay off debt. Great article filled with tons of lessons.

  • Aaron says:

    Huh – this is an interesting topic. I did the same thing – paid off my debt pretty slowly (over the course of 5 years). And, it worked for me as I personally haven’t taken on any more debt that I had previously (save for a home). There is something about having to make sacrificial decisions and “feeling the pain” of debt and poor decisions that sticks with a person.

    • David Ning says:

      Congratulations on being debt free! Now that the weight is off your shoulders, you can concentrate your efforts on building wealth!

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