When it comes to maintaining balance in life while paying off debt, there are many schools of thought. Some recommend eliminating or minimizing expenses so you can put every possible penny toward your savings and debt.

Those who choose this path make extreme sacrifices to reduce their expenses so they can save and pay down their debt as quickly as possible. 

On the other hand, some recommend you pay off the minimum payments on your debts while saving 2-5% of your income, and thus continue to take out more loans along the way for big purchases.

While you’re most likely somewhere in the middle, you have probably found yourself struggling with the best way to tackle your debt and achieve your goals.

Whether your debt is from student debt alone or you have a mortgage, a car payment, and a personal loan for that kitchen remodel, it’s essential to maintain balance in life when paying off debt.

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Make It Sustainable

It’s helpful to think of balance in life when paying off debt like dieting. Doctors and nutrition experts can debate the best diet for optimum health. Still, the reality is that the best diet for each individual is the one that they can adhere to over an extended period.

If you can only stick to a particular diet for a week or two before you revert to your prior habits, then you’re not likely to reap any benefit from it.

I think that holds for saving and debt repayment as well. I could write an article using the finance theories I learned in business school, but ultimately, the most critical factor is finding a method that will be sustainable for you.

That lesson was learned early on in my career. During my summer breaks in college, I worked as an investment banking intern in New York City, pulling 100-hour workweeks. Even though I was working like a dog, I knew that after those three months, I would return to school. You can do anything for ten weeks.

Fast forward to my college graduation, where I signed a contract to return to the investment bank as a full-time analyst. After a few months of working full time, I started to feel burned out. There was no break on the horizon, and I realized that working 100 hours per week was simply not sustainable long term.

This also applies to your budget

If you’re too aggressive, you may not have much difficulty early on, but after a few months, you’ll get sick of it, and it could have the opposite effect of what you had intended. Instead of saving every last penny, you may go on a spending spree, or worse, it could impact your emotional or physical health.

Have you ever tried changing your eating habits to gain all the weight back? The same thing can happen to your bank account (except typically the dollars will get smaller instead of growing).

Saving and budgeting don’t mean you have to suffer. My wife and I set aside a small amount of money every month for each of us to use as we wish. We have used it to buy a new pair of shoes, to grab a coffee on our way to work, or to enjoy a happy hour with a friend.

Read: How to Pay Off Debt as a Couple

There are only two rules for what we refer to as our “Free Spending” line in our budget:

  1. You cannot spend it on something you absolutely need (you should budget for those things separately) and
  2. You can get whatever the heck you want, no questions asked and guilt-free.

We may not be able to buy everything we want, but by having money set aside to buy SOME of the things we want, we don’t feel like we are stretched too thin. If there’s something you’ve been eyeing up for a long time and your allocated spending money can’t cover it, you can also ask loved ones if they’d like to contribute towards that for holidays/birthdays.

In my experience, most people struggle with buying holiday/birthday gifts for others and are always more than happy to contribute toward something you truly want!

Don’t lose sight of what’s important

If you’re too extreme with saving, you may lose sight of what’s most important in life. The harsh reality is that you’ll not live forever. Neither will your loved ones.

If you’re so extreme with your savings and debt repayment that you’re always saying no to things you know you’d enjoy doing, you’ll miss out in multiple ways.

By passing up opportunities to enrich relationships, not only will you miss out on the actual time together, but you’ll also miss out on the lasting memories that you’ll carry with you for the rest of your life. 

Related: Do More Not Less With a Budget

Another lesson I learned at a young age is that nothing in life is guaranteed. My father passed away when I was seven from a brain tumor. This taught me to value the time I spend with my loved ones. 

Memorable experience don’t have to cost a fortune

The good news is that the most memorable experiences don’t have to cost a fortune. It’s possible to create amazing and lasting memories while still saving money and repaying your debt. Consider taking a road trip, which tends to be more affordable than cross-country or international trips that involve taking expensive flights.

Why you should have balance in life when paying off debt | Qube Money Blog
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One of my all-time favorite memories is from a road trip I took a year after my dad passed away. My mom packed up the family (my two brothers and myself), and we drove from Florida to New York City. Along the way, we stayed with family and friends, which helped us both save money and create lasting memories with them. 

Regardless of where you live, you’re likely within an 8-hour drive of an incredible National Park, a beautiful beach, or a perfect campsite. Sit down with your loved ones and plan out your next getaway. By planning with plenty of lead time, you’ll be able to secure better prices for all of your hotels, Airbnb, rental car, etc. Don’t forget to scope out all of the grocery stores along your route.

Having a picnic and enjoying time with your friends or family will beat spending tons of money at a restaurant where the music will be too loud (been there and done that).

We budget money each month towards trips/experiences. By doing this, you’ll be able to have experiences that will create lifelong memories and will not derail your finances. 

Your family’s safety is number one

Saving money and repaying your debt is essential, but it’s also important to set aside funds that will ensure your family’s well-being. This may be in the form of life, disability, and health insurance. The whole point of insurance is to protect yourself from an unexpected event. While car insurance is required by law where I live, other types of coverage aren’t.

Some people argue that it’s not worth spending money on insurance because if you don’t use it, you’ll have lost all of the money you paid into it.

In my point of view, that’s the absolute best-case scenario. Insurance should be purchased with the hopes of never needing to use it. It’s there to protect against catastrophic, worst-case scenario type of events.

Life insurance and disability insurance help me sleep better at night because I know that if anything unexpected happens to me, my family will not suffer financially.

A friend once told me that they chose not to have health insurance because they were young, healthy, and never go to the doctor. While that may seem logical, the most costly medical expenses are the unexpected ones.

You never know what could happen

Young people are the most likely to be involved in accidents. A broken bone (even a tiny bone in your wrist or hand) can end up costing thousands out of pocket when you factor in all of the exams, tests, and procedures. My twin brother is a resident radiologist, so he knows this all too well.

Ask anyone in your life who was recently diagnosed with a serious medical condition. I can almost guarantee that none of them were expecting it. We live in a country where medical debt is the number one reason that individuals file for bankruptcy.

While paying hundreds of dollars a month may slow down your savings and debt repayment, that’s nothing in comparison to the financial mountain that a $40,000+ medical bill will impose on your finances. 

Speaking of accidents and medical expenses, don’t sacrifice purchasing things that will help keep you and your family safe. Having the brakes and rotors changed on your car and getting a new set of tires can set you back hundreds of dollars, but driving around with dangerously low tread and brake pads can lead to catastrophic results for you and others on the road.

Making risky decisions can be a side-effect of being too extreme with your budgeting.

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Don’t miss out on once-in-a-lifetime opportunities: invest in yourself

“The opportunity of a lifetime must be seized in the lifetime of the opportunity”

– Leonard Ravenhill

We have all heard of stories of people delaying things until they have more time, money, or more of something else. The reality is that life is always busy, and there are always more expenses, so you never truly feel like you have enough.

If you’re lucky enough to eventually find yourself with all the time and money you need, the friends and family members you want to share it with may not be around. 

On the other hand, you could also miss out on financial opportunities. Say you’re aggressively saving for a down payment for a house. You may be a year out from reaching your goal for the down payment when the perfect home appears on the market. Suddenly, you find yourself at a crossroads. Do you stick to your strict plan and pass it up, or do you shift your finances around to make it work ahead of schedule? 

There’s no perfect answer, but you should understand that:

If that dream house has a motivated seller, you may be able to get a great deal. A year or two later, market conditions may have changed, and buying a similar home may cost $50,000+ more. Saving that extra $10,000 to end up paying $50,000 more ended up costing you $40,000 more (in addition to the lost equity). 

Maintain balance in life

This example demonstrates how flexibility is a crucial component of having balance in life when paying off debt. Flexibility will allow you to deal with the unexpected curve balls and opportunities that come your way. 

You can also prepare for unexpected events by budgeting ahead of time when possible. If you have friends or family that live far away (like a long plane ride away), try to plan your next visit based on the airfare instead of based on a particular set of dates. Keep your eyes open for sales, and you could end up saving hundreds of dollars!

Investing in yourself is tough. You may not see the payoff of your investment right away, but remember that growth takes time. Attending a conference may set you back financially initially, but it might create a key connection or teach you a skill necessary to advance your career. 

By avoiding the extremes and finding balance in life when paying off debt, you’ll give yourself the sustainability and flexibility to accomplish your financial goals while keeping sights on what is important in life and prioritizing your overall well being.

Don’t let an limiting and rigid budget keep you from accomplishing what you set out to do: save money and pay off your debts. Finding a balance in life that’s right for you’ll provide you with better financial stability and make you happier.