Category: Debt Free Stories

If you’re at that point where you want to do anything to get out of debt, you might consider selling your investments. More specifically, using your retirement to pay down debt. We made the decision to use a $25,000 IRA withdrawal to pay off the mortgage. Do you think we’re crazy?

(Josh is a freelance writer during the day, and chases his two small children in his free time. He’s here to tell his debt free story — including why he used an IRA withdrawal to pay off his mortgage.)

There are many different mortgage payoff strategies you can use that eliminate your monthly payment without tapping into your IRA or 401k. However, there are several reasons why you might decide to follow a similar path to ours.
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There was just one little snag when Kaysha and her boyfriend started talking about getting married two years ago: she was $43,000 in debt.

While her boyfriend didn’t mind, she felt badly about the idea of bringing debt into the marriage, especially since he had none.

“It just made me feel kind of less than worthy, even though he never batted an eye,” she explained.

Bringing debt to the marriage?

When thinking about combining finances, she felt that it “didn’t seem fair for him to have to lose out on the ability to save that money or spend it how we wanted because of decisions I had made in the past. It felt like bringing baggage.”

Adding to the pressure was the fact that they live in the San Francisco Bay Area, where home ownership is insanely priced.

She realized how hard it was going to be to save with $800+ monthly payments hanging over her head.

But rather than stress out about it or shrug and move on, she decided to do something about her situation.
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They say debt can be good. That debt can be a tool.

And they say debt with low interest rates isn’t worth thinking about – just pay it every month and move on.

They say all these things – absolutes, simple judgments – and I listened.

Boy did I listen.

What I heard helped me rationalize the mounting balances of our student loan accounts as my husband, Sam, and I both worked our way through graduate programs. Instead of asking hard questions about our mindless pursuit to have our cake while also eating it, we maxed out our loans to prop up our lifestyle despite our very limited (read: absent) income.
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Dr. Jenn MD got a full ride to college and medical school, married her college boyfriend, and got a job near family when she graduated. What could go wrong? Debt, of course.

Not too many people feel bad for a doctor in debt. After all, doctors drive fancy cars, make six figures, and take exotic vacations; luxuries that the average person doesn’t have. It took not having the money for an unexpected $14,000 tax bill from the IRS (more on that later) to realize she was $1.9 million in debt.

So far, $1.2 million of the original $1.9 million has been repaid in almost seven years. Here’s her story.
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