Should You Pay Off Debt with a Laser Focus?

There are lots of opinions about how to pay off debt, but aren't all financial priorities important? Should your approach be laser focused or balanced?

There are lots of opinions about how to pay off debt, but aren't all financial priorities important? Should your approach be laser focused or balanced?As you know, there are several different types of bloggers in the personal finance community. There are the ones focused on paying off debt (like me), there are those who are focused on saving for early retirement, and there are those who are frugal so they pursue their passion no matter how little it pays. There’s something for everyone to read, learn from, and relate to. Personally I like reading a little bit of everything so I can get lots of different perspectives on personal finance.

Because I read lots of different blogs with lots of different perspectives, I sometimes have a hard time maintaining a laser focus on my biggest goal: getting out of consumer and student loan debt ASAP. But is that such a bad thing? Aren’t all financial priorities important?

A few months ago I decided that it is not only important for me to get out of debt, but it’s also important for me to continue to save money in my emergency fund and for my future retirement. In fact, saving for retirement from an early age is about the only financial mistake I haven’t made!

With that said, here are some factors you should weigh to help you decide if you should be laser focused on one goal, or more rounded in pursuing your financial priorities.

Rate of Progress

Obviously, if you decide to only focus on one financial goal at a time, your progress will be much faster than if you are splitting your priorities. Sometimes it’s easier for people to only have one goal at a time so they don’t lose focus or momentum when they are on a roll. I get that, really. But the reason I decided to split my priorities is to make sure I have something to fall back on “in case”.

Life Situation Considerations

I’ve read posts from other personal finance bloggers about why their life situation doesn’t warrant the need for an emergency fund while they pay off debt. For instance, if you are a non-homeowner and non-car owner, you may not think you need a large emergency fund (or even an emergency fund at all). However, because I’m both a car owner and a homeowner, I decided to work on building an emergency fund simultaneously while paying off my debt.

Peace of Mind

Most people who are in favor of continuing to save money in an emergency fund and/or a retirement fund while paying off debt do so for peace of mind. I think this can go both ways. Personally I feel more at peace as my savings fund grows but also as my debt balance and required monthly payments drop. As I continue to work my way out of debt, it’s nice to know that eventually the money I earn will be mine to do with as I please.

There’s no right or wrong answer when it comes to deciding if you should be laser focused on one financial goal at a time. It really comes down to personal preference and what works best for you. The most important thing is that you are making progress toward your financial goals, no matter what they are.

Do you pay off debt with a laser focus or more balanced financial priorities? Let us know your thoughts below!


8 thoughts on “Should You Pay Off Debt with a Laser Focus?

  1. I started out with laser focus – but was too focuses. I didn’t allow myself any extra spending money. I quickly resented my debt and started to spend again. When I corrected things, I took a more balanced approach. I put most of my money towards getting out of debt, but left some on the side so I could have fun and spend time with my friends.

  2. We paid made debt repayment the only goal. We were in a situation where our income (what little there was) was guaranteed. Also, we had health problems, so an EF would have been drained and repaid every month. It just didn’t make sense.

    It worked for us, but nowadays — with a house and car — we would definitely have needed an emergency fund.

  3. We’re following Dave Ramsey’s “Total Money Makeover” approach. We’ve had a mini-emergency fund (about $1,000) as we’ve been paying off all non-mortgage debt. We’re close to being debt-free except for the mortgage, and at that point, we’ll start saving our big emergency fund – enough to see us through 3-6 months of unemployment. I’m VERY fortunate to have had a pension plan all along, but we’ll also start saving more for retirement as we finally focus upon killing off the mortgage. So much of debt-repayment is psychological, and I find that Ramsey’s plan addresses the need to be encouraged as well as the steady growth in financial maturity that happens when you take things step by step.

    1. I read and listened to Dave Ramsey’s Total Money Makeover too when I first got started with the idea of financial independence. But, I don’t follow his plan 100% to a T as I still put some “fun money” in my budget. Therefore I’m not really “gazelle intense” as he says. But overall I like his ideas to get out of debt and have a baby emergency fund until you are rid of high interest debt.

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