Finance Magazine

Debt Repayment = Fancy Italian Cruise?

By Kathleen O'Malley @frugalportland

I met a new friend on Facebook. Her name is Kristin, and she’s blogging her way out of debt. I’ve been there, so I wanted to get her perspective. I loved how she compared massive debt payoff with a luxury cruise to Italy. Take it away, Kristin!

“39 months”

That was my response when my husband asked me how long it would take us to pay off our debt. Three years and three months. It seemed like an eternity when we calculated our debt snowball last August.

We were not new to this game. In 2010, we finished paying off $70,000 in credit card debt. Then we got sloppy. We stopped budgeting. Slowly our spending equaled our income. We managed to pay off a bit of our student loans and the home equity line during that time but when I look back on it now, if we had stayed on the plan, we would have finished paying off everything by now.  We even financed a car. We really fell off the rails.

pay off debt or go on a cruise

So in August, we started to budget again. We had learned a few things since 2010. Armed with a debt snowball of $140,000 (the car, student loans and the home equity line), we started shoveling our way out of debt again.

With $140,000 worth of debt and a 39 month schedule, it can be difficult to stay motivated at times. I have unsubscribed from a lot of email lists trying to sell me vacations and new clothes. I can always subscribe again once the debt is paid off (plus my email is much less cluttered now).

Staying motivated is hard work. Getting out of debt is not going to be easy. The most important thing is to stop ignoring it. I printed out a copy of my debt snowball and taped it to the wall near my desk. I see it every day. It is a glaring reminder of stupid. It taunts me, “You’ll never pay it off. Just keep making your minimum payments. How about a cruise?”

One day, I started to believe. Maybe we couldn’t do this. Maybe we weren’t strong enough. This is a marathon and I hate running. Cruises are nice; I like cruises! We could go on a really nice cruise for two snowball payments.

Then I thought about the interest we were paying on the debt. How much interest were we paying on $140,000? Everything had a low interest rate. Even the car was only 2.49%. It couldn’t be very much. On a whim, I decided to figure it out. It was a bit alarming. In 2013, we paid $6,960 in interest. I have been on two cruises (during that time we stopped budgeting) and neither one cost $6,960. The Italian cruise with airfare, an aft balcony and excursions did not cost that much.

My mind started to focus. If we paid off all our debt, we could go on a really nice cruise each year on the money we save in interest. Forget the principle we are paying, just the interest! We could buy a car, with cash, every two years with the money we are paying in interest. If we invested the money in a retirement account at 10% per year for 30 years, we would have $1.3 million dollars. That is a lot of cruises!

When I explained that to my husband, we doubled down. Every extra dollar we could earn or squeeze out of our budget went toward the debt snowball. We were scheduled to pay off the car at the end of May. We paid it off February 19th.

We are no longer on a 39 month plan. We are now down to 36 months and looking to shave off even more.

Image by Karpati Gabor


Kristin Ingram is a CPA, professor and blogger digging her way out of debt. To date, she and her husband have paid off over $90,000 but they still have a long way to go. You can follow her journey to debt freedom at

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