The Argument for Not Aggressively Paying Off Debt


Let me preface this by saying that you should, always and forever, make the minimum monthly payments on your debt and do not use this post as licence to do otherwise!

Not that we have that out of the way, I really do think that you can make an argument for not always paying off debt super aggressively.

I have been aggressively paying down my student loans since November 2016. I started with a balance of just over $20,000. As of this morning, the balance sits at $3,390.38.

I don’t share these numbers often. I am not aspiring to be one of those wild debt payoff stories, a la “Person X paid off 10 bajillion dollars in debt last year!”

That is because these numbers do not say it all. The ins and outs of my debt payoff story are complicated, highly personal, and not all shared on the blog. I have had a great deal of fortune that has allowed me to pay off this much debt in seventeen months. Like immediately finding a job after finishing graduate school, receiving some unexpected windfalls, and finding some pretty lucrative side hustles.

So today, this is not meant to serve as a “I have paid off 17K of debt in 17 months” variety of post. Quite the opposite, in fact. The purpose of this post is to actually talk about why – when I am thisss close to reaching that sweet $0 balance – I have decided to stop repaying my student loans so aggressively.

I have come to realize that sometimes there really is an argument for not paying off debt. That might seem super strange, especially when I have written about how much being debt free will mean to me.

March will be a three paycheque and a tax return month, meaning I have a significant pile of cash coming in the door. Without much thought, I could make one lump sum payment that would forever obliterate my student loans.

It is so tempting. Trust me.

But that is not how I plan to use those incoming dollars, and here’s why.

2018 is going to be an exciting and scary year for me. I talked about this in my latest newsletter but in brief, I will likely be moving for school or work this year. I do not know where and I do not know when, but this is a very real possibility in my near future.

Now if I have learned anything after moving 15 times in the last 12 years, it’s these two lessons:

1) moving is way more expensive than you think it will be

2) not having tons of “stuff” makes moving way more amazing

This post is mostly about point #1. Whether I end up moving to a different city in Canada, to the United States, or to Europe – it’s going to cost me. And here is the thing: I am still relatively new in my financial journey.

So I do not have a fully funded emergency fund (lol like not even close).

I do not have a big buffer in my chequing account.

I do not have 3-6 months’ living expenses stowed away somewhere.

PF Twitter aside, this situation is probably the reality for most of us. And that is totally okay. Having a fully funded emergency fund is going to be great, but guess what? That will probably take me a couple more years.

So what can you do in the meantime, when life is happening and changing quickly and you feel wildly unprepared for all of the things coming your way? Do everything you can in this moment to plan for it.

And sometimes that means slowing down your debt repayment so that you can direct extra savings toward your more immediate needs.

That means I am taking thousands of dollars that I would normally put toward my student loan debt and well…I’m not doing that right now. Having my debt paid down would be so so nice. But you know what would be even nicer? The knowledge that I am financially prepared for a big move.

I am financially planning for the possibility of everything from movers, visa applications, shipments, an immigration lawyer, first and last month’s rent, and a security deposit. During this transition, I will also most likely not be receiving a paycheque for a couple months.

Having liquid cash to cover all of the potential expenses associated with this move is so much more important to me than making an extra debt payment right now. It’s more important to me, and I believe it is the more fiscally responsible decision. The last thing I need is to pay off all my student loans only to rack up a bunch of credit card debt in a couple months’ time. There are definitely circumstances where you can make the argument to not pay off debt, and I think this is one of them.

If something comes up in your more immediate future that would benefit from having liquid cash, then I say do it. Go back to making the minimum payments on your debt for a little while and, using any extra dollars that would normally go toward debt repayment, set up an auto-transfer to a high-interest savings account biweekly or monthly.

Even if you are not where you want to be financially, even if you don’t have 3-6 months’ living expenses sitting in your rainy day fund, even if you don’t know exactly what is coming your way in life – you can still adapt.

An example I found super inspiring was when Bridget Casey at Money after Graduation wrote about her unintended pregnancy and how she financially prepared for an unplanned baby. She may not have been totally prepared for this life event and did not have a baby fund on the ready when she got pregnant, but she points out that she had months to figure it out (“Your baby is not arriving next week. Chill.”)

Same goes for other big life events. While there are true emergencies, other big life stuff usually happens so that you can kind of prepare for it, at least a couple months in advance.

And preparing for it might include re-directing your extra student loan or mortgage payments toward your savings. Slowing down debt repayment can absolutely make sense and be a better financial decision if you are preparing for a big life transition.

So have you ever slowed down your debt repayment because you had something big in your life coming up? Would love to hear about it in the comments!

2 thoughts on “The Argument for Not Aggressively Paying Off Debt

  1. Great post, Kate! I have a car loan (which is a PF NO NO), but it is at zero percent interest, so I have no plans to pay it off any time soon.
    I paid off my 38k in student loans so quickly to have a better credit score to buy a house. We neglected our savings account, and only kept a $1,000 in it during this time. That was stressful!!!! I think it’s MUCH better to balance debt payoff and savings, as long as the interest rate isn’t insane.


    1. Thanks for stopping by, Steph! I know – car loans are so condemned by the PF community, but 0%? I mean…if the monthly payment isn’t seriously interfering with your cash flow, I say take it slow and steady with repayment and put money towards investments instead!

      I have also kept a pretty small emergency fund while repaying my debt (~$1,500) and this has stressed me out. The interest on my student loans was high enough (~6%) for me to really prioritize repayment rather than savings…but still stressful!! Now that my student loan balance is small, and I am not paying much in monthly interest, it feels nice to be able to re-direct some funds toward other goals.


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