💸 The Debt Diaries (10): A New Chapter
On second chances, quieter victories, and the debt that still remains.
Nine years ago, I started a series called The Debt Diaries.
Every month, I documented our debt down to the penny. Credit cards. Personal loans. Student loans. Mortgages. Car loans. I tracked payments, interest, principal, and every tiny bit of progress. Some months felt encouraging. Others felt defeating. But the series became a record of what financial life really looked like behind the scenes.
Then life changed.
The series quietly disappeared after 2018, but the journey didn’t.
A lot can happen in nine years.
🗓️ Money Milestones Since We Last Met
February 2024
Approximately $50,000 of my remaining federal student loans were forgiven through the Public Service Loan Forgiveness program after ten years of qualifying public service and payments.
September 2024
I got a divorce and sold my house, bringing my mortgage journey to an end (for now!).
February 2026
I paid off every remaining credit card balance.
July 2026
The Debt Diaries returns with just two loans remaining.
The last time I published a Debt Diaries update, I was tracking a mortgage, student loans, personal loans, two auto loans, and credit cards. Today, only two loans remain.
That does not mean the path from there to here was tidy. There was a divorce, the sale of my home, a damaged credit score, expensive car problems, new debt, and a lot of rebuilding. Some debts disappeared exactly as planned. Others were replaced by obligations I never expected.
But I am in a very different financial position than I was when this series began.
📊 Debt Snapshot
The numbers below reflect my debt starting point as of July 1, 2026.
Beginning next month, each Debt Diaries update will summarize the previous month's financial progress using balances from the first day of the following month.
The progress bars below represent the percentage of each loan that has been repaid based on the original amount borrowed.
Original Amount Borrowed: $13,702.00
Balance as of July 1, 2026: $13,389.80
Interest Rate: 5.00%
Minimum Payment: $125 per paycheck every two weeks ($250–$375/month)
Payment Frequency: Every two weeks through automatic payroll deductions.
Scheduled Payoff: None
Repayment Deadline: Anytime before retirement
Original Amount Borrowed: $17,895.93
Balance as of July 1, 2026: $16,037.36
Interest Rate: 7.89%
Minimum Payment: $316/month
Scheduled Payoff: September 2031
🏛️ The Retirement Loan
The retirement loan is a little unusual because I borrowed the money against my own New York State retirement pension. It is not a traditional bank loan, and it does not appear on my credit report.
I borrowed $13,702 in August 2023 to help fund my divorce. The loan was originally set up as a five-year repayment through automatic payroll deductions, with a scheduled payoff date of August 2028.
For a while, those deductions worked exactly as intended. By early 2024, I had reduced the balance to $12,266.62, more than $1,400 below where it began.
Then I changed employers, and the deductions stopped.
At the time, I was trying to survive the financial destruction of the divorce and rebuild the basic pieces of my life. My remaining credit card balances carried much higher interest rates, so those became the priority. The retirement loan gradually faded into the background, and I did not make any payments on it for nearly two years.
Eventually, it defaulted.
Because the money came from my own pension, the default did not damage my credit score. It did, however, create a taxable distribution, which meant I took a tax hit on the loan amount that year.
The default eliminated the original August 2028 repayment deadline, which felt like a massive relief and gave me some freedom and flexibility. I no longer have a fixed payoff date. The loan simply needs to be repaid in full before I retire. If a balance remains at that point, my pension benefit will be reduced to account for it. Obviously, I do not want that to happen. Even though I now technically have more than 20 years to repay it, I want it gone as soon as possible.
I am now employed by a participating public employer again, which means automatic payroll deductions have resumed. That is both a relief and a frustration, because restarting those payments became a bit of its own journey.
In February 2026, after paying off my final credit card balances, I immediately turned my attention back to the retirement loan. I enrolled to have payroll deductions taken out again.
Then I waited.
And waited.
The deductions never started. Meanwhile, the loan continued adding approximately $50 to $55 in interest every month, quietly erasing more of the progress I had previously made.
By June, I was tired of watching the balance grow. I decided to begin making small manual payments on my own, with a goal of paying at least $100 per month while continuing to manage my auto loan and rebuild my savings.
On June 23, I made my first manual payment. It was my first payment in more than two years. The balance at the time was $13,394.12, meaning it had ballooned back to nearly the amount I had originally borrowed in 2023. Still, I felt really positive that I was taking back control of the loan and finally paying on it again.
Then, in July, after I had already made my first two manual payments, the payroll deductions finally began.
A total of $125 is now deducted from every paycheck, and I am paid every two weeks. That means the loan will receive $250 in most months and $375 during the two months each year that include a third paycheck.
That is considerably more than I had planned to pay each month, and it changes my debt-payoff strategy. The retirement loan has now become my main debt-payoff priority. Anytime I have extra money to put toward debt, it'll be thrown at this loan.
Since the payroll deductions are already taking a significant amount from every paycheck, I want to eliminate this loan as quickly as reasonably possible and free that money back up in my budget.
🚗 The Auto Loan
I had not had a car payment since I paid off my beloved Jeep Liberty in 2020.
When I made the final payment on it, the plan was simple: drive it for many more years, save money, and eventually upgrade to the Wrangler I had always wanted. My goal was to stay without a car payment for as long as possible.
That plan ended in December 2023, when another driver rear-ended me and totaled the Liberty.
Insurance paid me approximately $8,000. I was determined not to take on another loan, so I used the payout to buy an older Jeep Compass with cash.
It looked like the financially responsible choice.
It was not.
I never trusted the Compass. It felt shaky, unreliable, and smaller than the Liberty I had loved. Then the repairs began. In January 2025, it needed approximately $2,600 in work just to pass inspection. A few months later, I paid another $420 for brakes and rotors. By August, the grinding had started again.
My savings account had already absorbed the repairs, and I refused to keep pouring money into a vehicle I hated and did not trust. I really, really didn't want another car payment. Staying payment-free had been the goal ever since I paid off my Liberty in 2020. But eventually I realized I wasn't saving money anymore. I was simply paying for uncertainty in a different way.
In August 2025, I bought a 2022 Chevy Trailblazer. It was my first major purchase after the divorce and the nicest, newest vehicle I had ever owned.
The original amount financed was $17,895.93 at 7.89% interest. My minimum payment is $316 per month, and the loan is scheduled to end in September 2031.
I hope it does not make it anywhere near that date, but for now, I will be making only the minimum payment. Once the retirement loan is gone, I will begin paying extra on this one.
Having to take this loan out last year slowed down some of my other financial goals, but reliable transportation has its own value. After the Compass, peace of mind was worth putting back into the budget.
💰 Savings and Credit
My savings account took several significant hits between the divorce, repeated repairs on the Compass, and the down payment on my Trailblazer.
Since then, I have worked hard to build it back into five figures.
I do not plan to publish the full balance every month. Instead, I will share how much I am able to add, or occasionally how much I need to withdraw when life happens. That lets me track the progress without turning the exact amount sitting in my account into public information.
My credit score is currently 757.
During the divorce in 2024, it dipped into the 500s. Rebuilding it has become one of my favorite measures of financial recovery because it represents hundreds of small decisions made consistently over time.
🎯 My Financial Priorities
These priorities will guide my financial decisions over the coming months and years. They may change as life and my finances change, but this is where my focus stands today.
- Continue growing my savings as I work toward buying a home again.
- Pay down my retirement loan through the required $125 biweekly payroll deductions, making it my primary debt-payoff focus. Whenever I have extra money to throw at debt, it'll go toward this loan. I would like to get this paid off as soon as possible so I no longer have payroll deductions. It always feels like a big hit on my paycheck.
- Continue making the required $316 monthly auto-loan payment and begin accelerating that loan once the retirement loan is paid off.
- Stay free of revolving credit card debt and avoid taking on unnecessary new debt.
- Continue improving and maintaining my credit score as I prepare for a future home purchase.
📖 What I’ll Be Tracking
The original Debt Diaries were about surviving debt. This version is about building long-term financial stability.
Each month, I’ll continue tracking the numbers, but I’ll also be documenting the decisions behind them.
- Original loan amounts and current balances
- Monthly balance changes
- Progress toward paying off each loan
- Total remaining debt
- Total paid during the month
- How much went toward principal
- How much went toward interest
- The percentage of each payment that actually reduced debt
- Savings added or withdrawn
- Credit score updates
- Financial wins, setbacks, and lessons learned
A quick note about the dates: Beginning with The Debt Diaries: July 2026, to be published in early August, each post will summarize the previous month’s financial progress. The updated balances will come from the first day of the following month, giving me one consistent checkpoint for comparison.
💭 A Different Kind of Freedom
Nine years ago, financial freedom mostly meant eliminating debt.
Today, it means something a little different.
It means having choices. A growing savings account. A healthy credit score. Reliable transportation. No revolving credit card debt. And eventually, no debt at all.
I’m not there yet.
But for the first time in a long time, I feel like I’m headed in the right direction.
Welcome back to The Debt Diaries.
Explore the full series on the Debt Diaries landing page.
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