This journey started about 6 years ago when I decided to go to college and I realized I had to pay for it somehow! So, I got a student loan with a ridiculous interest rate (which I didn’t know at the time). My loan came out to be roughly 22,000 dollars!!!! Just for one year. When I decided I no longer wanted to continue the college route, I had 6 months to get my s**t together and start paying it off.
Fast forward to now, Eric and I decided at the beginning of the year to pay it ALL off. When we started I was at almost $16,000 left. It is now the end of August and we have a little more than $9,500 left.
I am sharing this because I know so many of us are in debt–based on the article by CNBC: How much debt Americans have at every age, the average american has about $38,000 in personal debt.
Ignorance is costly! As you can see from what I went through, my lack of knowledge about loans and finances cost me dearly. So, don’t let that be you. Set out and learn some basics on how to finance and budget. It can save you quite a bit of money and emotional pain. So, here I am sharing my experience and I know we each have different lifestyle but I am hoping these tips can be applied to any way of life.
I think many people underestimate the struggle of becoming debt free. As a society we have been trained to work and spend. Which is not necessarily a bad thing. I love to spend–I love the hunt that is associated with shopping and I have got to tell you, I have gotten quite good at it. The problem seems to be us with our impulse spending.
Which leads me to tip number 1!!! Controlling your emotions controls your spending. I know you must be thinking why do I want to control my spending? I love to buy new and pretty things. I would normally say, go for it, buy the darn thing!! I will now tell you to stop and give it a second thought. If you haven’t yet heard of it, emotional spending is a real thing.
We buy so much stuff we really do not need. This is a big game changer when you commit to paying off your debt. You now ask yourself, do I really need that coffee, drink, or shirt and so on? Just about everything comes into question, because you now have a goal. Controlling your emotions is one of the hardest steps. We have this habit of buying what we like and think we need and then all of a sudden we are training ourselves to STOP!
I am not implying you stop cold turkey, because this really is like an addiction. What I did was limit going to the mall and my favorite stores. I only go when I know I need to get something. Another tactic I do is give myself a time limit. Let’s say I have several things to get done all before a certain time. I give myself a short amount of time at the stores, that way I just buy what I need and head out. This way I don’t do any extra spending. Tactic #2, I stop looking at my social email. We all subscribe to our favorite stores to keep up with any new trends or promotions. These are meant to entice you to go into their store and buy. I realized by constantly looking through these emails, I found myself wanting to shop online or go buy the next new thing.
Next time you find yourself wanting to purchase something new–remember is it really going to help you towards your goal?
I know circumstances pop up! Within our fourth month of commitment our puppy, Rocky had a couple of vet visits that were not easy on our bank.Yes, there may be set backs and maybe you are not sure if you will ever become debt free, but trust me, putting forth those $5, $20 or even $50 weekly or monthly make a difference. Which leads to Tip #2 don’t underestimate those small and large sacrifices. I really don’t like to call them sacrifices because anything that helps you live a better and easier life is worthwhile. It is important to stick to the goal and achieve it. With any goal there will always be obstacles but that doesn’t mean it has to be harder. It just means we change the plan and readjust accordingly. Instead of buying that morning coffee everyday, you start making some coffee at home. Save going to coffee shops for social gatherings instead. Sacrifices do not have to be a negative thing, you don’t have to give up everything you like completely. All it means is that you need to make some adjustments. Some of the things I have decided to limit are threading my brows, buying new outfits, buying Rocky toys and I only get my nails done for special events. There’s just an entire list of things we have stopped doing and we were surprised to find that we don’t miss a lot of those things. Our life seems more simple.
So, what are some things you find yourself spending on often? Can you maybe cut back on some of those?
Tip #3, Set a date to the goal. We have all heard this one. Make sure to set a date of accomplishment. When it comes to paying off your debt you need to take a hard look at your finances. How much can you afford to put towards your debt without going hungry! That is a little extreme, but again if that is something you want to do, then go for it. It is completely up to you how quickly you want to reach your goals. It has got to be realistic to your current lifestyle. We all need our basics, there are just certain things we can’t live without- the things you can’t compromise on. Let’s say you have $50,000 in debt, look at your finances and determine how much time it should take based on your current expenses and earnings. Keep into account there may be setbacks. This is something I didn’t do. Instead of having it paid off by the end of December, it looks like we can have it all paid off by the end of January.
Keeping a date helps you stay on track. Yes, I know with the setbacks you might not make that exact date, but you will find you are pretty darn close. So, set that date and just start.
Tip #4, give yourself small rewards each month or even every other month. Paying off your debt is no small fret and once you are done, I can only imagine how that may feel like. Every time I think about it, I feel giddy and excited. All of our extra money and most of our checks go to our goal. So, some things we may want to do we hold off on. But, that doesn’t mean we stop living. Make small plans, give yourself small rewards. Maybe its going out for brunch once a month or going to the movies. Its whatever you want that helps you feel proud and excited all over again. You are putting your hard earned money towards something that can free you. That is something worth celebrating after putting all that money towards that debt. I recommend not going all out, save that for the big day when you are debt free! Small rewards keep reminding you that you accomplished what you said you would that month.
Also, set that large reward! After you have accomplished your goal, what are going to do??? Make those plans, set it in a calendar. Eric and I have a 2 week vacation planned. That is something we keep talking about and motivates us even more. It makes us not want to spend and just reach our goal faster.
All it takes is some discipline. I know it is so easy to just write that but if you really want this, then it is achievable. I started a part time job, actually several to reach our goal faster. There is so much you can do to earn a bit more to put towards your goal. It is just a matter of how badly you want to do it. Ask yourself what are you willing to do for your goals?
I am definitely enjoying my process. I see myself getting closer and closer to accomplishment that I can almost taste victory! Even though a lot of my money, well most of my money is going towards the loan, I find myself enjoying it. I don’t see it as a loss. I see it as something I need to go through. I have decided to have a positive attitude about it and learn from this experience. You can definitely do the same. We got ourselves in the mess we are in and with a little time and focus, we can definitely get ourselves out,
It’s helpful to communicate with your family and close friends that there will be some things you are not doing for some time.Let them know that this change is only temporary but, their support will mean a lot. They will understand that you are working towards something important.
I hope these 4 tips have been helpful. Let me know the comments of any other tips you apply in your life. I am very curious to hear those.
Stay tuned to my Instagram, I will be posting about my debt free journey.
Until next time,