Final Push Motivation

My current countdown system. I love checking off each $100-dollar increment.

Over the past year, I’ve gone through periods of great motivation and extremely low motivation. I’ve wanted to give up and go shoe shopping, but even when I seriously considered throwing in the towel, something kept me going. Sometimes it was an internal drive that this is the right decision and a worthy goal, but sometimes I had to go searching for that motivation.

Knowing that some of my readers might be just starting out or searching for their own motivation, I wanted to compile a list of things that actually motivated me at various points:

Make an After-Debt Wish List. Mine included an updated wardrobe clothing, horseback riding lessons, adding to my Roth IRA, and gifts and charity for others. Everything was detailed: “new flats” instead of “new clothes.” I also have a list of charities I’d like to donate to as I can.

Make an After-Debt Budget. Assuming you’re making the same amount you are now, mock up a realistic budget of what life will look like when you’re debt free. When I did this, it was great to see how much I will contribute to retirement (15% is a lot!) and still have money to pursue other goals like saving for a new(er) car, travel and horseback riding. Although this budget probably won’t be the same by the time you’re done paying off your debt, it shows a very different picture of your life.

Find Like-Minded People. I had many conversations with family members and friends who were supportive of my goals or pursuing similar goals. These often rejuvenated my resolve and let me know that people were rooting for me.

Talk to Non-Like-Minded People. As motivating as it is to talk to people similar to me, I find it just as motivating to talk to people making different decisions. Make a conscious effort to empathize with their situation, but recognize the reasons why you are going down your path instead of theirs. There’s a lot of reasons why you’re paying off debt, and some people will disagree with you. Embrace it. Know you’re doing what’s right for you, and they’re doing what’s right for them. Be thankful you are $X less in debt that you were at this time last month.

Find Blogs, Podcasts and/or Books. There are so many free resources available via the Internet and public library to educate yourself about different theories and methods, not to mention personal memoirs, tips and tricks to save money, sell your stuff, live frugally. My favorites over the past year have included No More Harvard Debt, the Dave Ramsey Show, Living Well, Spending Less, And Then We Saved… and, honestly, so many, many more that it’s impossible to list them all. Start looking and bookmark your favorites. Go to the library and just pick up a bunch of books. Read the ones you identify with and return the ones you don’t.

Make a Debt Countdown. I did this a couple different times in different formats including a bar graph that I colored in, a list of debts I crossed off as I paid them off, and a $100-increment list that I highlighted when I got my balance to that amount (see the picture above). I’ve also taken screenshots of my loan balances so I can flip back through and see how far I’ve come.

Keep a Record of your Journey. Keeping this blog up has been a motivator in itself. Each month, I want to be able to show progress, and it’s so much fun now to go back and read where I was a year ago. Wow. So much has changed between then and now. Even if you don’t want to keep a blog, write in a journal or even just take snapshots of your accounts so you can see where you started.

Debt Free By 26

These Texas sunsets keep me going some days.

After May turned out to be such a great month, I started crunching some numbers, like I’m prone to do, and found something interesting lurking in the calculator. With a slightly shifted budget from my second job, I can pay off my student loans by my 26th birthday (August 11, 2015).

The thought has been rolling around in my head for the past few weeks, even months, to make that a goal, but the numbers have never quite matched my ambition. But this time, after such a phenomenal month, I saw things in a different light. Instead of an impossible mountain to climb in a ludicrously short time, I saw a reasonable goal that, with a little (lot) of hard work and focus, I can accomplish.

How, you might ask?

  • A cut in our rent means that I should be able to dedicate $1,800-2,000 from each my June and July paychecks to my loans.
  • One freelancing job will pay between now and then for $150.
  • Keeping my fun spending to a strict $50/week (just enough for one riding lesson) and consistently working at least 9-10 hours each week at my second job will mean about $125 per week for loans.

That equals roughly $5,000 between now and August 11, just over what will be needed to pay off my remaining $4,800 in student loans.

Will it be hard? Yes. Is it impossible? No.

But the very idea of entering into my 26th year on this planet without owing anyone anything is incredibly enticing. It would also mark, almost to the day, seven years since I first went into debt and took on my very first student loans as a college freshman in August 2008.

After mulling over this for a few days, not quite ready to put fingers to keypad, I found this quote in my Passion Planner:

Once you make a decision, the universe conspires to make it happen. -Ralph Waldo Emerson

And a few days after that, we settled up end-of-May bills, and I found an extra $200 to put toward my loans, completely unexpected due to us basically not spending any money this month.

So why not? Why not aim for the absolute best?

The flip side is that even if I “fail,” they’ll still be gone at the end of August with my paycheck. So failure is not an option because failing is still succeeding.

I’m Okay With This

Since college graduation in December 2011, my student loans have been hanging over my head. Last summer, I made the decision to tackle them head on. I chose to sacrifice some short-term wants for longer-term goals. Focusing so single-mindedly on this goal has been exhausting, which I’ve been feeling more and more each day as the finish line approaches.

But then this happens, and I think, I’m okay:

CaptureYep. If I decided to just stop (which there’s is no way I’m going to do), I could do absolutely nothing to my loans for almost two years.

Which brought me to the fact that, if I had stayed on the minimum payment 10-year plan, I would have finished paying my loans in June 2022.

So no matter what doubts I might have in my mind, I just need to remember that and know: I’m okay with this.

The Break Down

Now that I’m done with my personal loan and focusing completely on tackling my Stafford Loans, I thought it might be interesting to see where I am on each individual Stafford Loan (rolled into one account and monthly payment through Great Lakes) and compare that to where I started when I graduated college in 2011.

So here it is, organized in chronological order:

Loan Date Original Amount Interest Rate Current Balance*
Aug 2008 Subsidized $3,500 6% $2,315
Aug 2009 Subsidized $4,500 5.6% $3,287
Aug 2009 Unsubsidized $2,000 6.8% $0
Aug 2010 Subsidized $5,500 4.5% $4,012
Aug 2010 Unsubsidized $2,000 6.8% $0
Aug 2011 Subsidized $1,250 3.4% $0
Aug 2011 Unsubsidized $682 6.8% $0
Total $19,432 $9,614

*Includes accrued interest.

The biggest year of loans was my sophomore year (2010-2011 school year), when I borrowed $7,500 for tuition, books and living expenses. I graduated in December of 2011, which is why the last year is so low, comparatively. The summer before that school year started, I also worked 40+ hours each week (except for a 3-week stint of mono) and saved a lot of money by living cheaply and not moving out of state for the summer like I had in previous years.

It doesn’t seem like much, does it? A thousand here, a couple thousand there. No amount is astronomical. Yet, it adds up tremendously over seven different loans and four years.

The great news is that I’m in the final stretch of this journey. To date, I’ve paid off $9,818 in Stafford loans (51%), and more than $15,000 in total (including the loan to my parents and a tiny Perkins loan that was paid off right out of school). When I look at it that way, I feel far more accomplished on this journey. I’m doing this. It’s within reach.

And, compared to when I started this process, I have a much bigger shovel to dig my way out of this hole.

That last 49% of the loans listed above will fly by as long as I can stay focused on the goal, the reason and the process to make it happen.

A What Budget?

It's just better to look at pretty landscape pictures when thinking about money.

It’s just better to look at pretty landscape pictures when thinking about money.

After floundering around for a few days, looking for inspiration, advice and insight around the Internet and among close friends, I realized this plan to pay off my student loans (still looking for a catchy name–suggestions welcome) will never work if I don’t actually create a plan.

Oh, I love planning. My heart skips a beat at the sight of a well-organized list. But budgeting is a different story. Boyfriend recently introduced me to his budgeting system, which includes about three different computer programs and an intense tracking system of receipts… not gonna work for me.

And yet, my system of budgeting by two-week increments via Post-It notes in my day planner is obviously not working either.

Even though I have a $1,000 emergency fund (all Dave Ramsey style), I find myself constantly dipping into it for things I forgot to budget for, like car and renters insurance and vet bills. It’s those regular-but-irregular things that keep hitting me off the path the past year or so.

Once I decided to make a written budget, the actual making wasn’t too difficult–I know pretty close to how much I spend, and I have a goal figure in mind for how much I want to pay out of my normal paycheck toward loans. [At the moment, I’m not including freelance work in my expected take home pay because it’s sporadic at best and hard to predict when I will get paid.]

To start, I found this Quick Start Budget from Dave Ramsey. There are many places on it that I could just cross off–I don’t tithe, I have my emergency fund established, and I don’t have children–so it was simple enough to fill in the things I do have. I like having it printed out and written as sort of a gold standard, but I also want to start tracking planned versus actual to make sure my planned budget is realistic and to see if there are places I can cut.

I’m not prepared to invest in Quicken or another program like that, so I went to my trusty Excel and found a template already built for household budgets. Who knew what I needed most was already at my fingertips? With some minor editing to get the form to fit my needs and keep it simple, I suddenly had a written budget. Eek! And it doesn’t involve Post-Its!

It has a place for all my regular expenses–rent, food, various utilities, etc.–but I also did special notations for the regular-but-irregular expenses. That money will go in a separate savings account so it’s not sitting in my checking account (confusing me), but when one of those items does come up, I have the cash immediately available instead of dipping into my emergency fund or using my credit card for things that aren’t truly emergencies.

August is the first month I’m using this new system, and I can’t wait to see how I like it.

If you have a budgeting system you love, let me know! I’m open to suggestions, and I’m sure there will be tweaks as things progress.

Getting Serious About Student Loans

SERENITY NOW!

SERENITY NOW!

Time for some brutal honesty:

I graduated college 2.5 years ago roughly $30,000 in total debt. Although most of that was student loans, there was a nice chunk that I owed my parents for various rent-food-utilities-etc. expenses while I was in school.

Undoubtedly, I was ill prepared for college. I had virtually no savings, didn’t work terribly hard to get scholarships, and genuinely thought working part time during the school year and full time over the summer would get me through. [Pause for side-splitting laughter.]

Now, as the third anniversary of the date on my diploma looms on the horizon, I sat down and realized that I’m still a solid $24,000 in the hole, $17,000 being student loans. Ouch.

Even though I have made progress, I’m shocked by how large those numbers are. I know, to some people, that’s a drop in the bucket, but I’m broke–a $20 bill is a big deal most weeks, I’m living paycheck-to-paycheck despite having a good job, and I need to get myself out of this cycle of constantly going over budget.

And so, in this public declaration, I’m saying it. I want to be done with my student loans by the end of 2015. I’m over it. I’m sick of it hanging over my head. I’m fed up with feeling guilty every time I go out to lunch or buy a new shirt.

So, for the next 17 months, I’m going to buckle down, do the beans-and-rice thing, and tackle this debt like it’s nobody’s business. I’m focusing my efforts on the loans I owe the government and setting aside what I owe my parents for right now. That will be the next thing and probably will only take a few months to knock out. But in my mind, there’s a HUGE difference between 18 months (not so far away) and two years (forever).

I know I’ve mentioned student loans before, but I’ve shied away from writing too much about it because (1) it’s depressing and (2) it’s embarrassing.

But then today, I realized that sharing my story might help convince even one other person to face their finances head on instead of assuming it will work out some day (it won’t).

Student Loans as of July 15: $16,668

Goal: Pay off in total by December 31, 2015

Action Plan: Uh… I’m still working on that. Stay posted, and wish me luck!

Unexpected Inspiration

Choose the path you haven't traveled yet.

Choose the path you haven’t traveled yet.

Today I got a giant sucker punch in the gut of the universe reminding me to embrace life.

First, I saw an article from Relevant Magazine about the trials of the quarter-life crisis.

Then this essay from The Minimalists about envisioning the worst… and best… case scenarios. It reminded me of something my sister always tells me when I’m being dramatic and overly worried: What’s the worst thing that could possibly happen? (My car dies on the side of the road because of some mysterious squeaking noise and won’t start no matter what I do.) And how would you deal with that? (Call a taxi, get myself to a car dealership, and buy a new car.) Then everything else will be a piece of cake.

Finally, I listened to this speech by Neil Gaiman. This link has both a video and the written out version. He’s wonderful to listen to, but I love having both available.

And all this brought me a great reminder of my word for this year: Embrace. Continue reading