Maybe I’m a goal person. I am the weirdo that creates to-do lists and adds things I’ve already completed just for the satisfaction of having an additional thing to cross out. (oh man, did I really just admit that?!)
Anyway… debt is no different. And I do not think you have to be crazy to see the benefit and reap the benefit of setting a goal and reminding yourself of it – constantly.
While our end game (as evidenced in the picture above) is to have the freedom to travel – using cash – it is important to set additional goals while you are still working to achieve that overarching *supreme* goal.
Where do you start when outlining your goal?
Again this is highly personalized and extremely depends on how much debt you have. For Garrett and I, who topple the $200k range – sans mortgage, people – we know are in this cruise boat dingy for a pretty long haul.
So in making our goals we have to consider things like, Garrett’s residency is only for three years and after that he will start a new residency and we don’t know where we will be living, with what cost of living, what his salary will be, etc. We also don’t know if / when we will have kids before our debt is completely paid off. Life is happening and we can’t just pause our lives to pay off our debt and it’s not very reasonable or financially savvy to expect everything to mellow out in a few years and assume we will take care of the debt then. So we made some assumptions to help us shape our goals and projections for the future.
In total we would ideally like to have our debt paid off within the next seven years. We know this sounds extreme and it might not happen (which is okay) but that is our current goal. On a smaller scale (which I find necessary since we owe so much and that sounds seriously like ions away) our second goal is to have all private student loans paid off by July 2017. On an even smaller scale, our goal is to have all our credit cards paid off by September 2016.
Breaking it down like this makes it so much more manageable so if you are carrying a large debt load – hell, especially if you are carrying a large debt load – then set milestone goals along the way.
Keep with it – stick to it. Obviously budgets are hard to keep. Obviously it’s even harder to not spend money when you have extra money you are allotting to debt. I mean why not take that money every once and a while and instead of paying you debt, just go a little crazy?!!? … haha. We both know why and that is because it will not put you any closer to your goal, financial freedom, or building your wealth and empire. A big splurge that you will forget about in two weeks is so not worth it. Instead, associate splurges with meeting goals. Reward yourself only after you have met a goal – but keep it reasonable.
A hugely helpful way to stick with your debt is to constantly remind yourself of it. Put a sticky note on your work computer, on your fridge, in your car, etc. to be a reminder of the end game. Personally, that number is severely depressing for me so I prefer to stay motived by a different means. I do this by reading articles, books, blogs, etc. about debt and wealth management. I obsessively research finances. Whatever method you choose, the point is the same – keep your mind focused!
At the end of it all…
Know that your goals are flexible. Of course you want to stick to them but also know when you need to cut a little slack. Did you just have a brand new baby so you are out of work a few months? Don’t shame yourself for having to push your “pay off date” back a few months as well. Like previously mentioned, life is happening, just stay on top of your goals, make the right adjustments, and stay focused on the end game.