Paying off debt is no small feat. It certainly isn’t easy. It takes grit, determination, and in most cases several years. But, debt repayment is surprisingly straightforward–you have one target: being debt-free.
The strategy is simple, pay as much as you can towards your debt. Sure, there’s nuance beyond that. You can follow Dave Ramsey’s debt snowball method or my favorite the debt avalanche. You can utilize a balance transfer credit card or even a personal loan to help manage payments and chip away at insane interest rates. But the essence remains the same:
Pay off the debt.
That clarity lends itself well to motivation. Once you've conquered that goal, though, what's next?
How do you keep making financial progress?
This question hit me like a brick wall sooner than I expected. I was zeroed in on repaying my federal student loans until COVID hit, payments were paused, and interest dropped to zero. Suddenly I had many possibilities of what I could do with my money–too many, actually.
Here’s an abbreviated list of what I considered:
Build an emergency fund
Invest in a brokerage account, a retirement account, or a mix of both
Allow lifestyle inflation, a bit… goodbye, $60 weekly food budget!
Kickstart a side hustle
Save for short-term goals like moving
…and if I was planning to move, surely I could spend hundreds at restaurants still on my LA bucket list.
For transparency, I was dealing with a few hundred dollars per month, a meaningful sum but not enough to fund a trip to the moon with Elon. But while I was falling victim to analysis paralysis, my progress came to a halt.
I never anticipated how hard it’d be to keep up the momentum when I was no longer chasing the shiny carrot at the end of the stick. It felt easier to sweep my financial goals under the rug and hope for the best. But that’s not an approach most of us can afford to take.
How do we stay energized after debt?
Get accountability
Paying off debt is often fueled by a sense of urgency. The interest rates alone can light a fire under your tush. But once that debt is gone, you need something–or someone–to keep you on track.
Share your goals with a trusted friend or family member. Get a financial coach on your team (schedule your Discovery Call here). Or post anonymously on Reddit, I can guarantee someone will request an update.
Budgeting apps are also surprisingly good accountability buddies, mostly because they are excellent at math. An app is ready to remind you of the cold hard stats at the drop of a dime. Agree to push notifications and suddenly your mornings will consist of “friendly reminders” like, “You’ve spent 113% of your budget.”
Sound familiar to my YNAB (You Need A Budget) users?
It doesn’t really matter who is checking in on you, as long as you know that sooner or later you’re going to have to measure up.
Start investing with $10
Confidence grows with time, especially when it comes to money and especially when it comes to investing. So start clocking it now.
Getting started, whether it’s $15 or $150, teaches you what you know, what you don’t know, and what doesn’t matter at all, something a book doesn’t usually let on to. My first investment read covered everything from stocks and bonds (yay!) to gold and silver (okay?), to artwork (nay!!!). And I read every single word. For what? To realize that half the book didn’t apply to me.
Investing a small amount also shows you what it takes to stomach market fluctuations, at an amount that won’t break the bank. This is an underrated skill you can only build by doing.
So taste what’s possible, open an account, and invest your first $10.
Think big
While repaying debt, every penny counts. You get in the habit and build the skill of living frugally to save money. When the pressure of sky-high interest rates is gone, however, you change tactics a bit.
Being debt-free allows you to think more broadly, to zoom out. To think bigger.
Focus on financial decisions that have a significant and lasting impact on your financial progress. Worry less about the small choices. When we get the big things right, nailing the small things matters less.
Take that frugal muscle you’ve built and apply it to the major things, like where you live, what job you take, and what car you drive. Managing these could save you hundreds a month, thousands a year, and maybe even a million over a lifetime.
Sign the apartment in your budget, then enjoy your Monday morning coffee guilt-free.
Soak it in
There are many downfalls to considering money taboo, one being way it forces us to celebrate our wins in a vacuum. It may even make you feel guilty or tacky for patting yourself on the back, in public or private.
But acknowledging your accomplishments helps maintain motivation!
Take a moment to feel good, to feel proud of what you’ve knocked out. Soaking it in might feel indulgent, but I’d argue it’s important–especially with something as big as finishing the debt repayment marathon. Think through every personal loan you crossed off, the credit card debt you conquered, the student loan you repaid, the now-paid-off-carr you drive.
Look at the part of you that doubted it along the way, and say, “I told you so.”
Then remember that feeling. Because I promise, there will be more to come, in money and life, that will feel daunting and impossible–but you don’t need to worry because you can do hard, crazy, challenging things like paying off debt.
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