Establishing Your ‘Why’ for Paying Off Student DebtAugust 31, 2020
If you are working to pay off student loan debt, you are not alone. Approximately 45 million Americans have student loan debt, with the average borrower facing almost $33,000 to pay back. This could take ten years or longer to get rid of the debt. If you are on a mission to pay off your student loans, or any debt, establishing your ‘why’ can be a big help to pay them faster.
Establishing Your ‘Why’
Studies have shown that writing down your goals makes you more likely to achieve them. This can easily be applied to the goal of paying down debt. Determining your ‘why’ and writing it down can help keep you motivated to knock out your student loans.
Knowing your motivation will also help you when the debt-paying journey gets hard. The process to pay off debt, especially large student loans, can be stressful and seem never-ending. You will inevitably encounter setbacks to your payoff goal or hard times that make you question whether you should stay on track. For example, you may have budgeted one month you were going to pay an extra $200 to your student loans, then a few days later an unexpected car repair or medical emergency occurs and now the $200 has to be spent on the emergency instead of your student loans. This may be a setback that makes paying down the debt a little tougher that month. But having your motivation, your ‘why’, can help you see the big picture and stay focused on your debt crushing goal.
Every person will have a different reason for wanting to get out student debt now, but some ideas you may want to consider when establishing your ‘why’ are:
Desire to Start a Family
Most everyone has heard how expensive kids can be, and if you are paying student loans off, you may not have much room left in your budget to cover all the costs associated with having a baby. Although you shouldn’t put off starting a family because you have debt, use it as motivation to pay it off quickly so you won’t have to feel stressed about finances when you have a little one. Make a goal to have a portion or all of your student debt paid before your family grows. Try to meet your goal by budgeting for extra payments to your student debt. It also might be helpful to start budgeting and saving for baby expenses before the newest addition arrives.
If you want to focus less on your 9 to 5 and more on a passion project, retiring early may be on your radar. This could be a great motivator to use extra money to eliminate your student loan debt. Having fewer expenses, like debt payments, allows you to live off of less income during retirement, which may allow you to retire earlier than expected.
Buying a House
If you dream of buying your own home you may encounter hurdles being approved for a mortgage if your debts compared to your income are too high. But every dollar towards your student loans can help you get closer to the dream of owning a home by decreasing your debt totals.
Being debt-free provides many opportunities that may not be sustainable when you are facing debt payments each month. You are free to accept a dream job that may pay less. You have the opportunity to have more experiences, like travel and music festivals, that may not have previously fit in your budget. Freedom from student debt payments can be a great motivator when you are trying to establish your why because it can lead to many more goals you want to accomplish.
How to Stay Motivated
Once you have established your ‘why,’ try some different techniques to stay motivated to actually achieve the goals. Besides just writing down your goals, here are some other techniques to try:
Visualize Your Goal
This can be as simple as putting up a picture of your dream house to remind you that homeownership is in your future or creating a whole board of how you envision your life after paying off your debt. However you do it, actually seeing pictures and representations of your goal can help “keep your eye on the prize”.
Debt Payment Charts
If you are more motivated by the amount of debt paid, use a debt-payment chart to show your progress. You can do this by drawing out boxes to represent amounts of your debt and shading in when you reach that milestone. You can also do a simple search online to find free debt-free charts to use.
Be sure to reward yourself, but do it in moderation so you don’t undo your progress. When you meet a milestone of paying off your debt, reward yourself with a little something special. For example: Set a goal that every time you pay down your debt by 20% you buy a purchase you’ve been eyeing under $100. This will help you feel like you are still able to buy things you enjoy while making progress on your debt paying journey.
Are you looking to pay your student loan debt off quicker? Check into refinancing your student loans. Refinancing can be beneficial for many borrowers because it can help you save in interest costs and pay your loans off faster. Use our Student Loan Refinance Calculator to see what you could be saving.*
Paying off student loan debt may be a stressful journey at times, but once you establish your why for wanting to pay off the debt, you will feel motivated to keep going during the tough times. Accomplishing your goal of paying off student loans will allow you to feel free from the debt and help you get closer to the other goals you have planned. You can do it!
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