I often talk about the mental challenges of convincing yourself to turn your financial life around, things like looking at what’s really important to you and facing addictions to buying stuff.
However, I’ve discovered that other mental challenges pop up when you get on the right track, and the challenge that I’m facing right now is patience.
When I first started turning my financial life around, I had over $10K in credit card debt, a truck with almost three years of payment left on it, almost $30K in student loan debt, and I was living in an apartment.
Flash forward fifteen months. The credit card debt is gone and the truck is paid off. The student loans are down to about $25K and they’re my big focus right now. However, I also bought a house in that interim, saddling myself with another big debt load, about $160K.
Here’s the problem: I’m making good progress on my debts, but I want them gone now. Month over month progress is nice, but I am looking forward to debt freedom with such intensity that I can barely stand it, especially with regards to the student loans.
The debts, even the mortgage debt, are a constant reminder of how I made bad choices in the past. I made some flaky choices while in college and it resulted in far more debt that I would have had if I had my head on straight. After college, I ran amok with spending and dug myself a deep hole that I’m still filling in. If I had not made poor choices then, I would have a much smaller mortgage now, so even the size of the mortgage serves as a reminder of my bad choices.
So how do I handle this mental block?
First, I try to take great solace in the progress I’m making. I keep careful track of my total debts, total assets, and net worth, and I feel very good when the net worth goes up and the debts go down – right now, I’m not nearly as concerned about growing the assets, because I know that when the debts are gone, the assets will skyrocket.
Second, I use “found money” to contribute to that debt reduction goal. If I discover any resources that I’ve forgotten about, like my recent discovery of a few savings bonds, I apply that resource directly towards debt repayment by making an extra large payment the next time around.
Third, I set target dates for repaying each debt and revel when I come in ahead of schedule. For example, one of my two student loan debts should go poof in February of next year at the pace I’ve been working at. However, I think it might go away in January and possibly even in December. That’s cause to feel really good about my financial choices.
Fourth, I utilize the youth of my children. My children are both very young (a boy just under two and a girl who’s still under a month) and I realize that many of my big goals are tied to them when they’re older. For example, we want to build a house when the boy is fifteen, and then shortly after that they’ll go to college. Another : in about five years, they’ll both be in school, freeing up child care costs to tackle the debt monster. Every time I see my son toddling around, I realize that I do have time before my goals get close.