This is a transparency post.
I have strayed away from my money goals recently and it has been a struggle to get back on track. In March and April, I was just swiping my credit card left and right.
I just finally paid off the credit card balance I racked up. My balance had gotten into the 1,000s. It was crazy. Luckily, I paid the balance in full before interest was assessed. However, I could not put money in my savings account and had to use it to pay my credit card balance. I am not proud of that. It will never happen again.
I choose to get back on my A-game. I need to come with a plan to tackle my student loans. My first step is figuring out how I got off track to begin with.
My main financial goal is paying down student loans
Right now, my main priority is to pay off my student loans. However, I feel in limbo about this goal. On one hand, I want to pay off all my student loans now so that I can move on to my next goal of increasing my retirement contributions and investing more of my income. On the other hand, I want to hold off and see if the federal government is going to forgive $10,000 of our student loans.
Knowing that this is how I feel. I came up with a plan to put money in a savings account for my student loans. This gives me time to see what is going to happen in the next few years. If it turns out that loans will not be forgiven I have the money set aside to pay down the balance. If they are forgiven, then I can put the money towards another goal. In my head, this plan works, but in practicality it has does not keep me motivated.
It is funny how our mind works. I have noticed when I make payments directly to my student loans and can see the balance going down I get really excited to keep going. However, I don’t get that same excitement when I transfer money into my designated student loan savings account. They are both helping me to accomplish the same goal, but they trigger totally different emotions.
It is in my best interest to put the money in my savings account for now. So, I have done some research on strategies to implement that motivate me to be consistent in reaching my goal.
1. Create Debt Tracker Printable
I have seen a lot of people use printables to document when they reach different milestones on their debt-free journey. This can be a really good motivational strategy, so I am going to give it a try for the first time.
I created my debt-free tracker on Canva. For every $500 I save, I will color in a graduation cap until I have colored in the whole document. By the time I color in every graduation cap, I will have saved $8,000 for my student loans. I plan to fill in this sheet as quickly as possible. Then I will start another one until I have saved $18,000 to pay off my student loans.
I am going to purchase a binder to keep this tracker and other personal finance documents. I have created different versions of the debt tracker. If you want to use any of them, I have attached the PDF’s here.
2. Write down my “why”
It is important to know your “why” with any goal that you create. It is one of the things most people overlook, including myself. However, knowing your why helps you stick with the plan even when you feel like doing otherwise.
Paying down my student loans is a part of my bigger goal of building wealth. Building wealth is important because it provides me with financial security that if anything happens I can provide for myself and my family. It allows me to access opportunities that I could not afford before such as traveling more, being able to participate in more experiences that I did not have access to, and give to communities that I am passionate about and need support. Money is a resource and I am going to use it to the best of my ability to create the life I desire.
I am writing this down in my personal finance binder to reference when I feel like straying away from the goal. The “why” I mentioned above is a good starting point, but I want to delve into it a little more. My “why” needs to be crystal clear to the point that I can envision the life I am going to accomplish.
3. Create a realistic budget
I need to continue to fine-tune my budget to make sure that it is realistic and sets me up for success. In the past, I would not allocate money for fun. This worked for me because I rarely had free time and worked all the time.
However, I only work one job now and have more time on my hands. This has increased my desire to spend money. It is important that I take this into account when budgeting so I can create realistic boundaries.
Also, I need to start listing important dates such as Mother’s Day, birthdays, etc into my budget, so I can catch these expenses ahead of time.
It is really time for me to get back on track. These are the strategies that I am going to start with.