Writing from experience, I know that pulling yourself out of student loan debt can take months or years. The process can liken itself to the overused metaphor of a marathon, not a sprint.
Since we, as fallible humans, tend to make messes, I thought I'd capture 7 of the biggest mistakes people make along the way.
I'm not judging here. I'm merely highlighting the mistakes either I made or I see others making because (I feel) there's so much hopelessness and disinformation in the space.
Here we go:
Believing you'll have these loans for the rest of your life. For the three years after I graduated UCLA, I held the common belief that "you'll have these loans for the rest of your life." Because I saw this phrase all over the culture (and because my loans were so massive ($80K)), I assumed it to be true. But as I learned more about personal finance and read inspiring stories of other middle class people slaying their mortgages and student loans in 2-3 years, I began to change my thoughts. I didn't need to stay in debt for 25 years if I didn't want to. What kicked it into high gear was the belief "I can do this in 2-3 years if I have the right mindset and I map my actions from the right mindset to the desired outcomes." Yes, the journey was difficult at times, but this newfound belief guided me.
Having no "why." And writing of difficult times, allow me to bring up the "why." When you set a huge B.H.A.G. in your life, you need to know why you're participating in an exercise that pushes you out of your comfort zone. Things will get hard and when they do, you'll have to remember why. Mine was fourfold: 1) I wanted to get my (creative) freedom back, 2) I signed the promissory notes (a.k.a., I gave my word), 3) the interest would’ve cost me way more in the long term, 4) there were other things I wanted to do with the money (a.k.a. the opportunity cost). My why guided me when the going got tough.
Not focusing on one debt at a time. If you’re dealing with an overwhelming sum, it’s best to break the loans down and focus one on at a time; it's easier to focus on paying down one sum at a time than making a payment and letting ol' Sallie Mae, decide where it goes. Making extra payments from smallest to largest REALLY helps (the snowball method), or from largest to smallest (the avalanche method).
Dilly-dallying. If you're going to be aggressive about it, be aggressive about it. If you're going to be moderate about it, be moderate about it. But choose a pace and stick to it because when you become lackadaisical, you get off track.
Not applying payments to the principal. Make sure your payments are going to the principal, not the interest. It's like pulling out a weed--making a payment on the principal pulls it out by the root; making a payment on the interest is like tearing off a leaf.
Not celebrating wins. When you hit a goal, celebrate the win. Do something nice for yourself. Your brain needs that neural association so you continue the positive feedback loop.
Giving up. Yes, there were a few times when I hit the wall and wanted to give up. Yes, I made mistakes in my budget. Yes, there were times when I was beyond tired, overwhelmed, sad and even cried. But I kept telling myself that my efforts would pay off. And they did. Massively.
After paying off my loans, I reduced my cognitive load significantly, and I got so many choices back in my life.
And so much sweet freedom.
And if you'd like those things too, hit me up here - would love to help!