Every December, I go through each page of the planner I’ve used for the year and write any transferring events or activities in the next year’s planner. I’ve always enjoyed this activity; it’s exciting but somehow soothing. I love planners, and I’ve tried countless designs, but black Moleskines are my jam. I fill my planners with the usual birthdays, appointments, anniversaries, and activities, as well as to-do lists, and anything that I want to remember or track. And, I periodically write my loan balance on those pages, both as a tracking measure and a means of motivation.
This annotation encourages me to take stock of the previous year; to savor my triumphs, remember pleasant days, and determine my course for the upcoming year. I also noticed something about 2016: My loan balance had shrunk 66%. I had started 2016 owing $15,217.73. I currently owe $5,156.39.
I was floored. Though my approach to debt is aggressive, I hadn’t truly seen the big picture of how much I had done in a year. I had paid down 75% of my remaining debt.
Some background: I graduated in 2013 with $27,000 in student loan debt; payments started in January of 2014. I had a (relatively) small private loan of $1,500 from my school, and the rest was all federal loans of interest rates between 3% and nearly 7%. I paid off the $1,500 private loan before the interest began to accumulate. After that big head start, I’ve been determined to pay off each of those loans. Some of the things I list below are the product of luck and/or privilege, which I’m cataloguing alongside the factors I’ve been able to control myself.
All of this is shared with the enormous caveat that I am not a finance expert, just someone for whom debt feels like a hideous imploding vacuum (think Arnold Schwarzenegger on the surface of Mars in Total Recall), so individual mileage may vary. In the spirit of taking stock for 2017, here’s how I’ve been able to do it:
1. I pay more than the minimum monthly payment whenever possible
Extra money always goes towards the loans with the highest interest rates. Now, I’m down to a single loan (at 3.15%).
2. I automate my payments.
I note the payment date in my planner, and I don’t ever have to worry about missing one. Also, some loan servicers (including mine, Nelnet) offer a (tiny) discount for automatic payments.
3. I partnered up.
Obviously, this is not available or desirable for everyone, but it’s a factor that can’t be ignored in my own life. Living with someone and sharing bills helps tremendously when you have to pay down debt.
4. I own my car outright.
No car payments (aside from insurance). If you’re looking to pay off debt, owning a clunker that you can coax by with the occasional repair may be better than making monthly car payments. With that said, I once had to replace a timing belt and a head gasket in the same twelve-month period, but fortunately, it’s been all quiet on the Honda front since then.
5. I have no credit card debt.
I’m debt-phobic (clearly) and I pay off the full balance every month, but I know that shit happens. I’ve been lucky. Ditto with medical debt; I have health insurance, but I live in the US, where healthcare costs are ridiculous and people have to crowdfund major surgeries. So yeah: I’ve been lucky.
6. I choose to live outside of major metropolitan areas.
If your neighborhood isn’t perfect, it’s okay — you won’t live there forever. It’s not just rent; groceries, gas, etc. all usually cost less outside of popular cities and trendy areas. Downsides: It’s harder to find jobs and the commute isn’t ideal. I used to drive over an hour each way to work, which, in hindsight, probably added up to the difference in rent. If you can reasonably commute, think about living someplace less trendy, if it cuts down on costs.
7. I pretend extra cash doesn’t exist.
I play a game called “bonuses, raises, and monetary gifts never happened.” Any unexpected cash, even if it’s only twenty dollars, goes straight into the loans, like it never existed. I can’t over-emphasize how valuable this trick is. If you have even just enough to get by, you can learn how not to miss that extra cash. Once my loans are paid, this game is going to build my savings.
8. I am hyper-selective about buying things.
Don’t get me wrong, occasionally I celebrate “Treat Yo’Self” day (hello, $14 Moleskine). I’m not a joyless martyr or anything. I figured out cheap ways to make myself happy. I love black clothes, as my goal in life is to sweep through hallways in a billowing black cloud, like Professor Snape. Instead of buying new items, I repair holes and keep everything looking fresh with Rit Dye. (Seriously, watch what Rit will do to a pair of faded black jeans. You will weep. I have probably spent about $200 total on workplace-appropriate clothes in the last few years, but it’s very hard to tell.) If I really love a book, I’ll buy it, but I mostly read library books. Using your local library also helps the branch get funding, which is often allocated based on usage.
My partner and I are getting married next year, and our wedding budget is likewise shoe-strung. We love each other and are way more into being married than having a wedding, so we’re keeping to a tight budget (though no judgement if having a great party is important to you!). I sincerely hope that 2017 is better than 2016 for everyone, and that these observations are helpful in some way — I for one am looking forward to writing “zero debt” in my planner this year.
Veronica Goin is a writer and editor living in The Hudson Valley. Her work has previously appeared on XOJane, Eco-Chick and her blog. She currently works as a marketing copywriter and is working on her first novel.
Image via Unsplash