Everyone knows the old adage when it comes to paying off debt: Make extra payments, live below your means, and use some form of a debt strategy involving weather – debt snowball, debt avalanche, cash windfall – you get the point.
While all of the above is certainly great advice when it comes to paying off your student loans or any debt for that matter, there is something to be said when you find yourself in multiple six figures worth of debt.
Let’s just say it goes beyond making a couple of extra payments here and there.
At the end of the day financial strategies are necessary to pay off debt, but when you’re trying to climb out of a hold that seemingly has no end, believe it or not, most of the help you need is actually deals with staying mentally strong.
Here are seven mental tips that helped us pay off over $160,000 worth of student loan debt in the last 32 months.
1. Start With Your Why
Whenever you start something new, there will always be the euphoric feeling of excitement that keeps you going in the early stages.
Like the new diet or workout routine at the beginning of the New Year, excitement can help you get out the door, but it is often short-lived. As time progresses, the initial excitement we all experience settles, making sticking to something that much more challenging.
It is the exact reason why you see an extremely high percentage of New Year’s Resolutions over by February 1st. This is the exact reason why you must always “start with WHY.”
Knowing your why is vital to accomplishing bigger and better things.
For example, if your goal is to lose a few pounds at the start of the new year, if you don’t crystalize your WHY, chances are it will be easier to let that goal fall to the wayside.
Now, if you decide that losing weight is absolutely imperative because it is going to provide you with more energy to raise your kids or become a better spouse, well now you’re talking WHY power!
The same can be said for your financial goals too. Maybe you have a goal to retire early, pay for your children’s college, or bring a spouse home. Those are all great whys that will help you stay the course!
2. Adopt A No Excuse Mentality
No matter what you set out to accomplish, adopting a no excuse mentality is essential – especially when it comes to your finances.
Whether you have $50,000 worth of debt or $300,000 like we did when we started our financial journey, having a can-do attitude makes all the difference. Truth be told, most of the time excuses simply EXCUSE us from doing something.
It is easier to say “There is no chance in accomplishing my goals,” or “I don’t have what it takes,” than actually seeing what can happen. Excuses justify inaction, however, to get ahead financially, the key is taking consistent daily action.
If you happen to be the person who uses excuses more than you probably should, flip what you say to yourself. Instead of saying, “I can’t do this because,” instead say, “This may be challenging but I am going to figure it out!”
What you say to yourself is important. While not everything is going to be peachy all the time, if you adopt a no excuse mentality, you will be surprised at what you can actually accomplish.
Side Note: You may run into people periodically who say what you can’t accomplish, instead of speaking positively about your goals. We had our fair share of people who laughed when we said we would pay off our student loans in under 5 years. However, do your best to simply avoid these people/conversations and see #4 below!
3. Learn To Say No
Along with not comparing yourself to others (#4), learning to say no might be the most challenging item on this list of mental tips to helping you crush your financial goals.
Speaking from experience, when you have a goal to pay off all of your debt or create a six-figure income working from home like Kelan and Brittany, you’re going to have to learn to say no from time to time.
Anything worth having takes commitment and sacrifice, meaning if you have huge financial goals, prepare yourself to say no to certain things along the way.
In order for us to pay down $160,000 worth of student loans in under three years, we started saying no to:
- Weddings that were a certain distance
- Overnight bachelor and bachelorette parties
- New cars
- Every family event at restaurants
- A large wedding
- Our honeymoon
- Kids (Temporarily, and by far the hardest)
While some of this was temporary, some of this was actually a blessing in disguise. Case in point, one wedding we missed evidently ended up being a total show, so we’re actually glad we politely declined!
4. Don’t Compare Yourself
Easier said than done in this day and age, but learn to stop comparing yourself.
Not only will avoiding comparison help you accomplish your financial goals quicker, be it paying off debt or saving more money, but chances are you will be happier in the process too.
Most unhappiness in the digital age stems from comparison. Unfettered social media use, constant engagement, and the “fear of missing out” can make it hard to stay steady when approaching your financial goals.
Some quick tips to help you stop comparing yourself include:
- Go back to #1 – start with why.
- Delete 1 social media app permanently
- Have 1-2 social media free weekends per month
- Avoid social situations where comparison run’s rampant
Lastly, always remember not to try and keep up the Joneses, because remember, the Joneses financed everything!
5. Reward Yourself
Be sure to have rewards for yourself when you have huge financial goals.
Having short term rewards during your financial journey will keep you fresh and motivated to stay the course. Similar to how skyscrapers have landings every 10 or so steps, set small goals and have rewards every time you reach a goal or milestone.
Some ideas for rewards include:
- Pay off X amount of debt = Night out for dinner.
- Increase side hustle earnings by X% = Movie night.
- Increase net worth or pay off a certain amount of debt in one year = short getaway.
Although the list may go on and you can certainly get more creative with your rewards, be sure to have rewards for when you hit your short term goals, not just because.
For example, after breaking out of the six figures worth of debt, we rewarded ourselves with a short anniversary trip. This was after saying no to trips for over three years!
6. Start Small, End Big
If you were tasked with eating a four-pound cheeseburger, how would you start?
One bite at a time of course!
All corny analogies aside, your finances are no different. When you start any new goal, be sure to always start small and end big. The reason why over 8 in 10 New Year Resolutioners fail by February 1st is that they start big, way too big actually, and end small by quitting.
After not eating healthy for years they decide they will eat healthy for every meal, instead of just slowly incorporating 4-5 health-conscious meals per week. So if you haven’t used a budget or maybe you’re just starting to take your finances seriously, my suggestion is to start small, then incorporate more as you go.
Let’s say your goal is to pay off $100,000 worth of debt. A logical sequence would look something like this:
- Start living on a budget
- Cut high spending areas by 10%, then revisit monthly with a goal of reducing more each month.
- Pay off high-interest, low balance debt for quick wins
- Adjust 1-2 areas of your lifestyle (Gym, cable, eating out, entertainment, travel)
- Start finding ways to make more money
- Using all the extra money you have created, start contributing 10% towards debt, working to a goal of 25%
Now, it is vital to understand that prior to moving from one step to the next, you would want to first get used to the lifestyle adjustments. Just like eating healthy, you would greatly diminish your chances of accomplishing your goal if you tried to do all of the above all at the same time.
Remember to start small!
7. Dream Big
Last but not least, you need to dream big.
While you may want to start small and end big, dreaming big can start right now! Furthermore, dreaming big might seem similar to #1, (starting with why) however, the two have their differences.
Most whys are logical and sound something like this, “I need to be debt-free so I can stay at home with my kids.” However, a dream can be huge, like the impact or legacy you want to leave behind. A huge dream takes the spotlight off you and puts it on something else, thus you’re able to go crush your goals with fewer feelings of pressure.
Consider making a dream board with photos that stretch you and place it somewhere you can see daily! If you ever have a not so pleasant day or you fall off the proverbial wagon some, look over at your board to remind you of what you’re going to accomplish!
My Take On Mental Tips To Help You Pay Off Debt
When it is all said and done, there is plenty said and often times not a lot done. In some regards, the wide variety of financial advice can become somewhat overwhelming at times.
The simplest way to get ahead financially and pay off your debt is to just start somewhere. As you progress, be sure to implement some of these mental tips to help you stay consistent and push through during difficult times.
No matter what you set out to accomplish if you know why you’re doing it and you learn to take action, you will get there before you know it!!!
Josh is a personal finance blogger at Money Life Wax where he helps readers with paying off their debt (student loans in particular) and saving money so they can live a great life on their terms. He started his blog after paying off over $200,000 worth of student loan and auto debt over the last four years.