Other than an aunt and uncle who recently paid off their mortgage, I don’t know anyone in real life who is completely debt free. Literally every person I can think of (I went through my Facebook friends list) has some combination of student loans, credit cards, car loans, personal loans, and/or a mortgage. Many of my friends have all of the above.
When all my friends and family carry debt of some kind, sometimes it’s hard for me to remember why I’m working so hard to become debt-free someday. Now that I’ve paid off my credit cards, all I have left is my car loan and student loans. I don’t have the income to throw huge chunks of money at either of those, so I’ve just kind of settled into a sense of complacency. I’m not drowning anymore, I’m not overdrawing my bank account, and I couldn’t tell you the last time I ran out of money between paydays. I’m doing pretty good, right?
Except I’m not. Because I’m still in debt.
Ever since I paid off my credit cards and changed jobs, I’ve gotten out of the habit of finding extra money to go toward debt payments. Some of this was expected – I no longer earn a salary, so my income fluctuates – but some of it is just me thinking it’s okay. I’ve become comfortable with the idea of having a car payment and student loans instead of staying angry at my debt. I’ve hesitated to calculate a debt-free date or any of the stuff most people do because it’s not bothering me as much as it should be.
Are you too comfortable with your debt?
Debt repayment is exhausting at times. For awhile, it’s easy to get excited because you’re knocking out the little piddly debts pretty quickly. But how do you stay motivated when the only remaining debts are so massive you can’t see the light at the end of the tunnel?
Here are a few signs you might be getting comfortable, as well as some ways to get your payoff mojo back:
1. You aren’t sure how much you owe anymore. This problem is pretty easily solved – recalculate all your debt totals. Make a list or spreadsheet with all your accounts, balances, interest rates, and due dates. Include the date you’ll pay it off if you keep making the minimum payment. Hang it up where you can see it every day and get pissed off about it.
2. You haven’t snowballed the money you were paying on previous debts. I’m totally guilty of this one. No more credit card debt means an extra $130 a month in my pocket. But have I rolled this onto my car payment? Nope. I said I was giving myself time to adjust to the job change, but it’s been almost 2 months and I’m still wasting money. I sat down last night, added up all my expenses again, and figured out how much I can throw toward my car payment. AND (the important part) I logged into online banking and changed my automatic payment amount, taking the money away before I can use it for anything else.
3. You’ve relaxed your savings standards. For 9 months, I didn’t set foot in a mall. I didn’t buy anything other than gas, groceries, and cigarettes (yes, I know that’s a poor choice). I was saving money like crazy and using it to wipe out debt. If you’ve seen my spending roundups over the past few months, though, I’ve spent a TON of money on random stuff. Money that could have paid off over 1/10th of my remaining auto loan balance. Did I need that stuff? Some of it, but not all. I could have lived without 85% of it. So now it’s time to reinstate the spending fast. No more shopping, no more boxes piled up on my front porch when I get home from work.
4. You’ve stopped tracking your income and expenses. My bank tracks my paychecks and expenses for me, so I haven’t stopped doing that. But I also have a little bit of blog income, which is funneled through Paypal and never sees my primary bank account. Have I made a plan for how I should use this money? Nope. I’ve used it for all kinds of unnecessary things, thinking in my mind it doesn’t count because it’s not part of my budget. When every dollar doesn’t have a purpose, those dollars are much easier to spend. Decide ahead of time what you’ll do with any extra money, whether it comes from a part-time job, a yard sale, or eBay sales. Then do it.
5. You give yourself passes. A lot of PF bloggers talk about rewarding yourself (within reason) when you reach a milestone. I’m a huge fan of that! But there’s a fine line between a reward and thinking you deserve something – the latter is what gets most of us into debt in the first place! If you’ve just paid off a debt or reached a milestone in your savings goals, pick ONE concrete reward, then it’s back to business.
Get Off the Debt Couch
If you’re all comfy with your minimum payments and debt levels, it’s time to get uncomfortable again. Remember what made you hate your debt in the first place. Think about how easily you could end up in the same situation you were in before. Make a plan and do something about it NOW. You’ll be much more comfortable when your debt is gone and the only room you need on the couch is for you.
Have you been relaxing on the debt couch lately? What have you done to motivate yourself? What do you still need to do?