Paying off student loan debt is an incredibly difficult task. For most borrowers it takes years and can cost well over $100,000.
While there are many financial concepts that are important to understand, eliminating student debt is more than just an accounting issue. Finding the motivation and willpower to pay off the loans is an essential component to any student loan repayment strategy. For some people, knowing they have the debt hanging over their heads is enough. Others need additional incentive. In order to be successful, this drive must last for years.
The good news is that the motivation aspect of debt elimination can be the fun part. The goal behind the motivation strategy is to provide an incentive to make extra payments without spending a ton of money “rewarding” yourself. Eliminating a loan is good, but if you reward yourself by buying a new car, you are going in the wrong direction.
The key is to find a way to make student loan payments exciting. If you look forward to putting a dent in your mountain of debt, it will crumble much faster.
Is buying a celebrity gossip magazine a guilty pleasure? Are fantasy sports more your style? Most everyone has interests that may not be expensive, but still might be time poorly spent. If you are trying to moderate one such activity, a great way to do it would be to save it as a reward for when you make extra payments towards your student loans. You get to enjoy your guilty-pleasure guilt free, and student loans get eliminated as fast as possible.
Give Yourself a Raise
We normally suggest that when student loan borrowers get raises, the extra income be used entirely for student loans. The idea is that you don’t miss money from a raise if you never got used to it.
Using this approach doesn’t mean that you never will see a raise until your debt is eliminated. Instead of getting that raise from day one, give yourself that raise when a loan is paid off.
Suppose you are making $200 a month payments towards one of your student loans. Because you earned a raise at work, you made many extra payments, and now that debt is eliminated. With the debt gone, you are now in a position to reward yourself that extra $200 per month. As loans get eliminated, you get a little more money to spend each month.
If this seems too generous, you can split the difference. When a loan gets paid off, half the monthly payment goes towards other loans and half the monthly payment stays with you. Going this route helps one success lead to the next one and provides lots of motivation along the way.
Start Planning Your Debt Freedom Party Now
Have you ever had to pass on an event with your friends because your student loan bills made it unaffordable?
Unfortunately, the reality of life with student debt is that it can limit your social life. Instead of getting bummed out by this reality, use it as motivation. Start planning the epic celebration now. Imagine for a second how great a party would be that was the result of 10 years of planning.
The debt freedom celebration doesn’t have to be a party either. It can be a vacation or a large purchase.
The idea behind this strategy is to make it feel like those extra payments are getting you closer to something great. Instead of seeing an extra $1,000 go to Sallie Mae, you are $1,000 closer to the beech vacation of your dreams. The spending is exactly the same, but the goal feels bigger than just getting to a $0 balance.
The exciting part about your debt freedom reward is that you will be able to afford something big. If you are paying $2,000 a month towards student loans, once those monthly payments disappear, you will have a huge chunk of change at your disposal.
Find Creative Ways To Track Progress
Some people can just log onto their account, see that the balance is lower, and channel the motivation the need to move forward. Others need something more tangible.
One of the most creative approaches we have see is the Door of Student Debt. A couple had post-its notes inside their closet door representing $1,000 of debt. As the debt was eliminated the notes came down. Certain special post-it notes had rewards like new phones or getting a dog. This approach works provides motivation to move forward and a reminder of how far you have already gone.
Get Others Involved
In some ways paying off student loans is like quitting smoking. It is a long and hard process, and most people recognize both the difficulty and the importance of the task. Paying down student loans and quitting smoking is also easier when you have the support and help of your friends and family.
Sharing your debt elimination goals helps make the process more real. If you know your parents will be calling to see how it is going, you are less likely to buy a new tv and more likely to put that money towards your debt. If your friends know about your mission, they might be more receptive to inexpensive entertainment options.
The more people that are involved in the process, the more fun the final celebration will be when your debt is eliminated.
Find The Motivation
At the end of the day, there is no one size fits all approach to getting motivated about paying off student loans. However, it is essential to find that motivation in order to stick to a long-term debt elimination strategy.
Student loan bills may feel like punishment for poor financial decisions, but if you can make the payments fun and exciting, you will be much more likely to succeed.
Most student loan work is tedious and stressful. Coming up with rewards to motivate yourself is more than just an important step… it is the fun part. Get started and good luck!