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The Importance of Budget Milestones

Debt from student loans can be overwhelming. Celebrating smaller milestones can provide the push you need to become debt-free.

Written By: Michael P. Lux, Esq.

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Paying off debt can sometimes seem like an impossible task, whether it’s student loans, credit card bills, or a mortgage. Reading about someone who paid off their credit cards in 6 months or student loans in a year can be inspiring. However, the reality is that it will take a lot longer to pay off our debts for many of us.

I’ve long felt that paying off any considerable amount of debt is a marathon and not a sprint. Because of this, I’ve found the key to paying off debt is to have a plan you can stick with for the long haul. It’s part of the reason I think budgeting for fun is critical. Rewarding yourself for reaching certain milestones can go a long way towards giving you the motivation you need to stay on track.

What is a milestone?

According to Merrian-Webster, a milestone is a “significant point in development.” When it comes to paying off debt, a milestone can be any point in the process that holds some significance to you. If you have many student loans, it could be getting that first loan paid off. It could be the day that you make your first payment that pays more principal than interest. It could be when you finally reach some round number, like $10,000. The key is to find a goal that motivates you to keep moving forward.

When you are planning your milestones, it is essential to pick attainable goals. While it would be great to pay off our student loans in 6 months, the reality for most of us is that such a goal is simply unfeasible. Look at your calendar and review your finances. In the next few months to a year, what is a realistic goal? Once you have found that realistic goal, you have found your milestone.

Why have a milestone?

A milestone is a shorter-term goal to aim for. Reaching it provides a sense of accomplishment and positive encouragement. If you only have negative associations with your debt repayment journey, your debt can eat away at you. The last thing you want is to feel like you’re in a perpetual state of failure. Set a reasonable goal and meet it. Get the momentum going in your favor.

How do I celebrate a milestone?

This is the part where you get to be creative. Just don’t get carried away. Paying off $1,000 in credit card debt does not justify the purchase of a new car.

Instead, come up with something that is a relatively inexpensive treat. When I was job hunting, I kept a bottle of champagne in the refrigerator, waiting for the day I got the job I was after. Seeing it every time I opened that fridge door motivated me. Being so close to my reward made me feel close to my goal.

My Favorite Approaches

The best debt tracking/milestone system I’ve ever seen is the door of student debt. This couple used a closet to track their progress and reward themselves. Their system was brilliant.

You can also incorporate your friends, family, or significant other in your milestone celebrations. For example, if you pay off a big chunk of debt, perhaps you can celebrate by dressing up and going on a nice date. Not only is it a fun reward for achieving your goal, but it’s a great way to get a loved one engaged in your goals and progress.

Readers:  What goals are you working towards?  How do you plan on celebrating once you achieve your next milestone?

About the Author

Student loan expert Michael Lux is a licensed attorney and the founder of The Student Loan Sherpa. He has helped borrowers navigate life with student debt since 2013.

Insight from Michael has been featured in US News & World Report, Forbes, The Wall Street Journal, and numerous other online and print publications.

Michael is available for speaking engagements and to respond to press inquiries.

4 thoughts on “The Importance of Budget Milestones”

  1. My milestone was paying off my student loans. But I did set mini-milestones to keep me motivated along the way. I didn’t do anything special to celebrate the mini-milestones other than getting more motivated since I was that much closer to paying them off.

  2. My family and I are 40 months in on repaying $109k worth of debt. we have knocked out $80k so far. Next month we reach a milestone we will pay off our 3rd credit card. Once we are completely done we plan on taking a vacation to celebrate our hard work and it will be paid for in cash!

  3. I like mini goals, although it has been time since I haven’t set monthly goal. I am going back to normal life next month and will start again. At the moment it is about running distances, 5k, 10k, 15k… I celebrated by getting awesome new running shoes after the 10k


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