The Importance of Milestones

Michael Lux Best Of, Blog, Student Loans 4 Comments

Paying off debt can seem like an impossible task sometimes.  It doesn’t matter whether it is student loans, credit card bills or a mortgage.  When you see a huge number on a bill and think about the many years it will take you to make it a zero, it is easy to lose hope or give up.

I’ve long felt that paying off any large amount of debt is a marathon and not a sprint.  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 for many of us it will take many years to pay off this debt.  Because of this reality, the key to paying of debt in the long run is to have a plan that you can stick with.  It’s part of the reason I think budgeting for fun is critical.

What is a Milestone?

When it comes to paying off debt, a milestone can be anything you want.  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 get under some round number, like $10,000.  The key is that it does not have to be everything paid off in full.

When you are planning your milestones, it is important to pick attainable goals.  Most of us would love to pay off our student loans in 6 months, but the reality is that such a goal is impossible.  Look at your calendar, 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 the positive encouragement you need to become debt free.  If you never have a success, your debt can eat at you.  The last thing you want is to be 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 you get to be creative, but 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 the refrigerator was motivating.  Being so close to my reward made me feel so close to my goal.

You can also incorporate your friends, family, or significant other in your milestone celebration.  If you pay off a huge chunk of debt, perhaps you can celebrate by dressing up and going on a nice debt.  Not only would it be a cool reward for achieving your goal, but it is a great way to get a loved one engaged in your goals an progress.

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

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Pauline @RFIndependence

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


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!


Ooh I love the idea of keeping a bottle of champagne ready for the good news!


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.