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When my boss revealed how shitty my raise was going to be, it didn’t bother me that much because I already had a plan to give myself a $1,800 per month raise.

You may be wondering how I planned to do this. No, I don’t have backdoor access to the payroll accounting program, just a plan to get out of debt.

When you are in debt, you don’t control your paycheck. I can’t tell you how many times on payday that almost all of the money was immediately transferred to my creditors. My real paycheck might as well have been $100.

If you’ve been following our debt payoff progress posts, you know that we are 3 payments away from being debt free, minus the house. This means we will have paid off about $100,000 in car loans, student loans, and credit card bills.

We were able to do this by following my 10 Rules to Eliminate Debt and Change Your Life.

These rules allowed us to pay off our debts from smallest to largest, building up a debt snowball payment that grew in size after each bill was paid off. It is now about $1,800 per month. I like to use a snowball debt calculator to see these numbers clearly.

So when the remaining 3 payments are made on my student loan, we will suddenly have a large amount of money available – call it a windfall if you’d like…

I’m calling it a raise.

To me, I think it will be more satisfying than getting a raise at your job. It’s something we have done totally on our own, without relying on others. Granted, it is a little like patting yourself on the back for fixing something you broke, but it sounds more “bootstrappy” paying off your student loans as opposed to having your parents pay for it.

Paying off debt and reclaiming your paycheck only requires one person – you. At work you can do a good job and work your butt off, but ultimately, getting a raise will depend on your boss and whether they have money, whether they paid their bills, used debt consolidation etc…

It all comes down to whether you think about your household as a business. I know I do. My wife and I work together on setting our spending and our priorities. I view myself as the CFO, helping to set our broad strategy, and my wife Katie is the CEO. She makes the plan happen.

Our family business is about to make a transition, much like a company that has taken on debt early to grow. It’s now time to wipe that debt from our ledger books and start moving some real money into the cash on hand category.

Much like a business, you must have a goal. But what makes a family different than a business is that I feel you should start with the end in mind. Like Rule 10, the Goal of Work is Retirement, our family business exists already knowing how it will go out of business (retirement).

Most small business owners don’t think about the day they will stop working. They need to fill their minds with thoughts of exponential growth and success, perhaps getting sold to a larger competitor one day, or maybe even buying up all the smaller competitors and becoming top dog.

The difference is optimism vs realism.

Debt Payoff Is Like Getting A Raise

So back to my original point, that debt payoff is like giving yourself a raise.

Suddenly you have more money that you control. Once you’ve gotten to the point where you are debt free minus the house, all your spending is YOUR choice. You don’t need to rush to pay off your house now because it is part of a longer-term wealth building strategy.

Now you can start putting money in a Roth IRA, or 401k, because if you’ve been following the 10 Rules, you are waiting to invest until debt is paid off.

I’m really looking forward to getting that big raise in a few months. I plan to hoard every penny of it in an emergency fund as part of my Job Loss Emergency Plan, as I plan to make a big career change starting in 2013.

I don’t know what that new direction is yet, but I know it must happen.

READERS: Have you ever given yourself a raise by paying off debt?

On a side note I recently saved some money on car insurance and have started creating a list to share that I will continue to expand to help some of our visitors save also.