If you’ve been following our debt payoff progress reports, you know that we are two months away from paying off approximately $100,000 in consumer and student loan debt. We did it by paying off our debts from smallest to largest and continuing to pay all that we could pay and not slacking off when a particular debt was eliminated.
You may also know that we have been saving around $300 per month for the past year for a nice vacation. So far we have saved up almost $4,000. This means we could have actually been debt free two months sooner. This was intentional.
We chose to include our priorities in our monthly budget and debt payoff plan and follow a conscious spending path.That means we don’t feel guilty about splurging on the things we enjoy because we are frugal in our spending on items or tasks for which we have no interest.
In addition to allowing you to keep your sanity by affording you a guilty pleasure or two, an intentional money plan allows you to set a more realistic date by which you can become debt free. It acknowledges that things like Christmas happen and you may not have enough money that month to pay the full extra payment on top of your minimums due.
Once you know how long it is going to take to get out of debt, add another month or two at the end to account for those unplanned expenses that always happen every six months.
Push Yourself, But Not Over a Cliff
If you are planning for ASAP, you are setting yourself up for disappointment.
Take some time to use a debt payoff calculator and realistically chart out what you can afford, and how long it will take you to get out of debt. If you have a ton of debt, you should be prepared for the fact that it’s going to take you a few years to dig yourself out.
Before you get too ahead of yourself and overestimate your ability to pay off debt, take a month or two to track your spending and get all your bills and lines of credit and all debts listed on the same page. If you would like a free copy of the Microsoft Word debt spreadsheet I use to track my spending and bills and payments due, just email me through the Contact page.
Leave yourself a bit of a buffer so you are not down to your last pennies in your checking account because a few unplanned expenses may just knock the wind out of your sails and back into the arms of debt normalcy.
Your buffer is your safety wire. Now you have no excuse to not push yourself to knock out as much debt as possible, to find the courage to do something bold like selling that jet ski you bought last year and used three times.