Can you guess what one of the most talked about topics is at the moment?
Student loan debt!
If you’ve been following my articles, this shouldn’t come as a surprise. We still don’t know the extent of the forgiveness that will be received nationally, but I’m here to help you make your own specific journey easier to stomach. Finances and paying off student loan debt is no walk in the park, so I hope you do not take this information that I’m giving you lightly. Tread these financial waters carefully. If you don’t know, I paid off my student loan debt in one year after I graduated with an engineering degree.
You may currently consume a lot of information. Even if that’s the case, I want you to be intentional about not falling victim to analysis paralysis. If you’re not familiar, this is when you consume a lot of information to the extent that you don’t do anything. I would hate for that to happen to you. Hate is a strong word, and I’ll emphasize again: I would hate for you to fall victim to analysis paralysis.
I need you to make that commitment today. That needs to be part of your plan. What’s your plan? If you fail to plan, you’re planning to fail. This is about the Art of War. You have to know your opponent. Your opponent is your financial journey or your student loan debt. Let me help you with a plan if you haven’t already.
Part of your plan is understanding that your financial success lies in your routine. What are you doing today? What are you doing tomorrow? What are you doing this month to ensure everything goes according to plan as it relates to your financial journey? Start with your routine. Furthermore, start with your “successful” debt free routine.
You have to see it before you see it so that you can seize it. I need you to be careful about your diction when it comes to creating your routine. That needs to be part of your plan. With your successful debt free routine, you need to gain clarity on what you’re doing as soon as you wake up in the morning. Are you praying and giving gratitude to God? Are you journaling? Visualize it and make it a reality. Additionally, make it an intention to read 10 pages of a good book daily.
The power of compound interest!
The power of compound interest needs to be addressed. When we talk about interest on your loans, they compound daily. When we look at your successful debt free routine, it works the same way. The little things that you do each day will compound effectively in your favor. You’re basically reaping the same benefits that the student loan lenders receive as your student loans compound daily.
Why can’t you enjoy the same benefit?
What’s included in your successful debt free routine is up to your discretion, but the main thing you need to understand is that you need to be consistent with it. You need to be disciplined with it. You need to be putting forth the greatest amount of effort that you can possibly put forth for the sake of your financial success.
The extent of your discipline to how effectively you can leverage your plan will determine how far your financial success goes. You have to do it when you do not feel like it.
Your plan doesn’t have to be in depth to the point you have to pinpoint every 2 minutes. Also, I’ll argue that can be a distracting factor to your effectiveness and can create an excuse not to be able to follow through with your plan. If you have too much to do, it’s very easy to think you won’t do everything you aspire to do. For the sake of that, I recommend making your successful debt free routine something simple that you can commit to following confidently.
When it comes to your plan, you also have to think about how you will actually pay off your debt. You can do your due diligence and research whether you would like to follow the debt snowball or debt avalanche methods for example.
The debt snowball method is when you pay minimum to all your balances, but you pay a huge amount of that to your smallest balance. For example, if you had three loans: $10,000, $5,000 and $500, you would pay the minimum balance to all three but tackle the $500 to build momentum.
On the other hand, the debt avalanche method is when you pay off the highest interest rated loans. This was the method I personally used, and it’s an effective way to pay off your debt quickly and save on paying interest. Whatever you decide to implement with your plan, be consistent and if you need to make modifications, do so with confidence. But at the end of the day, do something!