Momentum and Milestones in Debt Repayment

by Matt B

debt clock

When battling debt, reverting back to your foolish spending habits is always a risk.  Like a drug addict, you always know where to go to get more “stuff”, and when you have reached a milestone in your debt repayment, you may feel as if a reward is necessary.

  • Do Not Give in to Temptation.
  • You may well be excited about reaching whatever goal you have attained, and for good reason.  You are on your way to becoming debt free, and your hard work, sacrifice and determination should not go unnoticed.  Talk about your pride and excitement with friends or family.  Their kind and motivational words should fuel the fire to continue on to bigger and better goals.

    You may be tempted to buy yourself a gift or reward yourself in some other way.  There is nothing wrong with a reward, but remember, keep it cheap.  You do not want to set yourself back by buying something you can not afford.  You also do not want to let the cost of the celebration get out of hand.  If you are going out for dinner or treating yourself to some other type of celebration, make sure it is within your budget.

  • Remember How you Got Into Debt.
  • If you are like me, you are paying for foolish purchases which you could not afford in the first place.  Maybe you were just trying to get by because you were not making enough to survive.  Whatever the case, you are in debt because you spent outside your means.  Remember this feeling of hope and excitement on your milestone because it just gets bigger and better over time.

  • Remember How You Reached this Milestone.
  • Over the past 8 Months, I have increased my 401k contributions from 5% (my company match amount) to 10%.  I have not missed that 5%, and when my retirement account begins to grow at a breakneck pace, I will relish in the fact that I could take this small amount from my weekly pay and not miss it at all.  When my 401k reaches about $50,000 I will celebrate this milestone (on the cheap) and likely up my contribution amount once more.

    I recently reached my initial goal for my emergency fund ($1000).  I had hit this milestone once before, but an emergency set us back, and after 3 months of diligence, I’m back at my goal.  Although I would like nothing more than to celebrate with the purchase of a new TV, (mine broke a few months back-see here) I know that if I used our emergency money on such a purchase, we would be back to where we were months ago.  There is also a huge temptation to charge it.  This is absolutely out of the question, as it was maneuvers like this one that got me in debt in the first place.  It would not be a reward, but a setback.  I still have many goals to reach before I can comfortably make a purchase like this one.

  • Keep on Truckin’.
  • Use your momentum to catapult your debt reduction and savings to new heights.  Now that you know what a great feeling it is and what a sense of accomplishment you get for reaching goals, set the next bar even higher.  Have fun finding new ways to save money.  Constantly think of new ways to earn more, whether it be at work or on your own.  There is a seemingly never ending number of methods you can try.  If you fail at one, or are uncomfortable with it, just try another!

    When it comes to reaching goals and paying down debt, your milestones are important but the finished product is essential.  Celebrate huge once your debt is gone, until then, follow this advice and take it one step at a time.

    Photo Credit: wallyg


    Matt SF June 30, 2009 at 2:18 am

    Nice work on the 401k bump from 5% to 10%. That was probably the hardest thing for me to do back in my early 20s considering cash flow was much tighter back then.

    Joe July 8, 2009 at 4:20 am

    Absolutely spot on. Uncontrolled spending is the surest way towards a financial catastrophe.

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