Still Paying Down Debt? Maybe You'€™re Doing It Wrong
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My college graduation should have been one of the happiest days of my life. I’d worked hard to earn that accounting degree. Yet all I could think about was how defeated I felt about the $30,000 of student loans I owed, and how worried I was about how I’d pay them off.

For many people, that burden might not seem so bad—it’s less than the average student graduates with these days. But it still weighed on me.

The way I saw it, I had two choices: I could accept debt as a normal part of my life, or I could get down to business. I chose the latter.

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Throughout college, I’d worked as a nail tech doing manicures and pedicures—and I’d dreamt of quitting for four years. But once I really thought about how owing $30,000 could affect my life, my plans changed. Even though I quickly secured a staff accountant job, I continued working at the salon. It sucked, but that—along with a strict budget —allowed me to put every penny of my accountant salary toward debt.

I sacrificed family time, personal time and relationship time because I was working 70 to 80 hours a week. But you know what? It was worth it. Just 10 months later, I’d paid off all $30,000.

When friends and family heard about my success, they began asking for help creating a plan to pay off their debt, too. So I started blogging and coaching, and my business grew. Here’s what I’ve learned about what it takes to pay off debt—and the biggest mistakes people make along the way.

1. You’re waiting to make more money.

If you are waiting to start paying off debt until you earn more, you’re setting yourself up for disappointment. For starters, income isn’t always linear. Maybe your company will freeze pay bumps for a couple years, or you’ll take the leap into entrepreneurship and have to build your business, and profits, from scratch. Or perhaps you’ll decide one day to pursue a new career, and you’ll need to accept a lower-paying job to learn new skills.

On the other hand, your income might increase…at the same rate as your spending because you’ve never trained yourself to set aside a portion for debt repayment. In this case, more money just leads to more debt—and less freedom to live the life you really want.

2. You aren’t all in.

Plain and simple, if zeroing out your debt isn’t your priority, you won’t see results. Your intensity should be like a building is burning down, and your puppy is on the 8th floor. RUN, GO SAVE YOUR DOG! Fido’s life depends on your hustle. (I sure hope you love dogs.) You need to be so committed to your plan that you’re willing to do whatever it takes to reach your goal—bring your lunch to work, get a roommate, find a side gig, whatever—because that intensity gets you results.

Temporarily cutting out expensive habits that aren’t helping you make progress is key. That $20 happy hour tab or $10 movie ticket probably won’t make or break your plan, but you won’t get very far if you refuse to limit yourself or always cave when friends invite you out.

3. You don’t have a plan.

Once you commit to becoming debt-free, you need a strategic plan to get there. Though it sounds good in theory, haphazardly paying a little more toward each balance isn’t smart.

Instead, start by writing down every debt you owe, the balance and interest rate and your minimum payment. Then reorganize that list from highest interest rate to lowest, and start tackling the most expensive debt first. Not only will you save more money this way, but you’ll also find that focusing on just one debt at a time helps you stay more emotionally connected to your goal.

While you’re at it, set yourself up for success by automating all your monthly payments (debt and other bills). This ensures you avoid being hit with late fees or missing a payment altogether because your focus is diverted to paying off debt.

June 29, 2016

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