Half of My Six Figure Student Loans are Paid Off! At the beginning of the month I crossed the halfway mark of my journey paying off $130,000 of student loan debt. Milestones like this seem so monumental on the approach, but as soon as you […]
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The math you’ll see on debt repayment sites is usually straightforward. Starting balances, interest rates, months left until you’re debt free.
The advice is similar. Make a detailed budget, stick to the budget.
Real life is rarely so calculated.
Debt Snowball or Debt Avalanche?
A common piece of advice in the personal finance world is to focus on paying the debt with the smallest balance first (the debt snowball method). This strategy works well because it provides a boost of motivation as each debt is paid off. Getting out of debt is a challenge, no matter what strategy you use, so staying confident is important.
The main alternative is to focus on paying the debt with the highest interest rate first (the debt avalanche method). This strategy works well because it decreases the amount of interest that you’ll pay. Interest rates are particularly important when considering debts like payday loans and high interest credit cards.
What if You’re a Natural Rule-Breaker Like Me?
When I first started paying my debt down, I did neither. That’s right, I ignored mounds of expert advice and the entire field of mathematics to do something completely different.
I started paying the debt with the largest balance and the lowest interest rate.
Why would I do something so counter to everything I’d heard about paying off debt?
I hated that loan.
My highest balance when I first started was an $80,000 student line of credit at a bank. In Canada, some banks offer lines of credit to students in professional programs like law, medicine, and dentistry. I took one out to cover the rest of my education after I maxed out my $50,000 government loan. To me it represented all of my failures – my inability to find higher paying work in my field during university, the decade I made essentially zero dollars, my struggle with shopping addiction. At the time, I just needed it to be lower for the sake of my own mental health.
The Debt Bonfire Method
Paying off the debt that you hate the most is something I’ve come to refer to as the debt bonfire method. It taps into the power of your motivation, similar to the debt snowball method, but it recognizes that motivation can come from different places: the balance, the interest rate, the lender, the story behind the debt. Paying off debt isn’t just about the numbers – it’s about the connection between money and mind.
As I paid this line of credit balance down over the course of a year, something interesting happened. I started to hate it a little less every month. When it was about to drop below $60,000, my mindset shifted. I had some extra funds from a recent raise and instead of throwing them at my line of credit as usual, I made a larger payment on my government student loan instead.
Since then, I’ve been paying the minimum on my line of credit and the remainder on my lowest balance/highest interest rate debt, which fits with both the snowball and avalanche methods.
Sure, I paid a few hundred dollars more in interest than I would have using the avalanche or snowball methods, but you know what?
That’s nothing compared to the ten thousand dollars more in interest I would have paid if I gave up altogether and finished out my term making minimum payments.
I’m still here, I’m still motivated, and I’m still crushing this debt. Much of that has to do with my approach – I’ve focused on finishing this thing, not on cutting my lifestyle to nothing or working as many hours as possible. Just balance and intention.
The best way to pay off debt is the way that keeps YOU motivated. Without motivation, your ingenious plan will be worth nothing. Lowest balance or highest interest rate is a moot point if you quit after a few weeks.
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You would probably never guess this about me if we met today, but I used to be addicted to shopping.
I’m ashamed to admit it, but I’ve stayed up late for midnight makeup releases just to snag coveted products. I purchased limited edition items based completely off of promotional shots and descriptions with leaked swatches. I felt a rush as I refreshed the page and the new collection became available. I frantically added the items on my list to the cart and my hands shook slightly as I clicked through to check out. When I got the order confirmation email, I’d breathe a sigh of relief. My heart pounded. Then, I’d go back and continue to refresh the page as the most popular items sold out. I took pleasure in watching the ones I’d chosen become unavailable to others. These were powerful emotions, and they covered up even more powerful ones – sadness, anxiety, worthlessness, failure, loneliness.
The problem with placating your emotions by consumption is that it’s fleeting. The planning, purchasing, waiting, unboxing, and initial use only distract you for so long. A few days, sometimes. When that phase is over every unresolved emotion is still buried in your heart, joined by the guilt of spending money that you don’t have on products you probably won’t use.
Because another side effect of the temporal buzz is the excess and waste. A blush, for example, takes so little product per use that one will sometimes last through years of daily wear. Did I mention that cosmetics are consumables that expire? If you don’t use them up completely in a few years they can lose pigmentation, change texture, or worse – start to grow harmful bacteria. There was no way I could use up products at the same rate I was purchasing them.
That’s how you end up with drawers of barely used makeup, which has another side effect: choice paralysis. I had so many things and was so overwhelmed that I stopped wearing it. Cue further guilt, and the cycle continued.
I wasn’t only purchasing makeup either. Clothing, accessories, candles. I’d go off on a tangent and start collecting. When one area began to overwhelm me, I switched to something else.
It took me a while to face this reality, despite having all of the hallmarks of a shopping addiction:
- spending more than I could afford
- shopping as a way to regulate emotions
- feeling euphoric or anxious while shopping
- experiencing guilt after making purchases
- hiding products or receipts
- lying about the price of items
Advertising had infiltrated my already overburdened mind, convincing me that I was inadequate in every way. It offered me a sense of control when everything else felt out of my hands. Shopping was a way to both distract me from life and to distract others from me. Nobody asked me if something was wrong when I had on a full face of makeup.
My life didn’t improve with the influx of things, like the ads suggested it would. If anything I felt worse the more I bought. My things owned me. Ads owned me. YouTubers owned me.
It’s uncomfortable to revisit this part of my past, because I’m ashamed that I let my mental health deteriorate to the point that shopping could hijack my life so completely. I spent thousands of dollars over the few years it escalated. A drop in the bucket compared to rent or tuition, but still money that would have been better spent elsewhere.
Eventually, after much trial and error and many ‘no buy’ months, I was able to curb my impulses. I had to stop browsing makeup reviews and reading about anticipated new products. I had to stop watching YouTube videos. I had to see a therapist about unresolved issues in my life. I had to develop better coping skills. Now I have about 10 makeup items total, I shop for them maybe once a year, and I rarely wear it anyway because I’m working on loving myself in the body and face that I have.
But I still need to be careful. I don’t think I’ll ever be at the point where I can consider myself truly recovered. If you knew me both now and then you would swear we were completely different people, but there’s still something inside of me that feeds on insecurity.
When I do buy something I need or want, it reignites those feelings of anticipation and desire for task completion. Sometimes it sets off a chain reaction of buying other things. I’m more mindful now, and can usually check myself when I’ve been spending too much, but it’s a constant reminder that I once lost control. I try not to let the shame spiral set in, because I know that will only make it worse.
Sometimes I wonder if I would have asked for help earlier, had I viewed excessive shopping to be as problematic as other addictions. ‘Shopaholic’ has a frivolous, guilty pleasure feel to it. We engage in ‘retail therapy’ – as if it could ever possibly stand in for real therapy. Whenever I saw someone overspend or compulsively shop, it was framed as a joke or a feminine character flaw. I didn’t take my mental health seriously and I didn’t take my problematic relationship with shopping seriously, so I struggled on my own.
If you’re struggling right now, here is a list of resources to learn more. You’re not alone. I hope you find your way out.
Prudes, slut shamers, and someone-please-think-of-the-childrens, it may be time to avert your eyes! Or, you know, stay and embrace the idea that consensual, safe, and yes even pleasurable sex should be open to everyone in this modern age. What inspired me to talk about orgasms, […]
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This month was a little hectic with work travel, but I pushed through and made decent progress!
In May I bought tickets to Cirque du Soleil, 3 months of Spotify premium, and a dress to replace two that had worn out.
Including interest, I’ve paid $2,290.28 to my debt this month!
I’m getting so close to under $20,000 on my student loan!
What’s up in June?
Next month I’m getting a raise! You know what that means – more debt crushing. Stay tuned!