Goals are a blessing and a curse.
They say that statistically there is correlation between writing down goals and achieving success. I don’t know who they are or what sort of study they did, but there is obviously some wisdom to formalizing plans for what you’d like to accomplish. Dexter and I planned to pay off our debt pretty quickly after college. However, until we set our goal to have them paid off by March of 2014, we paid our minimums each month and made no progress. Since setting the goal 16 months ago, we’ve paid off a quarter of our non-mortgage debt.
The curse manifests when you’re not making the progress you think you should be. To be out of debt by March of 2014, Dexter and I would have to pay off 2.4% of our debt each month. That has not been happening. I really like to look good in front of other people, and reporting that we’ve paid off less than 1% of our debt month after month doesn’t qualify as “looking good” in my book.
Speaking of what we’ve paid this month, since May 15, we’ve paid off 0.7% of our debt and we have 74.3% remaining.
Photo Credit: foxumon
Last week, I couldn’t fall asleep one night, so I got up and did what any normal person would do: I averaged interest rates, used debt snowball calculators, and created Excel worksheets. The information I found told me that on a fairly (but not incredibly) strict budget, getting out of debt should take about seven years. Not from when we started, but from now. I’m pretty good at math, so I realized that seven years is more than the three that we had been hoping for.
Needless to say, I was upset. It was a busy week, so I didn’t have time to sit down and talk to Dexter about what I’d learned. On Wednesday night, I was working on our summer budget, hoping (while doubting) that we’d be able to pay off Debt #3 this summer. I had been hoping and planning to do this for so long, that even though I knew we probably wouldn’t have enough, I almost wrote the check and took it to the bank, thinking that if I just did it I could escape the consequences. (This is the kind of risk that people like me who have never experimented with drugs and other risky behaviors do for a rush–we think about paying off debt irresponsibly fast.)
Thankfully my logic defeated my impulse, because we only had enough to pay off a quarter of what remains on the loan. If I had paid it, we would have been living off emergency savings, car replacement savings, Chrismas savings, and spare change from the top of the dryer all during August.
All this begs the question: Why did we think we could pay off the loan by March 2014 in the first place? Easy. We thought we’d make more money, spend less money, and let God help (but just a little bit).
Why are we making less money? Although it sounds terrible, we actually made a decision last month to start bringing in less money for a short period of time with the hope of increasing our income even more in the future. I’ll share more about that decision next week.
Why are we spending more money? That’s a harder question. We’re doing good things with our money, like giving to Compassion and Campus Crusade, buying local food, and using dairy from happy cows. We’re also doing a bad job keeping up with our cash system, which means more “I’m sure we have enough” purchases on the debit card. We’re eating out more. We’re getting comfortable, knowing that we make enough to pay the bills each month.
Why are we “letting” God help? We purposely chose a goal date to be debt free that was a bit of a challenge. We wanted God to be glorified through our journey to debt freedom, and that wasn’t going to happen if we approached the goal as if we could do it all ourselves.
What are we going to do about it?
The problem I see with the answers I’ve given above are with how comfortable we are parting with money. For the past several months, I haven’t been mad about our debt. I remember looking at a tax form for one of our student loans last year. I realized that we had spent one entire month of my income on interest for that one loan. That made me sick, but it also renewed my sense of urgency about getting out of debt.
Looking at our summer budget this week and realizing that we couldn’t pay of Debt #3 made me mad. When I analyzed our summer budget, I thought, “Who needs clothes when you have debt?!” and “Restaurants are for rich people!” I did, obviously, leave some room in the budget for those things, but I have a renewed desire to spend as little as possible in those areas. Hopefully this new drive will help us stick to the budget and really analyze what is a need and what is a want.