Why I Paid off $25k in Debt in One Day and Why You Need a Financial Goal (Even if it isn't Perfect) - Smart Money Seed

4/17/17

Why I Paid off $25k in Debt in One Day and Why You Need a Financial Goal (Even if it isn't Perfect)

The memories made during my 4 years at Ohio State will stay with me forever.
I made sure the $11k in student loans didn't stick around long.

Achieving my First Major Financial Goal

I was sitting on my parents' couch last August with a little over $30k in the bank and almost $25k in debt between my student loans and car. "I'll pay it all off soon," I had been telling my parents and Amanda (my girlfriend) for several months. I tried to come across as completely confident in my ability to take the leap and become debt free.

The truth was that I was extremely uncomfortable with the idea of spending $25k in one day. But I had run my numbers and projections about a hundred times and decided that paying off my debt was the best option for me. And guess what-- it might not be the best decision for you!

"Always remember you are unique, just like everyone else." --Alison Boulter

The upgrade from a 1994 Toyota Corolla to a car over 20 years
newer was enough to entice me to sign up for a $19k car loan.
Ultimately, I made my decision to break the shackles of debt based on my analysis of what became a perfect opportunity based on timing and my value system. I knew that I would never have another opportunity in my life to sock away so much cash in such a short period of time.

My parents were kind enough to allow me to live with them rent-free and relatively expense-free for a while after graduation. Although my living expenses were close to nothing, I was still paying essentially a rent payment (around $600) in debt payments each month. I wanted to capitalize on the time of low expense and make sure I was setting myself up for long-term financial success, and I decided that becoming debt free was the best way to do that.

Watching that $600 leave my bank account each month also just plain annoyed the shit out of me. I value the freedom to make decisions and to take advantage of opportunities, and I knew that monthly $600 punch in the gut would really restrict my freedom once I moved out on my own.

Most financial experts would say that I should've paid extra each month to minimize my interest payments, but I decided the minimal increase in interest was worth the freedom to take advantage of opportunities with a stockpile of cash in the bank. Some examples of those opportunities included several trips to NYC with my beautiful girlfriend Amanda, a trip with Christian and other friends to LA to watch some Cleveland Indians baseball, and a trip to Italy over Thanksgiving.

What's Your Why?

Just because I decided that living a debt free life is the best decision for me doesn't mean that it's necessarily the best decision for you. As long as you're not paying any horrible debts such as credit card debts or payday loans, small, manageable debt payments aren't the worst thing in the world.

Along with paying off my debt, I had considered putting that money towards a down payment on a house, dumping some of it in an IRA, or simply hanging on to the cash for a while. All 4 options would have been perfectly fine and extremely effective in moving me forward financially. The point was that I made a decision to work toward a specific goal, and that fueled me to success.

Consider all your stakeholders when determining your why. Mya much preferred
riding in the new car, so I knew I had to eliminate the risk of debt. Believe it or not, this
post is not sponsored by Cane's despite how much I enjoy their chicken fingers and sweet tea.

Success, financially or otherwise, is hard to come by without setting goals-- defining your why. Your why fuels you to success because it's exactly what YOU want, not what anybody else wants for you. My why for my 45-minute commute to live rent free and sacrificing time on the weekends to work and make a little extra cash started out as becoming debt free and has since changed to saving for things like travel, a house, and potential business investments.

Life is going to slap you in the face with constant temptation. It's hard to resist spending your money because there's so much awesome shit out there to buy! Your why is going to give you that extra push you need to resist that temptation and  align your day to day decisions with your ultimate goal of success. Your why doesn't have to be the absolute best answer that you could possibly make, but it does have to be something that you can stay motivated to stick behind. It doesn't have to be a perfect why. It just has to be YOUR why.

Make A Choice!

We believe in you. You're not a complete moron, and your why-- your goal-- is going to propel you towards financial success. You just have to have that clearly defined, work towards it every day, and you will be successful. It doesn't have to be the absolute perfect answer. Just pick something!

So, what's your why?


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