The thing about the whole pay-off-my-grad-school-debt-in-a-year was driven by the twin feelings of panic (in the months before graduation, when it wasn’t at all clear that I was going to get any kind of job at all) and tremendous relief (when I semi-magically landed a one-year job that paid much better than I’d expected to be paid.) I knew, at the moment that I ran the numbers on my new salary vs. my debt, that it was possible to get it done and that I ought to do it in order to avoid future feelings of panic in case I couldn’t get a job the following year. I did a couple things right immediately in July 2013: I committed to the goal, and I signed up for mint.com so I could get a better handle on what was going on with my spending.
I also did some things wrong: I didn’t set a budget that assumed debt came first, to be followed by other urgent priorities (rent payments, buying a car, at least a tiny bit of savings), to be followed by discretionary spending. Instead, I just shopped for food and clothing and furniture and the car on what I felt was an as-needed basis and paid debt out of what was left at the end of the month. This meant that to make my goal, I ended up having to throw crazy percentages of my salary at the debt in the last five months, instead of smoothing out the expenses all along by strictly limiting the discretionary spending.
Now that I’m (mostly) out of debt, though, I’m hoping that I can turn the same wake-up I had in March, to be summarized as “pay yourself first,” and apply it to savings — that $500 a month I talked about in my last post. Because I want to do things, things that can’t necessarily be cash-flowed every month. A decent pair of boots (which I want like you wouldn’t believe), I could probably cash-flow. Retirement? Having a house I like and furniture I like? A car I find more comfortable and convenient than the one I was able to pay cash for last summer? The ability to travel when I want to? These things will require a long-term attitude towards savings that is like the attitude I developed about the debt towards the end: this is first. Everything else is negotiable.
Man, it would sure help if I made twice as much money, though 🙂