Goal #4: Become Debt-Free in 11 Years, 4 Months
Goal #4 is to become debt-free.
Step 1. Set goals that motivate you.
Debt freedom is a huge motivation for me. I am only 25, but I have well-experienced the heartaches and misery that come with debt. I vow to never go into debt again.
Step 2. Be SMART about your goals.
This goal is SMART because it is:
- Specific: It clearly defines what I want to achieve: Debt Freedom!
- Measurable: Yep, it’s measureable. My goal is to get to $0 in debt.
- Attainable: It seems like such a long way away, but this is definitely an attainable goal.
- Relevant: Debt freedom is always relevant!
- Time Bound: I want to be debt-free in 11 years and 4 months on December 31, 2021.
Step 3. Write them down.
Goal #3 for me is:
To become completely debt-free by December 31, 2021. This includes my existing mortgage and several student loans, all of which total approximately $197,400.
Step 4. Develop smaller steps to achieve your overall goal.
I used an online “debt snowball” calculator to find out how long it will take for me to be debt-free. First off, here is my debt.
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Student Loan #1: $15,500 at 4.25% (Minimum Monthly Payment: $108.99)
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Student Loan #2: $15,200 at 5.29% ($189.26)
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Student Loan #3: $4,700 at 3.75% ($50.00)
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Mortgage: $162,000 at 5.50% ($1,250.00)
The online calculator informed me that I will be debt-free in just under 11 years, if I can manage to pay $400 above the minimum payments. Since I am currently in debt reduction mode, I am already sacrificing $400 consistently on a monthly basis. If I continue this trend, I will be on my way to debt freedom. Of course, if I am able to contribute more, I will become debt-free even faster.
Step 5. Stick with it!
Debt freedom in just over 11 years will be amazing! This is a goal I will stick with.
