Paying off debt? Give yourself a tangible reminder …
Prudence Debt-Free recently posted on their fourth anniversary of debt reduction, and the numbers are impressive: more than $150,000 of debt paid back in four years, which is about 60% of their total.
They’re doing the slay-little-dragons-first method, getting rid of three debts in that time: $8,600 in car debt, a consolidated $12,800 debt, and an $80,800 business debt. All that’s left is a bit over $100k in mortgage debt.
Paying off debt and celebrating
One thing they did after paying off the business debt (the second largest) is that they dropped $12,000 on long-overdue renovations and freshening up of their home. This included hardwood floors, new office equipment, new furniture, electrical work, and some other niceties.
This was on their radar for a bit, and they waited for two things: (a) to pay off their non-mortgage debt, and (b) save up to pay for the renovations with cash.
Paying off debt isn’t tangible, so add some in
Let’s say that your house has failing trusses. (These are the main sources of support for the roof.) Until the roof caves in under the next snowstorm, it’s difficult to see the difference between this roof and a roof with all of the trusses intact.
Fixing trusses isn’t a cheap venture. It can run well into five figures, and sometimes into six figures, depending on the size of the roof and the type of roof.
After spending the money to avoid having the roof cave in, you’ll have … a house that looks pretty much the same as it did before.
This is kind of how it is with paying off debt. You’ve repaid all of that money, and although you have a zero loan balance, that’s it. You look around, and nothing’s different. There’s nothing to show for it.
Now, there is of course the argument that you have the things you bought with debt. In fact, you had them when you took out the loan, and it’s the way things works that you don’t get anything when you pay it back.
Paying off debt is an accomplishment
But you’ll need to add in the celebration. (Certainly your bank won’t be the one celebrating. It’s a sad day for them)
That’s what Prudence Debt-Free did with their remodel. They had gotten rid of a lot of debt and had saved up for their celebration.
And that’s awesome.