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A Real Girl’s Guide to Paying Down Debt

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You know that scene in Confessions of a Shopaholic where she’s talking to the mannequin and the mannequin is talking back, convincing her to buy that green scarf she doesn’t need? And she tries to buy it, but her credit cards are maxed out? So she goes to the hot dog stand to get cash back or something, and then runs into the guy she falls in love with and then—wait, hold on, there was a point here.

Ah, yes! The mannequin talking her into the green scarf. That’s my life. Except mannequins don’t talk to me, and I usually don’t need anyone’s help convincing me to buy things. There’s really very little willpower inhabiting my body on that subject. Going to college in Los Angeles, the land of the designer label, did nothing to help curb my pre-disposed shopping habit. And going to law school afterwards, where everything was paid for in loans that seemed more theoretical than concrete, did nothing to help form my view on real debt.

That is, until I graduated and had to start paying it all back.

Luckily for you, I have learned some things about the reality of paying off debt, whether it’s self inflicted (trip to the mall) or reasonably necessary (a degree on your resume).

Decide that it’s a priority for you

First things first—you must decide you actually care enough about taking care of your debt to begin paying it off. Yes, you could pay the minimums for years and “get away with it.” Sometimes it’s necessary when other bills or life expenses come up. In the long run, you’ll have spent so much more time and money avoiding your debt. It truly is better to buckle down, get it over with, and have one or two years of fewer nights out than forever be saddled with negative dollar signs flashing before your eyes. Of course, this is different for every person—it’ll take me more than two years to pay down my law school loans. But I can make a dent, and I can pay off my credit card debt, and not let the big number on the Sallie Mae statement discourage me. That’s the decision I made.

However, you are the only person who can decide this for you. You have to motivate yourself, remind yourself of the end goal, and be the one who picks yourself back up when you fall off the wagon and decide to charge those shoes, or those concert tickets, or that $40 dinner. The first step is deciding, here and now, that this is something you want to take care of for yourself and your future.

Find the right tools

No one expects you to sit there and crunch numbers on an abacus every morning to see if you can afford that latte. With the absurd amount of money management apps and websites these days, you don’t have to! I’ve found a few tools that work for me and keep me engaged in my own debt-paying-off process:

  • Mint: This tool is my favorite for money-management because it allows me to see when I’ve gone over budget. It imports all the accounts you choose (I have my checking, savings, credit card, and law school loan accounts imported) and allows you to create monthly budgets that show in big red lines when you go over budget. While this may not be the mentality that works for some, I love that it shows me when I’ve spent $250 on clothing in a month rather than the $90 I remember shelling out. It’s a great reality check for my actual costs versus my perceived costs and helps keep my wallet-reaching to a minimum for sudden splurges—most of the time.
  • ReadyForZero: I’ve recently started using this new tool. It’s similar to Mint in that you can import your accounts and watch your progress with infographics and charts. I like that it shows me a clear chart of my debt decreasing over time with my set monthly payments, and changes the chart to reflect any changes in payment that I make or when I put money back on my credit cards. Where Mint is for balancing all of your accounts, ReadyForZero really focuses on helping you pay down your debt and showing you how different decisions will change your progress.
  • Financial bloggers: This isn’t so much a tool as it is a mental reminder to stay on-task. I get more motivated when reading about how others overcame their debt, the methods they used to tackle it, and the things they said to remind themselves of the end-goal. It helps to hear that it’s hard for other people too so if I slip up once in a while I don’t feel like giving up entirely. My favorite is And Then We Saved.

Let yourself have some fun

Finally, you need to remember that this process could take some time, so you can’t give up fun forever. Give yourself some rewards once in a while! Debt reduction is, for lack of a better metaphor, like dieting. If you restrict yourself from everything, you will never keep it up. If you get a bonus at work, don’t feel like you have to give all of it to your credit card companies—take yourself for a pedicure or put aside $30 for drinks with your girlfriends. Make conscious decisions about when to spend money and when it isn’t worth it. You will come to appreciate these indulgences so much more while watching your debt decrease.

Paying off your debt isn’t easy, no matter the amount you have built up or the reasons behind it, but it is possible. Make the decision to do it, make a sustainable plan for how to do it, and you’ll be there in no time. Or in my case, 10-15 years. But hey, at least I have a plan!

How do you manage your money?

Ask Levo mentor and CFO Nicholas Flanders for his best money management tips.

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