If you’ve spent any time at all wrestling with your finances, and especially your student loans, you know this for sure: It’s a complex, daunting and scary climb all the way to victory. The dangers are many, the falls are deep, and yet the prize is so breath-taking as to make it worth every painful step up.
What if I told you that your biggest challenge is not with deciphering convoluted repayment plans, wrangling hard-won forgiveness dollars on your loan, or even giving up on a lot of indulgences just to make those extra payments?
What if I told you that your worst enemy and biggest challenge is the one reading this sentence?
Whoa, hold up for a second.
I’m not about to join the self-flagellation club and add to your already overwhelming pile of self-doubt and guilt. What I am about to do, however, is to shine a light on the many unconscious behaviors many of us take refuge in, that effectively handicap us and impede us from achieving deeply desired victories.
In other words, I want to talk about self-sabotage. Specifically, I want to highlight five classic self-sabotaging behaviors many of us, especially women, are prone to. The moment we recognize the tell-tale signs of these behaviors, we’ve already started to slay the dragon: we are free to move in the direction of what we deeply desire, and to exercise our great powers of agency to work in our favor
The five signs of self-sabotage
We have met the enemy and he is us– Walt Kelly
Here, then, are the self-sabotaging behaviors that might be putting a big drag on your progress in eliminating your student loans: How many rouse the shock of self-recognition?
Leave your debt unseen:
Whether it is a manageable amount of debt you’re confident you’ll pay off soon, or that big, threatening hulk of a monster that grew fat and obese through graduate school years, the one thing you must do is to look it squarely in the eye. Even if you’re not obligated to make payments right now, there is a lot of risk to never letting your eyes settle on “the number”, and especially on how it’s growing and fattening over time.
Because there’s no natural trigger or pressure for students and borrowers to log in and look at that number, many are tempted to let it slide until they’re forced into a rude awakening when repayment arrives.
But taking your fear in your hands, and looking at that number, even if you have to hold on to the handrails and swallow really hard, could pay very rich dividends. Lenders are not nonprofits, nor are they your family. So if there is one root behavior that can lead to so many more virtuous offspring, then keeping a watchful eye on your balances over time must definitely be it.
Don’t look at account statements
Account statements are a lot like repulsively packaged gifts. It’s really hard to bring yourself to open them up, but terrific things could be hiding inside.
Granted, statements don’t typically or ever, come bearing gifts. But they bear the secret messages of the health and well-being of your loan. Thought your interest was waived when in school? Maybe not – just a look at your account statement will tell you all you need to know.
While the first few times may be unpalatable, frequency will bring a pleasurable fluency, and the sense of mastery will keep pushing you to learn more
Leave the repayment strategy develop on its own
At least in the case of federal loans, the moment your loan trips any of the repayment triggers, your notification will dutifully arrive on your doorstep to inform you of your shiny new obligation.
But the default option is not necessarily the one that’s best for you. While it’s easy to slide into the 10-year standard repayment plan, for example, you could be throwing hundreds if not thousands of dollars down the drain by not actively considering whether this plan will in fact put the most dollars in your pocket when all is said and done.
And it’s not just about repayment either – whether it’s letting the servicer decide how they’ll apply your extra payments, or how your employer will apply the student loan repayment perk, there are tons of dollars at stake that will just be thrown into the toilet if you don’t take an active part in shaping your loan strategy.
Don’t proactively look for better options
Most of the biggest dollar levers in your student loan pay-off journey need you to actively go out and look for them. Not only do you need to look, but in many cases, you have to climb uphill to make sure the big dollars land in your pocket.
Here’s a classic example: Let’s say you work for a hospital or nonprofit after graduate school. Loan forgiveness through the Public Service Loan Forgiveness (PSLF) program could hack huge dollars off your loan in as few as ten years, and without a tax hit to boot. I cannot think of a better jackpot than that in this area.
Yet, you won’t qualify unless you actively go and look for forgiveness options. Not only that, you’ve to take more proactive measures such as submit documentation of your intention to seek relief through the PSLF, pick a qualifying repayment plan (hint: the default repayment plan you’re put on won’t qualify), and keep up with the reams of paperwork you’re required to submit every year or more often.
Even with the ubiquitous refinance offers you see everywhere, the best offers aren’t the ones that seek you out aggressively and keep coaxing you to apply. In my experience, I’ve found the best terms to be offered by the quieter players, whether it was with my mortgage or with student loans.
Delegate the decision-making from sheer self-doubt
The biggest of them all, in my view, is delegating decisions by default to a salesperson, the default option, or something a friend did, merely because you don’t think you’re smart enough to make your own money decisions. “Just who do you think you are?”, whispers that nasty, critical voice in your head, and you yield, firm in the belief that that voice in your head knows better.
It may be true that you’re not the most well-qualified expert on financial matters. But one thing is true beyond dispute: you’re the world’s greatest and most well-qualified expert on YOU! And it’s also equally true that nobody cares about or is affected by your well-being as much as you are. So it follows naturally that even if you start with tiny, baby-size decisions, and even if you make a lot of mistakes, sheer attention and proximity of their impact to your well-being will ensure you learn from them, and you learn fast.
The only thing standing in your way is you.
If you practice stepping out of your own way, and developing a sense of play and lightness starting with small steps, you’ll be astonished at how quickly you’ll develop a facility and an intuition for the facts, decisions and big questions you need to pay attention to, to win the prize of freedom from your student loans.
Knowing this is not easy, I’ve pulled together five tools to jump-start your progress, and to help you accelerate to escape velocity faster. Here they are. Do with them what you will, but above all, do something!
Five paths to success
- Link to purpose: Your biggest source of fuel is to hook your little ship to the most powerful force in the universe: the power of purpose. What moves you deeply? What would you give everything to be able to do or be? Can you link all your financial tasks to this bigger purpose and values? You know that these are much larger and more important to you than “merely” your personal success. When inattention is linked to harming these interests, attention is caught faster, and the likelihood of active agency zooms much higher. Now go make it work for you.
- Package tasks in familiar terms: You’re no stranger to tackling hard and disagreeable tasks. But I’m willing to bet that in every other area of life you make these hard tasks manageable by packaging them in forms that make them easier to grasp and execute, for example, as projects. Use the same tricks with your student loans too. Packaging financial tasks in these familiar forms will make them easier to understand and do compared to presenting them in intimidating financial jargon and as large, risky strategies that put your financial future at stake. Change your view, and change your level of success!
- Create a baby-steps approach to overcome fear factor: Don’t be tempted to cast your finance tasks in all-or-nothing terms, no matter what ads and the fear-mongering businesses say. What will help you most is a way to test your way slowly into a path or relationship. Risk management is key. Construct an on-ramp to your student loan repayment highway that lets you progress at your own pace. Small baby steps are a terrific way to do this, and have the added advantage of building your valuable self-confidence along the way.
- Make information visceral: The MEGO effect (“My eyes glaze over”) is particularly strong with student loans, given how complex and intimidating the topic can be, with the added threat of big dollars hanging over your head. It’s very possible that you may not fully internalize the practical impact of numbers, say, a small difference in compounded annual returns over 10 or 20 years. The trick? Train yourself to translate big numbers into real-life impacts that hit you at a gut level. For example, the difference between two options is not $5,000, it’s your entire family’s gorgeous summer vacation you’ve been dreaming of all through the cold, dreary winter. It’s not “just” $700, it’s two whole months’ worth of payments on your high-utility car.
- Link to natural action triggers: All the plans in the world mean nothing without action. To make it a lot more likely that these actions will happen, link them to natural triggers that are second nature to you. For example, you want to accelerate payments? Round up and link it to your payday. For less frequent actions, such as revisiting refinance terms, integrate them with a natural reminder such as turning the clock back or forward, or with a memorable date or a seasonal holiday. This will be even more powerful provided you’ve simplified your actions as much as possible given the time and bandwidth constraints you face.
There you have it. Even if some of your behaviors strike dismay into your heart – know that you’re not alone or unique. You are all of us! It’s extremely difficult for humans to act “rationally” even some of the time, leave alone all of the time. But my taking a smart and realistic approach that acknowledges these foibles as normal, even likable, you’ll start to reclaim the tremendous power you were born with, to act on your own behalf, and to make your every act count!