How to Make Progress on Your Loans With a Simple Game

If there’s one thing I can swear by on any money project I’ve ever taken up, it’s this: even the smallest task always feels overwhelming, and despite my best intention and highest motivation, I can’t find a way to start. And I don’t think that’s too strange either. After all, for almost any project you can think of to improve, or even just organize money matters, you’re faced with a hopelessly tangled knotty mess of questions and tasks that feels too overwhelming to even think about.

After many trials and failures, I stumbled on a method that has shown much promise and is helping me tackle tasks that I otherwise have left respectfully untouched for years. While it looks potentially shallow on the surface, it hides deep truths and immense psychological powers within its innards.

And it can work beautifully with student loans too.

What makes student loans hard

The problem with student loans is that there is a big group of related factors. You usually don’t know where to find any end of the string, and worse, what will happen if you just pull it without careful consideration. Where do you start and how do you proceed?

In the ideal world, the way to do it is to figure out the levers from the many available, which one has the best shot of taking the least amount of money out of your pocket over the course of time, and then to diligently follow that.

As we talked about before, doing this is not rocket science, but is a tedious and laborious math task with many possibilities for error. I’ve done it , and the task is not pretty. But it took me many weeks of intense study, effort, error-checking and testing to get it done, along with my prior background in banking – it’s just not realistic to expect the everyday professional, with a job to go to, and responsibilities to take care of, to be able to devote this kind of effort to getting it right.

But leaving it to the default is not the right course either.

I think a better option is to find one thing that has a clear and bright line to your end goal of completely eradicating your student debt, and then to focus entirely on improving this one number over a period of time. This way, your brain will always have a prize it’s chasing (necessary for persistence), but yet the hunt is persistent and focused on a clear result.

The numbers that matter

So what few things can you zoom in on, and how do you keep notching up more victories on this scorecard? Let’s dive right in and look at your many options.

There are five main things that will put a dent on the Big One, and focusing on any of these will yield fruitful results if you don’t have the time or the stomach for a full-fledged running-the-numbers exercise:

Debt service and credit factor score

By debt service I don’t mean a “motherhood and apple pie” type of assessment of debt service generally. If you’ve had any trouble or inconsistency in making student loan payments, then the best score to track will be a number relating to how well you’re servicing your debt. Pick from these two:

  1. How many on-time, full payments are you making? Shooting to score 100% on this number will make your credit much healthier, and reduce any risk of default or delinquency on your student loans. If you’ve monitored nothing on your loans so far, this is a great place to start. Why? Because if you’re already doing well, it will give you that glow of achievement and a running start to amp up your game to the next level. And if you’re not, everything else you CAN do on your student debt will yield you much better results once you bring your on-time payments game to the top. A big side-benefit to doing this is that you’ll continue to stay on track for any forgiveness-related options in the future -many weight regular payments very favorably.
  2. How well have you been tracking on procedural steps? Examples range from simple to big: updating your address with your servicers, all the way to making sure your annual certifications for certain repayment plans and forgiveness programs are being filed on time. How do you score this? Pull together a simple list of all the things you know you must do, along with due dates. Any task you finish on or before your due date gets you a 100% achievement rate.
Photo by Persnickety Prints

Debt burden score

When I say debt burden, I refer to a very specific number, it’s the full sum of your current obligations on your student loans. Anything that brings down the total amount you pay over the life will qualify as a win. For example, you could pay off extra towards principal every month, and that would count. In fact, even a refinance would count if it ends up with a lower rate and/or a lower term to pay off your loans, but let’s keep it simple here: focus only on the total outstanding amount you owe today. Anything you can do to reduce this number will qualify as a win.

Extra cash generation score:

You can set up a small, achievable target number for extra cash you generate every month. Of course, you don’t have to use that to pay off your student debt, although you could. The benefit and ambition is bigger here: it builds your muscle of looking ahead and planning for the future, both terrifically important to develop.

Of course, there are many ways to generate cash but broadly you’ll be doing one of two things:

  1. Reduce expenses:  For example, can you cut any digital subscriptions you no longer need or use (or even magazine , health club or other monthly drains where you are not using the benefit, and wouln’t miss it if it were gone). I saved a bunch of money simply cutting a landline and switching to a VOIP line and I’ve never noticed the difference – but even $70 every month adds up to a lot over time.
  2. Increase income: Yes, consider side hustles and look for new jobs – it’s very hard to get big regular pay increases in regular corporate jobs and easier to do it when you change jobs. But I am also talking about simpler and easier things here: are you taking advantage of all the benefits in your employment package? Even perks like low interest rates on loans you already have will generate extra cash.

And the number you’ll track for progress: just the bare $ you saved or earned each week or month. It’s not bad at all if you start at zero – in fact, that’s great because every win will be easy from zero. The only requirement is you try to match or better your last week’s score – if you don’t, you always have next week to try again.

Loan cost score

The way to reduce the cost of your loan is by reducing how fast interest is piling up on it every month. In other words, it’s the rate, not the actual dollar amount. Two ways to cut this:

  1. Sign up for auto-pay discounts. You’ll typically get a 0.25% interest break and that adds up
  2. Especially on private student loans, look for refinance opportunities at lower rates.

What is the number you track? You can either track the rates individually – a knock down on any one counts as a BIG win, because you’ll reap the benefits as long as you have the loan. The other option (and I really love this), is to track the total amount you pay in interest and fees every month. I did this for a couple of my loans. And when I translated the monthly cost into what I could have done with that money, it motivated me to get straight off my chair and do something about it right away (and I did).

Free money received score

Photo by Jules Marchioni

My favorite. I love free!

I think of two main sources when I think of free money: the first and easier source is employer benefits on student loan repayment. The second bigger but harder source is loan forgiveness.

Simply tracking the dollars you get in free money over months will help you not only stay on top of the process, but will likely heighten your alertness to opportunities you may not have noticed otherwise.

Of the five, the best way to get started would be with the easiest and/or the most powerful:

  • Your debt burden
  • Financial costs
  • Extra cash generated

In that order.

But regardless, I am thoroughly sure that whatever number you start tracking, it’ll act as a profound source of motivation and activation energy to get you to move forward. With that kind of consistency and intention, you’ll soon be making progress far greater than you’ve ever experienced!