A Person Has to Have Things to Celebrate Sometimes

Business, Lifestyle
Reading Time: 2 minutes

With 45 million Americans owing an average of roughly $28,000 in student loans, the stress of school debt has taken on a role in defining the nation’s psyche. A joint study by LendEDU and Laurel Road (an online lending and banking corporation) found that 74 percent of those surveyed feel stress about their student loan on a daily basis, and 55 percent feel self-conscious or embarrassed by it. These stress indicators show a dangerous level of anxiety concerning student debt. Ameritech Financial, document preparation company that assists borrowers with federal repayment plan applications, recommends compartmentalizing the problem so that rather than feeling the negative emotions caused by the total loan balance, a person can create small goals that can be celebrated upon completion.

“A person has to have things to celebrate sometimes. And it’s tough to look at your loan balance and see anything to be happy about. So we suggest breaking the big goal of living debt free down to mini goals to be achieved along the way,” said Ameritech Financial executive vice president Tom Knickerbocker.

To this end, a person may focus on 10 percent of his or her debt at a time, so that when a 10 percent chunk is paid off, a celebration is due. Or borrowers might buy themselves a small but meaningful reward for every thousand dollars paid off. If a person can pay an extra hundred dollars on a payment one month, make a note of that accomplishment. Borrowers can choose a prize that they will buy themselves after a predetermined number of months making an extra payment. The trick is to create goals that are attainable but will carry a sense of achievement when reached.

However, such goals may only be attainable by those who are able to pay extra. Borrowers who struggle to make their minimum payments may need other goals to celebrate. Such borrowers should consider applying for federal programs that may lower the monthly payment that is causing some of the day-to-day financial issues that contribute to the high-stress levels concerning student debt. By doing so, stress may slowly wash away while cash flow increases. As cash flow increases, small celebrations to mark important milestones should periodically come due.

There are government programs designed to help borrowers lower their monthly payments, and Knickerbocker believes they are a key to solving the stress levels associated with student debt. “They’re called income-driven repayment plans,” he explained, “and they will allow a person to set a monthly loan payment intended to be more affordable because it’s based on their income and family size. If your main short-term goal concerning your loan is to feel less stress, an IDR may be a great option, and in the long term, it can help you achieve total loan forgiveness in 20 to 25 years of remaining in the IDR plan.”

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