Updated on 09.18.07


Trent Hamm

I often talk about the mental challenges of convincing yourself to turn your financial life around, things like looking at what’s really important to you and facing addictions to buying stuff.

However, I’ve discovered that other mental challenges pop up when you get on the right track, and the challenge that I’m facing right now is patience.

When I first started turning my financial life around, I had over $10K in credit card debt, a truck with almost three years of payment left on it, almost $30K in student loan debt, and I was living in an apartment.

Flash forward fifteen months. The credit card debt is gone and the truck is paid off. The student loans are down to about $25K and they’re my big focus right now. However, I also bought a house in that interim, saddling myself with another big debt load, about $160K.

Here’s the problem: I’m making good progress on my debts, but I want them gone now. Month over month progress is nice, but I am looking forward to debt freedom with such intensity that I can barely stand it, especially with regards to the student loans.

The debts, even the mortgage debt, are a constant reminder of how I made bad choices in the past. I made some flaky choices while in college and it resulted in far more debt that I would have had if I had my head on straight. After college, I ran amok with spending and dug myself a deep hole that I’m still filling in. If I had not made poor choices then, I would have a much smaller mortgage now, so even the size of the mortgage serves as a reminder of my bad choices.

So how do I handle this mental block?

First, I try to take great solace in the progress I’m making. I keep careful track of my total debts, total assets, and net worth, and I feel very good when the net worth goes up and the debts go down – right now, I’m not nearly as concerned about growing the assets, because I know that when the debts are gone, the assets will skyrocket.

Second, I use “found money” to contribute to that debt reduction goal. If I discover any resources that I’ve forgotten about, like my recent discovery of a few savings bonds, I apply that resource directly towards debt repayment by making an extra large payment the next time around.

Third, I set target dates for repaying each debt and revel when I come in ahead of schedule. For example, one of my two student loan debts should go poof in February of next year at the pace I’ve been working at. However, I think it might go away in January and possibly even in December. That’s cause to feel really good about my financial choices.

Fourth, I utilize the youth of my children. My children are both very young (a boy just under two and a girl who’s still under a month) and I realize that many of my big goals are tied to them when they’re older. For example, we want to build a house when the boy is fifteen, and then shortly after that they’ll go to college. Another plus: in about five years, they’ll both be in school, freeing up child care costs to tackle the debt monster. Every time I see my son toddling around, I realize that I do have time before my goals get close.

Remember, all you need is just a little patience.

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  1. Kathy says:

    Yes, but NOT getting it NOW is actually the best thing for you.
    The prolonged misery and pain are going to teach you something you will not readily forget.

  2. kate says:

    The size of your mortgage debt is far less than what many homeowners carry today. Additionally, you should not be discouraged by the size of your mortgage. Remember that the mortgage interest you pay (which is the bulk of your monthly payment in the early years) is tax-deductible, unlike interest on auto loans or credit card debts. This is why many financial gurus advise not paying off your mortgage early, even if you have the means to do so. While you are young and raising a family, the mortgage interest deduction can really work in your favor.

  3. DJ says:

    You can’t change the past.

    Don’t let it change how you feel about your accomplishments now.

  4. Amanda B. says:

    Amen Brother! I don’t know if anyone remembers, but my husband and I were supposed to get a big re-enlistment bonus (covered in a post by Trent), but that fell through due to family issues. Now we are looking at going from instantly debt free to slowly filling in the hole we dug in our early years of marriage.
    I had an epiphany a few days ago. I was thinking of the bonus we lost and how nice it would have been, or winning the lottery, or my parents bailing us out (because they could). And then it hit me. If that happened, we probably wouldn’t be strong enough to resist the temptation of digging our hole again. So instead we are saving as much money as we can. We are stopping the leaks. We are also going through and cleaning our house of all the junk we have. It is bitter medicine to GIVE away our unused stem wear that we put on a credit card (that is still not paid off), but it is medicine none the less. If trudging through debt repair inoculates us from future poor decisions, then bring it on. When you start to lose hope and strength, like I often do, just remember that this process fortifies you and keep on truckin’.

  5. Barry says:

    I’m kind of the same way, Trent. I’ve got some debt that I’m hitting HARD lately, working to get it paid off very early… and it can’t happen soon enough! I’ve put a ton of time and energy into coming up with “the plan” as my wife calls it… and I feel very good about it. But now I’m ready for it to just “happen”, but of course it takes time. So, I try to focus each day on finding and doing at least one thing to either reduce costs, or make an extra buck. That kind of gives me a new challenge each day to spend my time on, and also helps “the plan” along in the process!

  6. Mariette says:

    I’m in the same boat as Kathy and Amanda. It’s painful, but that kind of pain is what makes you change your habit patterns around money. And if you are struggling with debt reduction (like most of us on this site are) you need to change those patterns. It’s hard to be greatful for the lesson though, I try to be, I figure it’s better than beating myself up over my bad choices, which I also do and is unproductive.

  7. Andy says:

    I’m curious, as you have less and less debt, does your net worth grow at a faster and faster percentage each month?

  8. Beth says:

    I’m also finding that I’m impatient. It leaves me wanting to throw all money possible at my debt, rather than be smart about how I’m using my money.

    I paid off my credit card last month (woop!), and I have 8 more months of car payments, but after that I’ll have about 11 years left on my student loans. I’m tempted to take the car payment money and throw it at the student loans, which would cut the repayment down to about 5 years – but at the cost of getting cash in the bank, and since I’m single and don’t own a home, having cash in the bank toward that goal is more important than getting rid of the student loan debt.. but it’s hard to keep that in mind.

    Trent, you should be grateful you’re a two-income family. Just think how much longer it would’ve taken you to get this far on only one income!

  9. Trent Hamm Trent says:

    Andy, the percentage stays roughly the same but the dollar amount goes up a bit each month. Think of it this way: if I have $80K net worth and it goes up to $100K, that’s a 25% growth, but to get a 25% growth again, it has to go from $100K to $125K.

  10. trb says:

    I have to tell myself, each night before I can sleep, “Years, not months.” This is a hard thing to hear and face, and it sucks to know that I’m in this situation for the long haul. Most of my other dreams (buying land, building a new house) are on hold until the debt monster goes away, and it eats at me. Worse, no more little victories for me, just the long slow slog of $40K in student loans, disappearing by the spoonful.

    Did I really make some bad choices along the way? I guess so. Can I keep from making them again? I hope so.

  11. Anna says:

    I think I’ll probably have to come back to this post over and over in the coming months/years. I just had my own finantial meltdown about 6 weeks ago, and I’m not a patient person. I’ve made some major changes in the way I think about money (and what I do with it, of course) and I’ve seen some good results in the relatively small amount of time I’ve been doing this, but I know I’m only at the beginning of a long road. I have to keep telling myself that this is going to take time, but that it’s really going to be worth it when I’m finally debt free. This post helped a lot. Thanks Trent.

  12. Jim Lippard says:

    Andy: If you have a lot of debt compared to assets, you’ll see slow percentage growth in your net worth as you start to pay down debt, it will get faster, and then it will slow again as your debt becomes small with respect to your assets. For example, if you have $25,000 in debt and $5,000 assets, and you pay down the debt at $1000/mo, in the first three months you pay the debt down 4%, then 4.2%, then 4.3%, while your net worth goes from -$20,000 to -$19,000 to $-18,000. As your debt decreases, it takes a smaller amount of debt payment to make the same percentage reduction.

    On the asset side, it’s the opposite situation–as your assets increase, it takes a larger absolute amount of money to make the same percentage change. And that’s also true of your net worth–the larger it grows, the more money in absolute terms it takes to make the same percentage increase, so you’ll see the rate of percentage increase in your net worth slow as the overall amount grows.

    Once your debt is small relative to your assets, if your assets are mostly in stocks and mutual funds, you’ll get to a point where daily market changes in asset value will swamp the changes in your debt–market changes will play a bigger role in net worth changes than your debt payments.

    As it grows, you’ll get to a point where monthly market changes in assets are larger than your monthly contributions, and, very pleasantly, to a point where income from your assets is larger than your monthly contributions–and even larger than your other income (the “crossover point” that Trent has written about).

  13. Mitch says:

    I’m puzzled as to why you would want to be building a new house when your kids are 15 and 13, if it really is a goal tied to their ages–they’ll be so busy with school and friends and so forth, and it’ll just be havoc in their lives. I would say do it when they’re in grade school and have time to enjoy the “new” place and get to feel like it’s “home” or wait till they’re old enough to be on their own.

  14. Andy says:

    Thanks, Trent. Thats an interesting observation. I just started calculating my next worth three weeks ago, so I’m excited to see how it pans out this first month.

  15. Natasha NZ says:

    Long time follower, first time commenter. This really struck a chord with me. My partner is debt-free at the moment and saving a house deposit, while I’m paying off debt incurred a few years ago when I was very ill – I’m finally in a position to do so. The debt is going down, and fairly quickly, but I just want it to all be gone so that I can start contributing to our house deposit too!

  16. Rachel says:

    There is light at the end of the tunnel. My husband and I purchased our home in 2000. We paid it off last October. Just keep plugging away. I wish you all the best.

  17. Brent says:

    While I don’t spend a lot of time worrying about net worth. I do share the feeling of impatience. My main focus is looking at our trends in monthly spending, and identifying the areas where we are not using our resources wisely.

    By doing that, and taking our excess and applying it to Investments or our small amount of debt, the net worth grows on it’s own.

    I see the problem where a $500 decision in the scope of a month is a big difference, but rationalizing that decision on its impact to net worth is not as affective in deterring bad financial decisions.

  18. James says:

    That bit about your children – I would suggest you look at that from a different angle. Your children are at a precious age, and one that moves entirely too quickly. In the blink of an eye they’ll be in college, and you’ll be heartsick at how much you miss the toddler stuff.

    In that same blink of an eye, you’ll be out of debt. Think of it that way, and use it as a method to focus on being in the present (safe in the knowledge that the debt will be gone soon enough) and fully enjoy your time with the kiddos.

  19. Liz says:

    Very nice post. I look at it a little bit differently–for me financial goals are fundamentally unsatisfying. I was really proud of myself for paying off my student loans early, and thought it was going to feel like a big landmark, but it didn’t. Even going to the Sallie Mae website and seeing the 0 didn’t do anything for me. Seeing our bank or IRA #’s grow doesn’t do much for me either because it is a kind of hypothetical money. We can’t use it : ) The realest that it gets is in knowing that if we get unexpected money, we can use it to treat ourselves if we want to because we have an emergency fund already.

    But this is what I have to say about patience, the way you write about it. I’ve learned to be glad that I don’t have all the money or income that I might have dreamed of. Because it forces me to make choices, and not to waste what I have. Even if your bank account gets really big, you won’t want to touch the money. So patience here is a misnomer. The money is there, you are living your life. At least you know that you are on track, and you can sleep easily now without big bills to stress you out. I love your blog!

  20. Art Dinkin says:

    Trent, don’t kid yourself. Children do not become less expensive with age. When daycare costs decrease there are other expenses (like activities, increased eating, clothes, toys etc.) which will fill in the void.

  21. tYLER VS says:

    Patience is the virtue I can’t wait to have…

  22. Lou says:

    One word of advice: don’t assume your child care costs go down that significantly when the kids are in school. Piano lessons, dance lessons, lacrosse equipment, activity fees for school sponsored events, the list goes on and on. While you won’t have that hefty monthly daycare expense, which is admittedly quite high for infants, the money is still being spent.

  23. Lisa says:

    What helps me is the big bright bolded Excel cell I have highlighted on each month’s records that tells me, to the penny, how much I paid in interest this month (a total of student loans & credit cards). I look at that number and tell myself “for that lost (poof) $450 I could have bought myself a leather jacket.” Next month, I will be telling myself that $432 could have been used on plane tickets to visit my parents, etc. It is bittersweet to see how much money is going out each month to bankers, but is incentive to keep knocking that number down.

  24. Ari says:

    Only a handful of people (maybe less) can turn around financially and philosophically in fifteen months such as your accomplishment.
    “Never look back unless you are planning to go that way.”
    — Henry David Thoreau, American philosopher

  25. Sue says:

    My question to you is why are you building a house when your son is 15? Five years later both of your children will be leaving the home. What you want when you have children at home and when you don’t are completely different. Until your youngest goes to college your life will be revolving around those kids, especially the wife’s (usually). You won’t even be able to comprehend at that time the difference in lifestyle after they leave. You won’t need the same space. You won’t want the same activities. There are so many things different. Maybe this was a 20 year goal. I would suggest to make it a 25 or 27 year goal. You need about 2 years without them in the house to know what your life will be like after they leave. The other option would be to shorten this goal and get the house built before they turn into teenagers,about 10 years. Then you can plan a home with their likes and activities and friends in mind. It will give you lots of good memories with the kids and enough time to enjoy it making it a home for all of them.

  26. Brian says:

    Trent, you had to go through this in order to get where you are now—-which is helping people(and making money from it as well)!!!

    You bring credibility to your posts because of your past choices, which allows your readers to relate to you.

    I do think this post addresses the emotional side of money/debt management which is rarely addressed….except for Suzie Orman.

  27. justin says:

    It takes a long time to realise that things will usually get cheaper and you have a long time to obtain something.

  28. Pam says:

    Patience is something I’ve been struggling with myself lately. Although I never had to go through a meltdown such as you did, I constantly feel as though I’m never going to get ahead, never going to meet my goals.

    One thing that helped was to set up spreadsheets for my short term [one year] and long-term [20 years] financial goals. For the short-term goals, I layout how much I want to set aside each month during the coming year for a specific goal [401k, children’s college education, etc.], then underneath those amounts, I put in the actual amounts that I manage to put towards those goals. It helps me see the progress I am making on a monthly basis [with a running total for the year].

    For my long term goal, I set up columns projecting the balances I hope to achieve at the end of each year for the next 20 years for such things as paying down my mortgage early, my retirement accounts, and my children’s education accounts. Then at the the end of the year, I enter in the actual mortgage or account balances.

    This longer term goal sheet has really helped me with my patience problem. For instance, last year my retirement accounts did so well that it put me a year ahead of where I was supposed to be based upon my projections. Without this sheet, however, I wouldn’t have known where I stood in terms of meeting my 20 year goals.

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