This post is from staff writer Honey Smith.

Ever since I paid off my consumer debt, I have been thinking about setting my next goal. Obviously paying off my student debt in its entirety is the long-term goal, but that is going to take years. And years.

For me, having a goal that long-term feels psychologically similar to saving without a goal. To keep myself motivated, I think it’s a good idea to pepper the road ahead with short- and medium-term goals as well.

Step 1: Getting in touch with my feelings

I didn’t want to set a goal impulsively, however. I know I’m the type of person who, once I’ve got my eye on the prize, sticks with things long after I probably shouldn’t. Case in point: going to grad school for eight years to earn two degrees that aren’t very lucrative. This time around, I want to think about things ahead of time, rather than after the fact. I want to be Prometheus instead of his twin brother, Epimetheus.

So I paid attention to how I felt after having reached one major milestone. As it turns out, the thing I enjoy the most is the effect improving my cash flow had on my mental state.

Not that I’ve stopped meticulously tracking every penny I earn. I continue to track not only because I am still not financially comfortable, but also because I kind of geek out over spreadsheets. I am one of the weird ones who enjoys the budgeting process (if only I had discovered that about myself years earlier!).

The thing I enjoy about positive cash flow is that I have more freedom to choose what I do with my money. To put it another way, having the opportunity to make the responsible choice grants me more agency than being forced to make the responsible decision. The side effect of feeling like I can take the credit is that I am happier about my decisions. This gives me the motivation to make even more good decisions.

That, then, is my starting point. The better my cash flow is, the more in control of my destiny I feel and the happier I am. As a result, I’ve decided to make my short- and medium-term goals with an eye towards improving my cash flow.

Step 2: Setting the short-term goal

My first major victory in gaining control over my finances was two-pronged: I lowered one monthly bill (by changing my insurance coverage), and eliminated another monthly bill (by paying off a debt). So for my short-term goal, I decided to examine my ongoing monthly bills to see if any could be lowered.

Because I followed El Nerdo’s epic tale of his search for the perfect cell phone and plan, the thing that immediately sprung out at me when reviewing my own monthly spending was my cell phone bill. At some point in the distant past, I signed up for a plan with unlimited data and 450 anytime minutes, to the tune of $68 per month after my employee discount.


I logged in to review the details of my contract (which, note to self, was also instrumental to lowering my life insurance payment). As it turns out, my current contract is up on November 28. In just a couple of weeks, I will be able to switch to any carrier I want without paying the $350 early termination fee. Huzzah!

I then investigated a variety of no contract carriers. However, it turns out that El Nerdo had done most of the work for me. While his initial choice turned out to be insufficient for his needs, 300 minutes per month plus unlimited messaging and data is right in line with my current usage.

And because of the money I’ve saved as a result of my previous success, I can pay for the new phone (required to use this carrier) with cash. Lowering my cell phone bill from $68 to $35 improves my cash flow by $33 per month. Once again, huzzah!

Step 3: Setting the medium-term goal

After getting clobbered with a “debit adjustment” that pretty much negated the reduction in my interest rate when my Special Consolidation student loan took effect, I decided my $5,352.61 student loan balance was the perfect medium-term goal.

Getting that balance out of the way will free up $77.52 each month (the current minimum payment). When combined with the proposed savings from switching to a new cell phone contract, that’s over a hundred bucks a month! Now that’s what I call a SMART goal.

After the difficulties with my Federal Direct Loan, I was a little nervous about applying extra payments to my non-consolidated account, which is with a different servicer. However, I was so motivated after identifying this debt payoff as a possible goal that I decided to run a small experiment.

A few weeks after my September payment went through, I scheduled an extra payment of $100 through my servicer’s online interface. I assigned the payment to principal (rather than as a pre-payment of the next month’s bill, which was also an option). Then I waited to see whether the extra payment would be applied according to my request and whether my Kwikpay October auto debit would still be deducted normally. Score on both counts!

Step 4: Impatience and implementation

As I’m sure you’ve noticed, it will be a couple of weeks before I can move forward with my short-term goal. Additionally, I need cash up front to achieve that goal. Also, the holidays are nearly upon us. This means it will probably be January before I can start aggressively implementing the extra principal payments required to meet my medium-term goal (though I do plan on making some additional extra payments in the meantime).

How can I harness the power of patience while I wait for the timing to be right?

In fact, this is something I’ve struggled with since focusing on financial responsibility in earnest. In my spare time I play around with my spreadsheet, plugging in future income and expenses through the end of the year using a variety of scenarios. Every other Friday when I can send off my payments I am so excited, but then it feels like ages will pass until the next direct deposit.

It’s been asked before, but how do you encourage yourself to stay the course when you are in between the high of your debt payments? I know slow and steady wins the race, but what is that turtle thinking about while he plods along?

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