They say ignorance is bliss and I have to say that when it came to my loans, this statement couldn’t be more accurate. At the end of PT school, I remember sitting in a presentation about loans. The speaker discussed how credit card debt was like bad cholesterol and student loans were like good cholesterol. I’m a sucker for analogies and took this sentiment in full stride. I had good cholesterol. Nothing to worry about. Nothing needed to change.
So for the first three years of repayment, I looked at my loans as necessary and harmless- they were just another expense to be paid monthly. I set myself on a graduated plan that would increase every two years, selected autopay, and made sure the $520 was included in my budget every month.
I remember wishing I didn’t have loans, but found solace knowing that this was the only way I could have become a physical therapist. And while it was lousy, I was paying for an education I valued highly. So, I didn’t look at my loans. I knew they were there and they were annoying, but as long as I was paying them off monthly it was fine (good cholesterol).
Fast forward three years into repayment and I decided to really look at my loans. I was pretty impressed that I had paid over $20,000 dollars. Pleased with the large amount of money, I quickly scrolled to look at the dent I had made in my loans. And, that is precisely when I stopped looking at my loans as good cholesterol and started hating my loans. I knew something had to change.
In three years and over $20,000 dollars later, I had paid $4 toward my principle. They had $20,000 of my hard earned dollars and I had paid off the equivalent of a starbucks latte from my $60,000+ loans.
I wouldn’t equate paying $20,000 to pay off $4 as good cholesterol. To me, there isn’t anything good about that. Sure, I was meeting my monthly minimum, but I was ridiculously angry at how much of my money wasn’t going to my education at all. It had been going to interest.
This wake up call really caused my to dive deep into understanding my student loans. Here are the limiting beliefs I held and the freeing truths that Phil helped me identify:
1) Thought Barrier: “Everyone has student loans and it is no big deal.”
When you sit in a free seminar about loans with nearly 95% of your PT class, you realize nearly every single PT student has loans to some degree. There is comfort in this. There is comfort in knowing that you’re not alone and that everyone is on the journey of repayment together.
However, there was one problem with this comfort. We all traveled slowly and felt justified in it. While we were feeling camaraderie in our struggle, we didn’t recognize how student loans were holding us back. Or maybe some did, but I didn’t. I remember hesitation whenever a great opportunity required a financial contribution. I would feel guilty when I spent money on continuing education. I knew people who put off board specialty certification. And it wasn’t until I put off taking a speaking course for far too long that I realized how my loans were stunting my growth. What was even worse than my loans holding me back was how they unconsciously made me feel.
While I wasn’t worrying about my loans, I actually was. No matter how hard I tried to deny it, I was in this constant state of stress. I remember trying to convince Phil that my loans were just an expense and that they didn’t really bother me. And with one question, he tore down the charade- “But, how would you feel and what would you do if you didn’t have loans?” If you can honestly answer that nothing would be different, then for you, loans are no big deal. However for most of us, loans are holding us back.
Use your debt free dream to fuel your repayment. Gain traction with the frustration. We all have debt and it is a big deal.
2) Thought Barrier: “I will ALWAYS be in debt”
I was pissed when Phil challenged me to think about a life without loans. I was upset because he was having me dream about a reality that couldn’t happen. But, he fought back with every excuse I gave. He ended the conversation with, “You could pay that $60,000 in 2 years if you really wanted.”
And with those instigating words, I set out on a two year mission to do just that. I’m one and a half years in and I’d be lying if I told you I guarantee that am going to get them all paid off in two years. But, I’m also telling you the truth when I say that it is currently a close race. *NOTE** Even if you have 2 or 3 times that in debt, it is still possible for you to pay off your loans in a reasonable time. Don’t get discouraged by the size of the number.
Don’t ask can I pay off my loans, ask how can I pay off my loans. Once you change the sentence to how you’ve got a responsibility to take action.
3) Thought Barrier: ”I am not good at finances”
Okay, this wasn’t just a thought barrier, this was fact. I wasn’t any good at finances. But, not because I’m not good at finances, but because I was never taught finance. (Actually my parents have been trying to teach me for years, but I stopped listening after “save your money” because I understood that part.)
The truth is with a little education, you can conquer your finances. If you have made it through PT school, you have 10x the intelec needed to control your money.
Freeing Truth: You can be good at finances. Just like you were not very good when you started doing PT evaluations, you got better by gaining knowledge, practicing, and having a mentor, you can do the same thing with your finances.
4) Thought Barrier: “I will eventually pay it off by paying the minimum. I deserve to spend because I have to make up for the experiences I missed out on when I was in PT school.”
I still struggle with this one. I go on Instagram and suddenly I’m convinced I need new clothes, a vacation, a new car and a dog (I really do need a dog, but this is another conversation). The truth is, we do deserve to splurge on ourselves. We deserve new clothes, a vacation, a new car and a dog, but I would argue that financial freedom, a life without loans, is going to be even more fulfilling. Plus, once we get there it becomes that much easier to get those things.
Freeing Truth: You can control your debt, it doesn’t have to control you.
And now you’ve read all that and you’re like okay, now I want to pay off my loans, but don’t know how. I’ve essentially done to you what Phil did to me….only he offered a solution. And, I do have a solution. Only it is not easy, it is not quick, and it doesn’t look as cool on Instagram as pictures of me and dog would.
Step 1: Get to know more about finances
A great book to start with is Dave Ramsey’s Total Money Makeover.
Step 2: Get an accountability partner.
Shout out to Becca who is holding me accountable. And warning, our celebration pictures on instagram of the Pacific Coast Highway are not going to show any of the hard work paying off loans has taken.
Step 3: Start small.
Sell stuff you don’t need/use (like the PT Documentation book that you bought and never opened), start a budget, and save.
We have also put together PT Rebel Starter Kit which helped me get on the right track and also opened my eyes to the fact that my parents were right all along, sorry Mom and Dad!