Money mindset is important because our finances touch every area of our lives and affect our long-term trajectory. If your money mindset is one of limitation, where you think things like “I will have student loans forever,” you aren’t going to be motivated to leave no stone unturned in your quest to pay down and exert control over your student loans. Leanna Haakons, founder of financial marketing firm Black Hawk Financial and author of Young, Fun & Financially Free, stresses the impact that positive mindset can have on your life: “By being in the right money mindset, you know where you’re headed, what your priorities and goals are, and how you’re going to get there. No matter where you’re coming from, you need to try as much as possible to stay positive and focused on your end goals and lifestyle values. Know what you’re working for and where you’re headed, no matter where you’re starting from.”
Haakons recognizes that student loan debt is one of those big challenges that can create a negative mindset. She says, “Of course, if you have a big obstacle in front of you from the outset, rather than a clean slate, it is going to be a challenge to keep your mindset strong.” Being self-aware about your mindset, especially around money, is important. Most people don’t regularly practice being aware of their thoughts or how their thoughts impact their energy and mood (for better or worse). Without actively focusing on a positive money mindset, it’s easy to slip into unproductive or even destructive thoughts that will prevent you from sticking with a big goal, such as mastering your student loan debt. For many it can even lead to complete inaction, a sort of personal purgatory.
Having a positive mindset and outlook starts with you—not with your partner, not with your friends, not with your family. And this positive mindset absolutely can translate into taking actions that, over both the short and long term, will improve your life. Haakons adds, “If you have the access, you have the option. For example, within the book you’re reading right now,” (Yup, this one.) “you have access to a wealth of information about student loans and improving your financial life. Because you have access to this information, you have the option, and the ability, to change your current and future life.”
This all builds to the following key point:
You do not have to delay your happiness until your loans are gone.
This is the theme that underlies this entire book. My desire for you is that you will put in the time and energy necessary to gain control over your student loans, take the necessary actions to put your finances on a positive course, and live a life of happiness, regardless of the amount of debt you have. It may take some time, or even a long time, to pay down your student loans, but that doesn’t mean you can’t be happy now.
You may be cynical about the power of positive thinking and changing your mindset, but it could be the difference between moving forward to a more positive financial situation and being stuck where you are at.
Many negative things that we tell ourselves or that others tell us about money are straight-up lies. And student loans can certainly cause us to repeat these lies. You may be burned out and beaten down from your student loans and finances. You may have trouble envisioning a “better” life or even one where your debt isn’t soul-crushing.
“I don’t deserve better.”
“I will never make enough money.”
“I will always be behind where I should be financially.”
“My life will never be what I want it to be.”
“My loans make me a burden.”
“I am stupid for taking out student loans.”
These are all lies. Perhaps it’s just you telling yourself this, but it could be others speaking these lies into your life. If anyone in your life is speaking these lies to you, you need to seriously consider whether they deserve to be in your life.
Here are some truths to speak into your life:
“My self-worth has nothing to do with my net worth.”
“Through discipline and commitment, I can eliminate my debt and put myself in a better place financially.”
“My dream life is possible.”
“I am valued.”
Seek out people who are on your side, who encourage you, and who want to see you succeed. And remember, it all starts with your mindset. You can do this!
Throughout this book, there will be a number of action items. While you can do most action items within the book, I recommend downloading the free companion guide at StudentLoanSolutionBook.com. This website has a number of companion materials you can download and utilize while reading Student Loan Solution:
•PDF Companion Guide
•Student Loan Spreadsheet
•Budget Spreadsheet (two versions to choose from) and Budget Printables
What lies do you tell yourself, or have you been told, about your student loans, your money, and your life? List them.
Now list truths about your student loans, your money, and your life. For example, if a lie you wrote down was “I am a drag on others because of my student loans,” write “My self-worth has nothing to do with my net worth. I have value.”
Don’t be afraid to get specific here, and try to include examples from your life when possible.
Keep these truths close to you, either on a note card or a sticky note on your desktop.
Say them out loud, and even shout them out! You are capable of doing great things!
Let’s shift our focus to creating a student loan plan and strategy. Too often we hear a one-size-fits-all solution. These “solutions” do not take into consideration your unique situation, such as what loans you have, what your income is, what your repayment options are, whether you have an emergency fund, and so forth.
I want you to find a solution to your student loans that works for you.
Let’s look at a hypothetical situation. If you have a low income and are in a career that you want to stay in, there are options for you to make your student loans more manageable. That may mean moving into an income-driven repayment plan, starting a side hustle, or making sacrifices elsewhere. But, at the end of the day, you need a plan of action that works for your specific situation. It may not be realistic for you to double your income or cut 50 percent of your expenses which may be the only way you could pay off your loans on the standard ten-year repayment plan (more on that soon).
Some finance gurus will tell you that you should hate your student loans so much that you can’t stand the thought of them. While some have responded well to this message, I am in favor of a more balanced approach to paying off student loan debt which allows you to:
•Build an emergency fund.
•Pay off high-interest debt.
•Invest for retirement.
•Use repayment options that align to your situation.
It’s worth noting that there is nothing wrong with going “all out” and depriving yourself until your loans are gone. It’s one option, but not the only option.
As you go through the process of creating and implementing your student loan strategy, including identifying and making smart money moves that improve your situation, you will quickly realize that not everyone will end up with the same student loan strategy. And that’s a good thing! Your situation is unique to you, and your strategy should reflect that.
A Step-by-Step Plan to Gain Control
The goal of