Debt-Free in 2013

I have a problem.

I've gotten addicted to saving money and paying off loans.

Now, I wouldn't say I've adjusted my habits of spending quite yet, I still do a lot of impulse shopping (probably because I browse so much online), but I am doing a good thing by making the money disappear before it has time to burn a hole in my pocket.

See, I started a spreadsheet that calculates my take-home income as well as (most of) my expenses. The most exciting part of it is where I show my progress towards paying off my loans. If I adjust my monthly payment even a tiny bit, I see my balance go down and down. The first month I had this spreadsheet...I paid off an entire loan. It was a small one, of course, but I paid it off. Having it on my spreadsheet was just a liability, something hanging over me. When the balance gets down to around $1,000, I can't stand it. I have to pay it off.

I think I'm crazy. I'm doing the same thing with my savings. I think about how pathetic my savings account has been compared to how much I make, how I'm allowing it to hover at this low balance. I mean, I used to be pretty poor growing up (not that bad, of course). Then, I was a poor college student. Then I was a poor AmeriCorps volunteer. But now, I have a grown-up job and I need to do grown-up things with my paycheck. Like save more money. Have an emergency fund. Have a fun fund. So I move a chunk of my paycheck over to my savings account as soon as it comes in. Obviously I could transfer it back to my checking account in a bind, but for now, it's safe since it's not in my checking account (out of sight out of mind).

About two months in to using this spreadsheet, I've started to notice the effects of squirreling away my income. My checking account is lower than it usually is (it's closer to this month's credit card balance than it usually is). But that seems good to me. Now that I'm putting my money where it matters, I can pretend like I'm a poor college kid with only $300 in my checking account. As long as it's in the bank, rather than in my closet, I'm good. I'm even going to start contributing to a retirement fund. More on that later.

So my dilemma, now, is what to do with my tax return. I got very excited, thinking about how many plane tickets it could buy, or how I could invest in some nice new bike commuting gear, and then...I compared it to my loans. Turns out, my refund this year is almost identical to the balance on my loan with the highest interest rate. I've been whittling away at that one since I paid off my other loan, and it is SO tempting to just make that one go away. And it kind of seems like a sign.

The point is, I like having money, and I like spending it. I especially like spending it on experiences, like visiting my fabulous friends in their fabulous cities around the globe. But if I were to pay off ALL of my loans by the end of this year, then ALL of my money...would be mine. And 2013 could be all mine, too.

One small issue is that 2 of my loans have ridiculously low interest rates (0! and 2.3%). I *could* hold off on paying them down since they won't be accruing very much interest, but again, I just want to be done with debt. So we'll see how this year turns out. But for now, it's full steam ahead. Here's to being debt-free in 2013. I like the way that sounds!