Hopefully those of you who have resolved to make this a debt payoff year are still holding fast to your resolutions. As I’ve started to notice the crowed of new gym users waning in recent days, I can’t help but think others might be struggling with ambitions goals set for the new year. From experience, I know it’s hard to stay motivated when paying off debt. Anyone can to anything for a short period of time, but how about when fixing a problem takes months or even years?
Have a Reason for Paying Off Debt
It’s important to have a reason for paying off debt. Of course less debt means greater financial stability, but having a more personal reason is a better way to stay motivated. Write down what you hope to achieve once you’re debt free.
I want to pay off debt:
- so my kids don’t have to support me in retirement.
- so I can spend more time doing what I love instead of working.
- so I can handle whatever life throws at me without wondering how I’ll pay the bills.
- so I can take my parents on a trip they’ve always dreamed about.
Your reason might be aspirational or simply to sleep better at night, but make sure to clearly state what being debt free brings to the table.
Set Up a Reward System
Paying off debt is like being on a seriously restrictive diet for a very long time. No fun. By building rewards into your debt payoff plan, you’ll have something to look forward to. When we got serious about paying off our credit card debt, eating out once a month was our treat. After paying off half our credit card debt, we took a vacation. Some people feel you should never spend money on travel if you have debt, but we didn’t see it that way. The few hundred dollars we spent on that trip helped us stay motivated to continue paying thousands more toward our debt.
Make it a habit to reward yourself every time you pay off a credit card or a percentage of your total debt. Either keep track with a spreadsheet or check your progress with a free account at Personal Capital. Eventually seeing your balance shrink is reward enough, but having an actual treat to look forward to can often get you over the shock of a new debt reducing lifestyle.
Share Your Goals With Like Minded People
Many of our family members and real world friends view debt as a necessity. It made no sense to talk about not having a credit card balance or paying for a car in cash. We might as well have been speaking Portuguese.
The lack of like minded people in our day to day lives was one reason I decided to start a blog. Originally, I wanted to connect with others who shared our views for debt free living. I’m not sure we would been able to stick to our plan if it wasn’t for the personal finance community. I know we certainly wouldn’t have paid off our debt as quickly if I’d kept listening to “normal” people.
If you don’t have those in your life who support side hustling, brown bag lunches, and considering the public library a fine form of entertainment, look online. Even better, start your own blog. If nothing else, blogging will take up time that was previously spent shopping online or reading Facebook posts bragging about the latest and greatest material possessions that can be had for six years of payments plus interest.
On any type of personal journey, there will be setbacks. Debt payoff is no exception. Your car, health, and home all could decide to mutiny at the same time, hitting you with unexpected expenses. Hopefully, you have money set aside for emergencies, but even if the credit card has to come back from hiding to dig out of a hole, that doesn’t game over.
After the crisis has passed, brush yourself off and get back on the horse. There are always things you can do to earn extra money for getting back on track. A few setbacks don’t mean debt freedom is beyond reach. Expect them. Deal with them, and move on.
Stay Motivated When Paying Off Debt
Now that you have a why, a reward to look forward to, people to support your debt payoff journey, and know how to cope with setbacks, staying motivated should be easier. No matter how prepared you are though, spending a significant portion of your life paying off debt is not easy, but the rewards of a life without consumer debt are far greater than the effort it takes to become debt free.
What setbacks have you experienced when paying off debt? What is your number one reason for being debt free?