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If you have debt, it can feel like you’ll never pay it off. It’s not easy, but we’ll show you how to stay motivated when paying off debt.
You’re Not Alone
If you have debt, you’re not alone, 80% of Americans are in the same boat. Credit card debt, student loan debt, medical debt, car loan debt, mortgage debt. Those who don’t have debt are decidedly in the minority. So if you have debt, you’re not alone. The average American has $16,000 of credit card debt.
We know it can be discouraging, but there’s hope. You just need to keep your chin up and know that you’ll get through this and come out the other side debt free.
1. Be Reasonable
When you first decide to tackle your debt, you’re super gung-ho. You’re going to pay this debt off in five seconds even if you have to eat nothing but Ramen for the next ten years. Slow down! We’re glad you’re excited to get this debt paid off once and for all, but you have to be realistic.
You might be willing never to go out and eat nothing but noodles for a few weeks, but that won’t last for a few months or ever how long it takes to pay off the debt. When you make a plan to pay off your debt, make sure it includes a realistic timeline and a sensible payment amount each month.
If you get overzealous and use your grocery money to pay off debt, you’re going to break down and charge groceries on a credit card because we all have to eat.
2. Have a Plan
It’s easy to lose motivation when you don’t have a plan. A plan gives you motivation because you know what you need to do and you’re doing it. The end result may be a ways off; you can’t control that.
But when you are working your plan, you are controlling what can be controlled, and that always feels good. To steer is heaven, to drift is hell.
If you have more than one debt and you just throw money at each one randomly, not only will it take you longer to pay them off, but you’ll end up paying more in interest as well.
There are two proven ways to pay off debt, the snowball method, and the stacking method. With the snowball method, you list all of your debt according to the amount owed, lowest to highest. You focus on paying the smallest debt first, as much as you can while paying only the minimums on the others.
Once the first debt is paid off, you use the amount you were paying on it and every other available dollar you have to pay off the next debt on the list. And so on until all the debts are paid.
The benefit of using the snowball method is that if you have one or more relatively small debts, you can pay them off quickly. And seeing those debts crossed off the list helps to keep you motivated.
To use the stacking method, you list all of your debts according to interest rate, the highest interest rate debt first, the second highest next, until all the debts are listed. You use the same method to pay each debt off that we used for the snowball method. The benefit of the stacking method is that it’s the method that saves you the most on interest since you’re paying the highest interest debts first.
Whichever method works best for you, trust in the process. When you start to feel discouraged, look at how much debt you’ve already killed off or how much in interest you’ve already saved.
3. Change it Up
It’s essential to have a plan to pay off your debt, but once you’ve chosen the method, snowball or stacking, it’s okay to switch off between the two. You may have decided to use the stacking method because it makes the most financial sense, it’s the method that saves you the most money.
But if your debts are high dollar amounts, the stacking method can make it feel as though you aren’t making any progress. That’s not true. You are making progress. But it may not result in a “quick win”the way using the snowballing method can.
If you have a few small debts and you pay them off quickly with the snowball method, it can be really motivating. Those debts are gone! If you’re using the stacking method and getting frustrated by what seems like lack of progress, switch over to the snowball method.
Give yourself one or two quick wins for some much-needed motivation, and then you can go back to the stacking method or stick with snowballing.
4. Make a List
When you start to lose motivation to continue paying off your debt, make a list of all of the reasons you’re doing it. So you can take a vacation, buy a home, move out of your parent’s house, quit a job you hate to pursue your dream job, move to your dream city.
So you can sleep better at night, so you’re not afraid to open your mail or answer your phone. When you start to feel like giving up, it’s good to have this list to remind you why you’re doing this.
5. Selective Amnesia
While you’re concentrating on one debt, apart from paying the minimum on the others, don’t think about them. If you look at your debt as a whole, it’s easy to become discouraged.
Don’t think about any of your debts apart from the one you are currently paying off aggressively. The more you can focus on that one debt without distraction, the faster you will be able to pay it off.
6. Let It Go
Once you have a plan in place, stop obsessing about your debt. Yes, of course, it would have been better never to have gotten into debt in the first place and yes, paying it offsets you back in your financial goals, but none of us can change the past.
Beating yourself up about it is not only demotivating it’s also futile. There are going to be enough things along this journey that will make you feel like giving up; your thoughts shouldn’t be one of them.
7. Learn From It
Having to pay off debt should be a harsh lesson, one that you don’t want to repeat. So go through the process of understanding why you got into this debt.
If you put life on a credit card because you lost your job and it took you three months to find a new one, the lesson is that having an emergency fund could have prevented this, or at least made it not quite so bad. So you need to work on building an emergency fund.
Maybe you got into debt because you bought things you couldn’t afford. There are lots of reasons people do that; they shop when they’re bored, when they’re angry, when they’re depressed. Figure out the reason you shopped yourself into debt and learn other behaviors you can partake in when those same feelings come up.
8. Set It and Forget It
You’re working the plan. Paying off whichever debt you’re focused on and paying the minimum on the others. That’s all you can do. Don’t check the balances on your cards. Don’t keep checking Credit Sesame to see if your credit score has gone up yet( it will don’t worry), don’t continue crunching numbers.
It’s going to take time to get this debt paid off, watching the pot won’t make it boil any faster.
9. Don’t Take On More Debt
This should go without saying, but we’re going to say it anyway. Don’t continue to take on more debt when you’re in the middle of trying to pay debt off. You don’t have to do silly stuff like cut up your credit cards or freeze them in a block of ice unless you do.
If you feel like you’ll be tempted to continue charging, by all means, cut them up, give them to your mom, lock them in a safety deposit box. Whatever you have to do in order not to take on more debt.
Now is also not the time to take on a different kind of debt. If you have credit card debt, don’t take out a student loan or start car shopping. No new debt of any kind until the old debt is paid off. And once it is, your credit score will go up and when you do need to take out a loan for something, you’ll get a better interest rate.
10. Tell Someone
There are two schools of thought on telling people about a goal. There is some evidence that merely telling people we’re going to do something and getting the resulting praise triggers something in our brain that lets us believe we’ve already done whatever it is we wanted to do. So we don’t actually follow through.
On the other hand, it can be beneficial to have support and someone to hold you accountable. Everyone needs that friend who doesn’t judge you for the dumb mistakes you’ve made yet will give you the side eye when you talk about the new pair of shoes you just have to have.
We suggest taking the middle road, don’t trumpet your plans far and wide, just choose one close friend or family member that you know you can count on to give you a pep talk when you need one.
11. Treat Yo Self
Bribery is a pretty good motivator. Choose a milestone, for every credit card you pay off or every $1,000 you pay off, you get to do something or buy something reasonable you enjoy. Maybe your reward is to take a day off work and go hiking. Or to take yourself out for an appetizer and a glass of wine at a nice bar that has good happy hour deals.
Staying motivated to pay off debt is not very different from staying motivated to eat well. If you try to be “good” 100 percent of the time, you’ll go off the rails and binge, whether that binge is a shopping spree or a whole pizza to yourself.
By building small indulgences into your plan, you can help to keep yourself on track and motivated.
12. Visualize the Future
Imagine what life will look like when you’re debt free. No more nights lying awake worrying about paying your bills. No more beating yourself up about past mistakes. A lot less sacrifice because you don’t have to put every extra dollar towards paying off that debt.
You can finally start working on your real goals, taking a vacation, saving for a home, planning for retirement. You can watch your credit score go up, always a fun pass time when you’re a personal finance nerd! Maybe you can finally leave a job or a town you hate. Debt traps us in a lot of ways and being debt free can release us from that trap.
13. Remember How Bad It Feels
Being in debt feels terrible. It’s a massive source of stress and worry and may even be causing fights within your family. If you’re ever tempted to give up on paying off your debt, remember how lousy being in debt feels.
And remember it if you ever find yourself sliding back into debt once the current debts are paid off.
14. Get Inspired
Reading stories about how other people have successfully paid off debt can be an excellent source of motivation. There are entire blogs devoted to the subject, and if you like Reddit, the subreddit Personal Finance has a ton of posts about paying off credit card debt.
You might even learn something from reading about how other people have climbed out of debt. Each person has their own way of doing things, and you may discover some little tricks and tips that you hadn’t thought of.
15. Mark the Date
Remember when you were a kid and you’d mark off the days on a calendar until your birthday or Christmas? It helped add to the fun and excitement of waiting for the big day. Well, paying off debt isn’t fun or exciting, but it does help to know the date that this will all be over.
Because you have a plan to pay off the debt and aren’t just throwing money around at random, you should be able to calculate the date the debt will finally be paid off. Mark it on a calendar and then cross off the days leading up to it. Maybe even plan some kind of celebration to make the occasion.
16. Take a Look Back
When you’ve been paying debt for months, and you still have months to go, take a look back at your starting numbers. Look how much you’ve already paid off and use an online calculator to see how much in interest you’ve saved by paying off what you have so far.
It can be easy to forget how much progress you’ve made when you still see such a long road ahead but you are much further down the road than you were when you started.
17. Forgive Setbacks
There may be times that you fall off the “debt repayment” wagon. If you have enough debt that it will take you many months or even years to pay off, you’re going to slip up once in awhile. You might spend more than what you had budgeted for Christmas, or you might have had a bad day at work and taken your frustrations out at the mall.
It happens. Making a mistake is no reason to give up and abandon your plan. Just dust yourself off and pick it back up.
18. It’s a Process
We know that paying off debt is not easy and that it can be a long process. It’s so worth it though to come out the other side. You may have been in debt for so long that you can’t remember what a life free of debt is like.
It’s wonderful. You feel free in a way that you can never feel when you’re burdened with debt. You don’t have to agonize over every dollar you spend; you don’t have to obsess over interest rates, you don’t have to say no all the time when friends invite you out.
You and your spouse don’t fight over little dumb stuff that had nothing to do with leaving the cap off the toothpaste and everything to do with being in debt.
It’s worth it. When you look back at everything you went through to become debt free, it will all have been worth it. And now you can start watching your net worth grow which is even better than watching your debt dwindle.