3 Steps to Staying Motivated While Paying Off Debt

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by Kay Lynn · 13 comments

Paying off a large amount of debt can take one or more years for some of us. It’s easy to be gung-ho and make large sacrifices for a short period of time. But how does one stay motivated as those months turn into years?

When I realized it would take over two years to pay off of our non-mortgage debt, it became imperative to keep on track. I came up with a plan of three steps.

Set Mini-Goals

I set a deadline for paying off each individual debt. Each time one was met early or on time, that success kept me ready to keep moving forward to the next goal.

If you have only one debt, then divide it into measurable, smaller chunks so it doesn’t seem overwhelming. For me, the student loan is the big debt but breaking it into $5,000 segments has helped attack it.

Track Progress of Your Debt Reduction Plan

I keep track of the monthly balances of each debt. Being able to visualize each one’s road to a zero balance as well as overall progress is motivating. There are debt snowball forms and even a smart phone app to help.

Some people document the progress more tangibly with charts or even paper chains where each loop represents X number of dollars. .Many personal finance blogs are started by the owner as a way to keep focused on becoming debt free.

Limit Deprivation

Our budget has been trimmed to make more money available for debt repayment. But this doesn’t mean we don’t spend money on vacations, entertainment or even regular lattes.

The difference is that no additional debt is incurred on vacations and they are less lavish. Entertainment dollars are stretched by half price tickets and free events. Instead of a daily latte on the way to the office, it’s weekly using a membership reward card.

Because these expenditures are only reduced, not eliminated, the tighter budget is something we can live with long term.

If you’re one of those people that can set a goal and find it easy to sacrifice until it’s met, you probably don’t need these steps. For the rest of us they’ll keep us determined until the debt-free day arrives.

Photo Credit: aarmono

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  • http://www.investitwisely.com Invest It Wisely

    You gotta keep the big picture in mind, and remember what it is that you’re sacrificing for! If it seems like all pain with no gain, it will be hard to stick to it. Visualizing and tracking your progress does help a lot with this.

    • http://www.bucksomeboomer.com/ Kay Lynn

      Good point about visualizing being debt-free. Using a vision board was one of my key takeaways from Psych Yourself Rich. I’m going to be working on that this weekend.

  • http://www.littlehouseinthevalley.com Little House

    These are all great tips. I know that when I was paying off my credit card debt, I focused paying off the total amount one card at a time (while still paying the minimum on the others, of course!) That definitely helped. Now I just have to tackle student loans! I like the idea of breaking into smaller chunks. :)

    • http://www.bucksomeboomer.com/ Kay Lynn

      I’ll be done with the last credit card balance in January and then it’s on to the big student loan. I’m glad to know it’s worked for you. Congratulations on your progress.

  • http://diyfinancialfreedom.org Chris H

    All great advice Kay Lynn! I think tracking your progess in a very visible way (ie, a chart on the fridge) is especially helpful. For me, the debt is gone, but I still use the chart to track spending/income each month. Getting and keeping that red line(money going out) below the green line (money coming in) is my focus, and having that visual reminder there is a great reminder & a huge motivator!

    • http://www.bucksomeboomer.com/ Kay Lynn

      Chris, I love that idea! It would also be visible to friends and family so they could provide support in meeting goals.

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