The average American has a consumer debt balance of over $80,000. That’s more than the average annual household income! If you’re working on getting out of debt, this number may not surprise you at all. No matter your total debt (even if it’s well-below or well-above the $80k number) it’s time to say, “I’m done with this,” put down shame, and get to work.
If you’ve been following me for a while or you’re a past client, you know that I don’t advocate for any type of consumer debt. (And, I only recommend certain types of mortgages). I know that the first step towards winning with your money is getting rid of all debt! However, if you’re looking at a substantial pile of debt, even the thought of paying it off might be completely overwhelming.
It’s true that going debt free could take months or years. Staying committed to anything that long is really tough. There will be times you feel really good about what you’re doing, and there will be other times you want to run back to the comfort of spending blindly and ignoring your financial mistakes. But, we all know that the best for your family is on the other side of debt!
So, today, I’m going to share some tips on how to stay motivated while getting out of debt:
How to Stay Motivated When Getting Out of Debt
Use the snowball method.
One of the best ways to stay motivated while paying off debt is to utilize the snowball method! It’s specifically designed to be both effective and motivating. What you do is add up all your debts and then put them in order from smallest to largest. (Don’t worry about the interest rate. Just ignore it in the totals.)
Then, you pay minimum payments on all things EXCEPT for the smallest debt. Put all your extra money towards that and try to get it paid down as fast as possible. When it’s gone, you take all the money you were spending on that debt and apply it to the new one. So, if you were paying $100 for the minimum payment and an extra $400 for the current debt, when it’s all paid off, you move to the new one and apply the full $500 plus that new minimum payment. Each time you pay a debt off, the amount of money you can apply to the next principal amount increases!
If it sounds complicated, it’s not. Just pay off the smallest debt first and tell me how it feels! Like a snowball, the longer you go, the bigger your impact will be and the faster you’ll go. It’ll keep your end goal in sight at all times and allow for lots of celebration moments!
Find a friend or community.
If you can find friends working towards debt free goals too, the sense of community makes the process a whole lot easier. Plus, giving up means leaving the tribe, so that on its own will push you toward success! Meet with your community regularly and always contact them when things are getting tough. They can pick you back up and keep you trudging along to the end!
Even if you can’t find friends doing the debt-free journey too, you can find plenty of people in your life to support your goals. Find a person or group that you trust and tell them everything about your debt free goals. Ask them to keep you accountable and to ask you often about your payoff plans. The fear of disappointing your friend will hopefully keep you going even when you want to give up!
Set a date.
Set a date you want to have your debts paid off by. Of course, make sure this is reasonable, so add up your debts and divide that number by your monthly debt contributions. That should give you a good ballpark of how many months it’ll take you to get out of debt. Determine what date you think you’ll be debt free by, and hold yourself to it. Dream about that day and consider it anytime you’re struggling.
Make a visual roadmap.
Being reminded of the progress you’ve already made can be a huge motivator. A visual roadmap that shows your payoff goals is the perfect way to visually represent your process. Make some sort of journey illustration and put your debts on checkpoints on the map. Each time you conquer one debt, move the meter, and remember how far you’ve come!
Have regular family meetings.
The more people united toward the goal, the better. Get the whole family in on the action! Host weekly family meetings to update everyone on the payoff progress—even the kids. You can review your visual roadmap, so family members of all ages can understand how close you are to achieving your goal. It’s a great way to keep you motivated and to teach them valuable personal finance lessons.
Incentivize the journey.
If you like gifts and prizes, incentivizing your goals can be the perfect way to keep you motivated. On that visual roadmap you created, add pictures of your rewards. Maybe after each debt payoff you go out to eat, spend a day dedicated to your hobby, travel to a favorite location, or treat yourself to a massage. Just make sure all of these things are in the budget!
Consume personal finance content.
Personal finance podcasts, books, speakers, and social media pages can keep you focused on your objective. As long as all of the presenters are credible and align with the 7 Baby Steps methods, consuming this content should help you remember what you’re working towards and why. Some podcasts even showcase people who’ve finished their journey and hearing those success stories will remind you that you can do this too!
Does 7 years sound like too long to tackle your debt problem? Do it in 3, then! It’s true that the projected duration of our debt-free objective can be the least motivating part. Living paycheck-to-paycheck for another decade may seem like agony! Instead, get to work, and pay it off faster! Here are some ways you can make big dents in your debt fast:
- Work extra jobs or side hustles
- Sell items
- Sell expensive cars and opt for cheaper ones
- Reduce the number of cars you own
- Cut even more of the budget
- Downsize to a smaller home
- Move to a cheaper area
As you’re working extra trying to pay off debt, it’s easy to get disorganized. You forget to do the budget. You forgot to track your expenses. And, before you know it, you’re swiping your card too much again. Despite the extra income, you’re not seeing debt principals go down!
You’ve got to stay organized. Make sure you have a budget app, spreadsheet, or system that works well for you. Not only do you have to fundamentally understand it, but you need to be able to maintain it day-to-day as well! Plus, it’s easy to have good intentions about throwing extra toward debt, but forgetting to actually do it in the chaos of extra jobs, family life, and all of our other commitments. When you stay focused and organized, you’ll see your progress and hit your targets!
Hire a coach.
The best way to stay motivated when paying off debt is to get someone in your corner who not only knows the logistical struggles of getting out of debt but understands the emotional and behavioral side too. Hiring a coach means you always have someone to keep pushing you along, reminding you of your successes, and revealing new opportunities to reach your goals faster!
When you invest in a service like financial coaching, you are investing in your family’s future. Many of my clients are worried about paying for financial coaching, but afterward they all say the same thing, “It was so worth it!” And, that’s because of all the money I helped empower them to save and reallocate to build a better future and reach their debt free goals. Let a coach like me be there for you, whether you need strategy, focus, or a shoulder to cry on. I’m here for you!
You can get out of debt with the right drive, knowledge, and accountability.
Don’t give up on your debt-free dreams. No matter how big your financial debt is, the idea of being debt-free isn’t a fantasy! I believe in you, and I can help you develop a plan to get to your financial goals fast. Book a free session with me and browse the blog for more personal finance tips and tricks that’ll help you win with money! You’ve got this!