Paying off debt is a long-term commitment that requires discipline, and staying motivated until your debts are paid off can be a major challenge. Consider these examples:
• If you have a student loan of around $38,000, it can take seven and a half years to pay off with monthly payments of roughly $500, according to the Education Data Initiative.
• If you have $10,000 of credit card debt at a 20.39% interest rate and want to pay it off in three years, you’ll have to pay $373 every month.
It may sound daunting, but here’s a pep talk: The advantages of paying off debt are well worth the effort. With more money to spend each month, you can invest and build a nest egg toward retirement or simply save for luxuries like vacations. Paying down debt can also help build your credit, giving you access to loans with more attractive rates and terms in the future.
To help you buckle down and say goodbye to your debt, read on to learn how to stay motivated while paying off your debt.
Key Points
• Tacking your progress and watching your debt diminish can boost your motivation and help you stick with your plan.
• Post photos or create a vision board to visualize goals and stay motivated.
• Celebrate small wins by rewarding yourself with budget-friendly treats for milestones.
• Choose a repayment method that suits your situation, like the debt snowball or avalanche.
• Earn extra money through overtime, gig work, or part-time jobs to accelerate repayment.
Why It’s Hard to Stay Motivated When Paying Off Debt
Paying down debts can feel like an uphill, almost endless battle. Depending on how much you have to pay off, the process may take many months to years and require some uncomfortable sacrifices you’d rather not make.
With a few changes to your money mindset, however, you’ll likely find that paying down debt becomes easier as you go along and learn better money management.
If you are ready to get rid of debt, read on to learn 15 ways to stay motivated.
15 Ways to Help You Stay Motivated When Paying Off Debt
Here are 15 tips to help setting yourself up for success. They’ll give you a boost as you consider how to stay motivated while paying off debt.
1. Remember the “Why”
Why have you decided to pay off your debt? Are you tired of never having as much spending money as you’d like and watching the debt pile up? Do you hate the idea of dollars flying out of your bank account to pay for interest? Do you have financial goals that are falling ever further out of reach?
Whatever your reasons, remind yourself regularly why you are working so hard and monitor your progress so that you can see the results.
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2. Get Organized
Achieving a goal is easier if you have a plan. Your strategies to become debt free might include consolidating your debt with a lower-interest loan, or you might decide to get a roommate and save on rent.
Whatever your method, plan a budget that you can live with and set up automatic payments each month so that you don’t have to think about your bills daily. (This will also help you avoid late fees.) Then, be disciplined, stick to your budget, and watch your debt diminish.
3. Have an Accountability Partner
Telling someone you are working on paying down debt can help motivate you. Called an accountability partner, this person could be your spouse, a friend, or a financial advisor. If you worry about telling your accountability partner that you fell off the proverbial wagon, remember that nobody’s perfect. Don’t beat yourself up. Just get right back on track with some encouraging words from your partner.
4. Put Yourself in an Uncomfortable Situation
Achieving a goal often takes acknowledging the difficulty saving money can present and then pushing through it. Paying down debt will require making changes to your lifestyle so that you can live more economically.
That might mean going out less with friends, not spending so much on clothes, or moving in with parents temporarily. Feeling uncomfortable is not a bad thing; it can be a powerful motivator. You will power through any feelings of deprivation to get on better financial footing going forward.
5. Track Your Progress
When you initially decide to tackle accumulated debt, it can seem overwhelming. By tracking your payments and your diminishing debt, you will see progress. This in turn can give you confidence and enhance your saving motivation as you stick with your plan.
6. Have a Vision Board
Staying motivated while paying off debt can involve having a vision of what you will do once you are debt free. Use that as a motivator, not just in your mind but in your home. Perhaps you want to take a vacation to London once you pay off your credit card balances. You might post your goal where you can see it so you are reminded each day of your intention. You might even create a vision board with photos of your goal to help spur you on. Whether it’s pics of the West End theaters or teatime at a posh hotel, those photos can be motivating.
7. Celebrate the Small Wins
Find ways to reward yourself as you gradually pay down your debt. These special treats should be inexpensive (so as not to blow your budget) but meaningful. It could be picking up and reading the latest book by your favorite author, a meal out with friends, or buying yourself new running shoes. Build room into your budget for rewards.
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8. Have Like-Minded Friends
Surround yourself with people who will encourage you to spend less rather than overspend. Friends who like going out to expensive restaurants or shopping at expensive stores are generally not going to help your cause. There are lots of ways to socialize that don’t require spending a boatload of cash. For example, grab a coffee with a friend, or go for a hike. Don’t let keeping up with the Joneses (when the Joneses are big spenders) foil your efforts.
9. Reach out to Others
Knowing that you are not the only one fighting debt is comforting, and hearing success stories will encourage you to continue. Seek support by listening to others.
Podcasts on personal finances and online discussion platforms can provide community and give you ideas on how to manage your debt.
10. Focus on the End Date or End Goal
Have an end date or a final goal, and mark it on your calendar. Plan to reward yourself for your hard work when you reach it. It might be a weekend away or finding a new apartment now that you have freed up some cash in your budget. Looking forward to something will keep you motivated.
11. Listen to Sound Financial Advice
How to stay motivated to pay off debt comes down to making informed decisions that hasten the process. It’s important to make sure the financial advice you listen to comes from reliable sources. Many finance “gurus’ on YouTube and social media platforms may not give out the best advice. Find a financial advisor via recommendations if you are unsure of the steps to take to pay down your debt or need additional guidance.
12. Choose a Repayment Method that Makes Sense
There is more than one way to pay off what you owe, and the debt repayment strategies you choose should suit your particular situation and financial goals. You might choose the debt snowball method, where you pay off your smallest debts first for some early wins, or you might pay off the debts with the highest interest rates first to save the most money.
Feel as if you are in too deep of a debt hole? Consulting with a financial advisor or a credit counselor at a nonprofit can help you find the best ways to get the upper hand over your debt.
13. Break Repayment Down Into Smaller Goals
It helps to break down any overwhelming task into smaller goals. For example, if you’re interested in debt consolidation, the first step might be to do some research on the topic. The next step might be to arrange a loan with the bank and set up payments. Then, set goals to achieve after six months, 12 months, 18 months, and so on. It can help motivate you to pay off debt to see the individual steps that will get you there.
14. Earn Extra Money
You’ll pay off debt quicker if you can earn extra money. Think of ways to increase your income. Can you do overtime, gig work, or part-time work? You might meet new people and expose yourself to a whole new industry that interests you. Who knows? It could be the start of an entirely new career.
Recommended: 11 Benefits of Having a Side Hustle
15. Gamify Your Debt Repayment
Setting a challenge for yourself can add a sense of fun to paying off debt, and it can boost your confidence. For example, you might set a goal of making an additional $1,000 this month from a side hustle. Or each month vow to briefly give up a typical bit of discretionary spending, such as no take-out coffee for one month. The money saved goes towards debt. Gamifying can help you reach your goals quicker, just make sure your challenge is achievable.
The Takeaway
Paying down debt can be a long process, and it is not easy to stay motivated. Some of the ways to stay motivated when paying off debt are to acknowledge exactly how much you owe and then develop a plan, with clear benchmarks, to whittle it down. It also helps to reach out to others to learn their experiences, set achievable milestones, and reward yourself when you reach them. These steps can help keep you going untill you reach that debt-free finish line.
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FAQ
Does paying off debt make you happier?
Paying off debt can be difficult at first, as it usually involves making some uncomfortable changes in your lifestyle and budget. Ultimately, however, paying down debt can come as a huge relief. It also frees up funds you can use to achieve your goals and improve your quality of life.
What are the benefits of paying off debt?
Paying off debt can lift a large weight off your shoulders. It also frees up funds you can now use in other ways, such as saving for an upcoming vacation or a downpayment on a home. In addition, taking control of your finances and paying off debt are huge accomplishments that can boost your confidence to tackle other challenges.
Is it worth it to pay off your debt?
Paying down debt helps reduce the amount you’re paying in interest. This frees up money to use for other purposes, such as saving for short- term goals and investing for the future, which can help you build wealth over time.
Photo credit: iStock/BartekSzewczyk
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