How to Stay Motivated to Pay Off Debt

How to Stay Motivated to Pay Off Debt

 

When my husband and I got married, we had six figures of student loan debt. And unfortunately, we definitely aren’t alone.

The average student loan balance is nearly $38,000. And when you throw in credit cards, car loans, and other debts, most people are paying off debt the majority of their adult lives.

I know as well as anyone how easy it is to lose motivation when you’re paying off debt. I’ve worked hard over the past couple of years to find strategies to keep my head in the game.

In this article, you’ll learn 8 tips to help you stay motivated while paying off your debt.

 

How to Stay Motivated to Pay Off Debt

 

Have a debt payoff plan in place

 

One of the most common problems people run into when paying off debt is that they simply make their minimum payments every month. Either that, or they pay a little extra on each debt, but still barely make progress on any of them.

They don’t look at their balances altogether, and they don’t set a strategic debt payoff plan.

The most important first step to tackling your debt is crafting a debt payoff plan. The two most popular are:

  • Debt snowball: Prioritize the smallest debt, putting all extra money there while making the minimum payment on your other debts.
  • Debt avalanche: Prioritize the debt with the highest interest rate, putting all extra money there while making the minimum payment on your other debts.

I prefer the debt avalanche because you end up saving the most money over the long run. But the debt snowball often results in small and quick wins, which helps keep people motivated. At the end of the day, the best debt payoff plan is the one you’ll stick it.

Once you have a debt payoff plan in place, you’ll start seeing progress on your payoff and start to see the end in sight.

Undebt.it is hands-down my favorite tool to create a debt payoff plan. Just enter your debts, and the tool will help you prioritize and tell you how long it will take you to pay them off. The best part is that it’s a free tool.

 

Create helpful habits

 

Motivation is great to help you jumpstart your debt payoff plan, but unfortunately, it’s not always enough to stick with it. That’s where habits come in.

Your habits will keep you moving on your debt payoff plan when you aren’t feeling motivated. Helpful habits to help you pay off debt include tracking your spending, using a budgeting app, and schedule weekly or monthly money dates with yourself and/or your partner.

The book Atomic Habits by James Clear is the best book to learn about habits and how to create healthy, helpful habits.

 

Break it down into small, manageable steps

 

When you’re paying off a lot of debt, it can feel overwhelming to look at the big number all the time. Instead, it can be helpful to break it down into small, manageable steps.

I like to focus on one debt at a time. I make the minimum monthly payment on every debt, except the one with the highest interest rate. That highest-interest debt gets all of my attention.

All of my extra money goes toward that one debt, and I regularly calculate how many months before I can expect to pay it off.

Breaking it down into small pieces helps to keep me motivated, because the end for that one debt is in sight, even if my final debt-free date isn’t.

 

Create a visual progress tracker

 

Visually tracking your debt payoff can be a great way to keep you motivated during your debt payoff journey. You’ll be able to see your progress first-hand feel excited each time you get a bit closer.

There are many printable debt trackers available for free online. When we started paying off debt, we just used the whiteboard in our living room to create a visual representation of our debt.

 

Make it automatic

 

No matter how motivated you are when you start, there will absolutely be months where you don’t feel like making those extra debt payments. You’ll find other things you’d rather spend that money on, and it’s super easy to talk yourself out of prioritizing your debt.

To plan ahead for those months, I recommend setting up automatic debt payments. Instead of creating an automatic payment for the minimum payment amount, set it up for the amount you actually want to put toward your debt to pay it off faster.

Read: 6 Easy Ways to Automate Your Finances

 

Find your community

 

Paying off a huge amount of debt can feel incredibly lonely and isolating. But the reality is that there are millions of people going through exactly what you are.

One of the best ways to stay motivated while paying off your debt is to find a community of people to share your journey with.

Whether it’s a Facebook group or debt payoff accounts on Instagram, having people to share your journey with, vent to, and celebrate wins with will be a game-changer.

 

Remember your why

 

Putting extra money toward debt each month can be discouraging. Each month, I can think of things I’d rather spend that extra money on, and it makes me want to press pause on your debt-free journey.

But then I remember why I want to be debt-free. And I picture what our life will look like when that debt is gone.

If you’re feeling discouraged, think about what comes next. How will you feel when you aren’t in debt to companies? What goals will you save for when you don’t have money going toward debt each month?

In those moments where you lose your motivation, remembering your why is the perfect thing to help you find it again.

 

Celebrate small wins

 

Just because you’re prioritizing debt payoff doesn’t mean you can’t enjoy your life. Celebrating small wins will help keep you excited while paying off your debt and will prevent you from burning out.

Decide on a specific milestone — it could be $1,000, $5,000, or any number that makes sense for your debt payoff plan. Decide ahead of time how you’ll celebrate when you hit that milestone.

It doesn’t have to be expensive, but please make sure it’s not something you do on a regular basis. It should be exciting and out of the ordinary, and something you only treat yourself to when you hit that milestone.

 

Final Thoughts

 

Paying off debt can be a long and frustrating, and it’s easy to lose progress on your way. There are plenty of steps you can take to help boost your motivation and remember why you started in the first place.