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Staying Motivated While Paying Off Debt

Updated on April 1, 2013

According to this article on MSN Money, 43% of Americans spend more money than they earn, and the average household carries $8000 in credit card debt. I believe the chances are pretty good that if you have credit card debt, you probably also have either student loans or car loans, or maybe both. The smart financial move to make would be to pay off all of your consumer debt as quickly as possible. If you can get your debt paid off, you will actually have money of your own each month to do as you please, instead of making payment after payment to someone else. But how do you stay motivated to pay off debt, especially when it could take years?

I believe the first thing you need to do in order to pay off debt is to make a list of all money owed, which should include who you owe money to, the amount, the interest rate and finally the monthly payment. Put these in order based on interest rate, starting with the highest. Put this list somewhere that you will see it on a daily basis. This will definitely provide some motivation to cross some things off your list.

I believe that a person should be working as hard as they can to pay off their debt. I think that they should cut out all the extras while they are getting out of consumer debt. You need every extra penny to send to your debt, so that you will be done with it sooner. I also know that it can be pretty hard to stay so focused on a goal when it might be months before that first debt is gone.

If you have a bunch of small debts, you might consider paying them first. Getting the smaller debts out of the way will make managing your finances easier (less bills to pay and keep track of each month), will free up more money each month (that minimum payment) and it will provide a morale boost that will help you stay motivated.

I also think that you should have some built in rewards for meeting different goals along the way. Some people keep a jar of wants and they pull one from it when they are rewarding themselves for meeting a goal. Some people keep a priority list of things they want and just go down the list as they meet their goals. Some people will reward themselves with something that they cut from their budget in the beginning. For example you might have given up eating out or getting your nails done as part of your debt repayment plan. When you have met a certain goal you might consider rewarding yourself with a manicure or a dinner out.

So how do you determine when you should get a reward? Well it really does depend on your financial situation. If you are behind on your bills and can't even make the minimum payments, then there is no money for rewards until you are current on everything and can make more than the minimums. Your rewards have to be paid for with cash. You are trying to stay out of debt here; you cannot put your reward dinner out on a credit card.

Some people reward themselves when they have paid off a debt completely. I think this is a good plan! For others, they might only have 3 debts, but the total might be $50,000. It will be a long time before they ever get a reward. This means they might lose their motivation long before a debt is paid off. For people in this situation, try setting a dollar amount to shoot for. This will depend on how much you have to throw at your debt each month.

If you can put $2000 towards your debt each month, then you need to set your goal at $5000 or so. If you can only put $100 extra towards your debt each month, then maybe for every $500 extra you put towards your debt you could get a reward. You want your reward to be something that you have to work for and something to look forward to. If you reward yourself too often, then it might become a habit that you don't need to have right now and it also might take too much money away from your debt repayment plan. The reward should motivate you to pay off your debt as fast as possible and be a little celebration when you hit milestones.

Another way to stay motivated is to keep the end result in sight. Think frequently how nice it will be to not have to make all those payments each month. I know when we had our $400 car payment it was always nice to dream about actually being able to keep that $400 each month and not giving it to someone else. As you get closer to your goal remind yourself how miserable you were when you owed a bunch of people money all the time.

Every time you make a payment remind yourself how great it will be when you can spend that money on something you want, not something you bought 6 years ago. When you get a windfall (unexpected money, large or small) think of all the things you could do if you didn't have debt. When you are paying off your debt you can't (shouldn't) spend extra money on wants, but on your debt. Staying motivated is very important when you are tackling such a large and important task like getting out of debt. Find some little things you can do that will help you stay focused and motivated and I bet you will pay off your debt even faster.


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    • esocial profile image


      10 years ago from California

      Small rewards along the way help. A walk with your spouse, a picnic in the park with family and friends ...there are many "free" rewards that say it all :) Nice hub.

    • Chaplain Paul profile image

      Chaplain Paul 

      10 years ago from San Diego, CA

      Our goal is financial survival in San Diego. One of my nephews recommended we check out Dave Ramsey on Fox Business Channel. Tempted to think, yeah, right, 40 years too late.

      I Just finished Dave's book entitled The Total Money Makeover. No such thing as 40 years too late! We can do Debt Free living even in San Diego.

      Much of what you say is in line with the recommendations of Dave Ramsey regarding getting rid of credit card debt. Thanks.

    • Dottie1 profile image


      10 years ago from MA, USA

      Very informative and helpful hub.

    • proudgrandpa profile image


      10 years ago from Charlotte, NC

      Hi Jennifer, I want to underline one very important thing you stated. Be real sure that you celebrate each goal in a meaningful way that just reinforces your next goal. As you have shown us so many times there are lots of ways to have fun and not spend money.

      I was once in a seminar and a brave lady admitted that she sometimes listed stuff on her to-do list that she did every day anyway but she said it felt sooooo good to check things off as accomplished that it kept her motivated. Good hub, Thanks NEIL

    • monitor profile image


      10 years ago from The world.

      Keep up the good work. Let's get rid of unproductive debt.

      Your fan.



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