Whether you’re paying off your mortgage, eliminating credit card debt, or repaying your student loans, long-term debt can feel like an insurmountable obstacle with no end date in sight. However, there are ways to maintain your morale and stay on track to boost your motivation and achieve financial freedom.
Create a Repayment Plan
Two of the most popular methods to eliminate your balance are the debt snowball and debt avalanche. With the debt avalanche method, you work toward paying off the balance with the highest interest rate first. Continue to pay the minimum due on all your debts, but throw any extra money you have at the loan or credit card with the steepest interest rate. Once you pay that one off, roll that payment and extra money into the debt with the second-highest interest rate, and so on until you are debt-free. The debt avalanche strategy provides a path to help you pay less interest over time.
The debt snowball is similar in practice but shifts the focus to paying off the smallest balance first. This can help with motivation as you see these debts disappear quickly.
Break It Down
While it’s important to take stock of your current financial situation, get familiar with the exact amount of debt you carry, and work out a long-term goal to get debt-free, your debt repayment journey can seem daunting if you compare where you are now to your ultimate goal. Make it more manageable by breaking down your long-term target into smaller, measurable objectives.
Change Your Lifestyle
If you’re serious about paying off your debt, you must change your lifestyle. This can involve cutting your entertainment budget, learning to cook at home, or getting a roommate to share living expenses. You can also use it as an opportunity to expand your social circle by trying low-cost activities, such as hiking, book clubs, or attending free community events.
Remind Yourself Why Getting Out of Debt Matters
Stay motivated while getting out of debt by reminding yourself why you’re working so hard toward repayment. As you pay off debt, you free up more money to spend on other things like building your savings, moving into a larger home, or traveling. Paying off debt also builds good credit, giving you access to better loan terms if you need to borrow money in the future. For added incentive, check your free credit report periodically to watch how your score increases.
Challenge Yourself
Make paying off debt more enjoyable by turning it into a personal challenge. Vow not to spend any money on non-essentials for a week. Or pick up extra shifts to meet a short-term goal of making an extra payment one month. Actions like these keep you thinking creatively while making a big dent in your debt.
Keep Track of Your Progress
Tracking your progress is imperative to staying motivated. Record every payment and watch your balance decrease. Consider using a budgeting app or another financial tool to help you meet your goals and avoid overspending.
Partner Up With Friends on the Same Journey
Stay accountable on your debt repayment journey by working with a partner with similar goals. Debt can feel like a burden that isolates you from others, whether you opt out of social events to save money or feel embarrassed by your situation. An accountability partner can help you stay on track while providing the support you need to feel less alone.
Celebrate Small Victories
Making progress on repaying your debts is an ongoing process that deserves periodic rewards to celebrate your dedication and hard work. Build some leeway into your budget for small treats when you reach milestones. Choose something meaningful to you, like a new potted plant, a dinner at your favorite restaurant, or a new outfit that makes you feel great.
Use Visual Reminders As Motivation
Another great tip for debt repayment success is using visual motivators, such as a vision board that features photos of your rewards for paying off your debt. Print out pictures of your dream home or ultimate vacation and hang them in a prominent location to remind yourself what you’re working toward. A repayment chart is another great tracking tool that shows your progress.
Ask for Help
Occasional setbacks are normal. The trick is not to let them consume you. If you run into trouble, reach out and talk to a friend who understands. Or speak with an expert to receive personalized financial advice tailored to your situation. Talking to someone when you’re feeling overwhelmed can make a big difference in your mood and continued success. If you have questions or concerns about managing your finances, consider consulting a reliable professional with extensive knowledge and experience to guide you in the right direction.
Keep Your Eyes on the Goal
One of the upsides of planning out your debt repayment is that you will have an estimated end date to become debt-free. Marking this date on your calendar is a powerful motivator to keep you focused. Have some fun by thinking about how you plan to celebrate once you’ve reached your ultimate goal.
Don’t let your current debt obligation get you down. With a smart repayment strategy and some hard work, you can eliminate your debt and feel good while doing so.
You might also be interested in: How Much Should You Really Spend on Rent or a Mortgage?
