Fighting Debt – From Small Steps to the Big Picture.

Some people talk about “˜climbing out of debt’ like it’s a pit, while others say they’re “˜buried under a mountain of debt’. Either way, the top can seem a long way off when you’re right down at the bottom, peering up at the promise of a debt-free future.

Perhaps the most off-putting thing about our debt problems is the sheer scale of them. It’s hard to stay motivated long enough to reach the top, unless you learn to:

  • take it one step at a time
  • appreciate what your sacrifices are achieving
  • stay focused on (but not daunted by) the big picture.

This should make it easier to stay focused, leading to a “˜virtuous circle’ of better results and higher levels of motivation.

One step at a time

Let’s say you’re paying off four separate debts: you’re managing the minimum payments and overpaying wherever possible.

Whether you focus those overpayments on the highest-interest debt or the smallest one, you’ll probably make better progress if you focus on realistic, short-term goals.

Make sure you write down exactly how much you owe at the start, and set yourself concrete targets. If it helps, draw up a ticklist ““ things like:

  • 10% of my entire debt gone
  • $500 paid off this debt
  • only $1,000 left on this card
  • just three debts left.

When you tick something off, reward yourself.

Appreciate your sacrifices

Eating out, buying CDs, taking holidays”¦ whatever we want to spend our disposable income on, it isn’t easy to give it up, especially when each small sacrifice has such a tiny impact on the overall debt. Denying yourself a luxury once or twice might not be hard, but doing it for years takes a lot of discipline.

So keep track of the sacrifices you make. More important, keep track of what they’re helping you achieve. If you stay away from the mall or turn down a night out with friends, figure out what you would have spent, and put it aside there and then, whether you’re moving numbers between bank accounts or putting real cash in a box.

You’ll be able to say things like:

  • “Not going skiing last week let me pay off 20% of my credit card bill.”
  • “Not going to the bar tonight will take my overdraft down under the $1,000 mark.”
  • “I can pay my dad back if I just take a smaller holiday.”

The Big Picture: life after debt

In the days before debt, your entire disposable income was yours to use as you saw fit. Next time you’re tired of economizing, just picture how good it would feel to be like that again.

However good it feels to go shopping, buy music, eat take-aways, and so on, being debt-free is sure to feel a lot better. So remember that every single luxury you give up is taking you one step closer to a debt-free existence.

The closer you get, the better you’ll feel, so set yourself targets and stick to them. When your debts are gone and your savings account’s looking healthy, you’ll be glad you did.

Written by Melanie Taylor

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Comments (4)

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  1. I love the reminder that there is a reaon why we are getting rid of our debt. It is not just because it is a ‘good idea’ it is so we can have a better life in the future. So we can have more money to spend on the things we love in the future. Sacrifice now to get more later. I like the strategy and it is one almost everyone should employ. Thanks for the post.
    As for me I am a struggling entrepreneur and although I do not have debt I am taking my business forward one step at a time. It is a huge mountain to climb building a business (and an online one) but I have small goals where I will celebrate. Recently I received my first paycheck from affiliate sales. This was a great achievement for me

  2. […] Fighting Debt – From Small Steps to the Big Picture. […]

  3. […] featured article is from My Two Dollars “Some people talk about “˜climbing out of debt’ like it’s a pit, while others say […]

  4. Once you get into the routine of a more frugal lifestlye, it is actually not too much of a problem, and you certainly enjoy the little things more on the odd occasion when you treat yourself knowing you have saved for it.