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