Debt: It’s a common burden that many of us carry, but it can greatly hinder our financial well-being and progress towards financial goals.
Clearing your debt requires long-term commitment and discipline, and maintaining motivation until you become debt-free can be a significant challenge. Consider the following scenarios:
If you have a student loan of approximately £43,000, it can take nearly eight years to fully repay it with monthly installments of around £450, according to the Education Data Initiative.
If you owe £10,000 in credit card debt with an 18% interest rate and aim to pay it off within three years, you’ll need to make monthly payments of £362.
Although it may seem daunting, here’s some encouragement: The benefits of becoming debt-free far outweigh the effort. You’ll improve your credit rating, enabling you to qualify for better loans in the future. Moreover, having more disposable income each month allows you to invest and build a retirement nest egg or save for indulgences such as vacations.
To help you stay focused and bid farewell to your debt, continue reading to discover effective ways to stay motivated throughout the debt repayment process.
Why It’s Hard to Stay Motivated When Paying Off Debt
Maintaining motivation while paying off debt can be challenging. It may feel like an uphill battle with no end in sight. Depending on the amount you owe, the process may require uncomfortable sacrifices that feel unfair.
However, by implementing intelligent strategies to shift your money mindset, you’ll discover that debt repayment becomes more manageable as you improve your money management skills.
If you’re determined to eliminate your debt, continue reading to explore effective techniques for staying motivated throughout the journey.
Tips For Staying Motivated Whilst Surviving Debt Recovery
Remember Why You Are Doing This
What prompted your decision to prioritise debt repayment? Are you exhausted from constantly lacking the spending money you desire and witnessing your debt grow? Does the thought of your hard-earned dollars going towards interest payments bother you? Are your financial goals slipping further away?
Regardless of your motivations, it’s important to frequently remind yourself why you’re putting in so much effort and diligently track your progress to witness tangible results.
Keep As Organised As Possible
Having a well-defined plan can make achieving your goal of becoming debt-free much easier. Consider implementing strategies such as consolidating your debt with a lower-interest loan or finding a roommate to reduce your rent expenses. Do some research into plans that you can use as a back up in the event that something doesn’t quite go to plan or you need to pay off a larger chunk of debt than originally planned. Use an IVA calculator to see if this could be a viable option, or look at other debt management schemes which you can potentially utilise in the future.
Regardless of the approach you choose, it’s crucial to create a budget that aligns with your lifestyle and set up automatic payments each month. By doing so, you won’t have to constantly worry about your bills, and you’ll also avoid late fees. Maintaining discipline and sticking to your budget will allow you to witness your debt steadily decrease over time.
Here’s a quick money tip: Traditional checking accounts typically don’t earn interest. However, there are some accounts available that provide a modest interest rate and help your money grow. Online banking institutions are often more likely than brick-and-mortar banks to offer competitive interest rates, so consider exploring those options.
It’s a common experience for everyone. We’re conditioned to work towards rewards from a young age. The key is to find a balance and not constantly indulge yourself.
There are numerous ways to treat yourself, and it’s important to discover what works best for you. Here are some suggestions:
● For every £1,000 of debt paid off, treat yourself to something you haven’t had in a long time such as drinks with friends etc.
● When you successfully stick to your budget for a month, indulge in a delicious treat.
● Once you completely pay off a debt, allow yourself a £100 shopping spree at your favourite shop.
By incorporating these reward-based milestones into your debt repayment journey, you’ll have motivating incentives to stay on track and make progress towards your financial goals.
Read Money Blogs
Daily motivation played a crucial role in my entire journey towards becoming debt-free. Personal finance blogs were an invaluable resource that I relied on throughout this process. In particular, I found great inspiration in blogs that served as diaries for individuals who were on their own debt-free journey. I could strongly relate to these bloggers, as their experiences mirrored my own.
There is nothing more empowering than reading about someone who has made significant sacrifices, faced similar struggles, and ultimately achieved financial freedom by eliminating their debt. These stories served as constant reminders that my goals were attainable and that the journey was worth it.
If you’re seeking motivation and relatable experiences, I highly recommend exploring personal finance blogs, especially those that document the debt-free journeys of others. Their stories can provide the encouragement and inspiration needed to stay committed to your own path towards financial freedom.
Surround Yourself With Like-Minded People
To stay on track with your financial goals, it’s important to surround yourself with people who support responsible spending rather than encouraging excessive expenses. Friends who enjoy frequenting expensive restaurants or shopping at high-end stores may not align with your objectives. Fortunately, there are numerous ways to socialise without breaking the bank.
Consider alternatives such as meeting a friend for a coffee or going on a hike together. Engaging in low-cost or free activities can be just as enjoyable and fulfilling. Don’t allow the pressure to keep up with the extravagant spending habits of others to hinder your progress. Remember, it’s your financial journey, and comparing yourself to big spenders will only undermine your efforts.
Listen To Financial Advice From People Who Are Where You Want To Be
Maintaining motivation to pay off debt relies on making well-informed decisions that expedite the process. It is crucial to ensure that the financial advice you seek comes from trustworthy sources. Be cautious of self-proclaimed finance “gurus” on YouTube and social media platforms, as their advice may not always be the most reliable.
If you find yourself uncertain about the steps to take in order to pay down your debt or if you need further guidance, it is recommended to seek the assistance of a financial advisor. Asking for recommendations from trusted individuals can help you find a reputable advisor who can provide valuable insights and tailored strategies to address your specific financial situation. A qualified professional can offer expert guidance to help you navigate the debt repayment journey more effectively.
Make A Life Adjustment That Will Cause Some Discomfort
By deliberately undertaking a life change that introduces some discomfort, you can ignite a powerful motivation to seek a path forward, no matter what it takes. Here are a few illustrations:
Embrace cohabitation with your parents: If you choose to reside in your parent’s basement, you’ll find yourself driven to expedite debt repayment. Although this option may seem extreme, it can serve as a potent catalyst for change.
Temporarily eliminate cherished budget categories: Consider removing a favourite expense category from your budget until you’ve successfully eliminated your debt. Whether it’s entertainment, dining out, or vacations, temporarily forgoing these indulgences will spur your determination to become debt-free.
Start a spending log/journal
Occasionally, our spending habits can spiral out of control, which negatively impacts our debt repayment progress. To address this issue, I’ve discovered a useful technique: diligently recording each and every purchase in a journal. The simple act of writing down my expenses compels me to reconsider unnecessary purchases, knowing that I’ll have to document them later. This practice serves as a powerful deterrent, bolstering my motivation to allocate more funds towards debt repayment.
Get an accountability buddy
Seek out a reliable and supportive companion, whether it be a friend, spouse, parent, sibling, or co-worker, who can accompany you on your journey. An accountability buddy is someone with whom you can openly discuss your achievements, setbacks, challenges, fears, enthusiasm, uncertainties, and inquiries. If feasible, set regular monthly meetings with this person. By having an encouraging buddy, you’ll consistently leave these interactions feeling uplifted and highly motivated to continue your endeavours.
Focus on your smallest debt
Making progress serves as a powerful motivator on your debt repayment journey. Few things embody progress more than permanently eliminating one of your debts. The Debt Snowball Method, which involves prioritising debts from the lowest balance to the highest balance, is highly effective due to the sense of accomplishment it provides. Paying off your initial small debt creates a profound feeling of achievement. These early victories can significantly impact your motivation, making a notable difference in your overall progress.
Listen to podcasts
Throughout my debt repayment journey, I made it a habit to listen to personal finance podcasts nearly every day. Among my favourites was The Dave Ramsey Show. On this podcast, I had the privilege of hearing stories from families who had successfully achieved debt freedom. Listening to their tales of triumph was incredibly motivating. It was awe-inspiring to discover that there were families facing much more challenging circumstances than mine, yet they managed to pay off their debts at a faster pace. Their stories served as a remarkable source of inspiration, fueling my determination to persevere and overcome my own financial challenges.
Earn Extra Money From Side Hustles
Accelerating your debt repayment can be achieved by finding opportunities to increase your income. Consider various avenues to boost your earnings, such as taking on overtime, engaging in gig work, or pursuing part-time employment. Not only can these endeavours provide extra financial resources, but they can also introduce you to new connections and potentially immerse you in an industry that captivates your interest. Who knows? It may even mark the beginning of an entirely new career path for you. Stay open to possibilities, as these ventures have the potential to enhance your debt repayment journey while opening doors to exciting new horizons.
Scroll Instagram for Your Favorite Debt Free Accounts that are Actually Doing It.
There is a deep appreciation for the #debtfreecommunity on Instagram because its members are actively taking steps to achieve financial freedom. It’s one thing to possess knowledge about debt repayment strategies and what needs to be done, but witnessing others in action as they diligently follow their plans is an entirely different experience.
Following along with their journeys is not only enjoyable but also serves as a tangible reminder that progress is possible. It’s incredibly inspiring to witness individuals who began their paths burdened by substantial debt gradually transform into debt-free individuals right before your eyes. Such experiences help reinforce the belief that achieving financial freedom is indeed attainable.
Realise Motivation Has Nothing To Do With It.
Frequently, people attribute their inaction or lack of progress to a supposed lack of motivation. They use this excuse to justify their inactivity. However, the truth is that the key differentiator between those who successfully eliminate their debt and those who don’t is not their level of motivation. Motivation, in fact, plays a minimal role. Regardless of your current motivation level, one factor consistently drives your actions: discipline.
In simpler terms, you can’t always rely on motivation, so cultivating discipline becomes crucial.
Being disciplined means following through on tasks you know you should be doing, even when you don’t feel like doing them. It involves working overtime, resisting the temptation to eat out when there’s food at home, adhering to a budget, creating a budget in the first place, avoiding stores that encourage unnecessary spending, and saying no to extravagant vacations.
Discipline empowers you to take action, even in the absence of immediate motivation.
Ultimately, achieving success with your finances only requires two fundamental elements: (1) knowledge and (2) discipline. So, forget about relying solely on motivation. Embrace the mindset of pushing through and taking action, even when it feels challenging. Remember, this state won’t last forever, even though it may sometimes seem that way. You have the strength to overcome it. You’ve got this!