Paying off debt can be a challenging endeavor, particularly when it appears to be a never-ending process that’s been going on for a year or more. Forgoing luxuries and enjoyable experiences like shopping sprees or vacations can be tough, until you experience the liberating sensation of being debt-free. So, how do you maintain the drive to clear off your debts?
Pay Off Debts in Segments
Developing a strategy for clearing your debt is crucial, but make sure to reward yourself in small ways when you achieve key targets. Our marriage commenced saddled with credit card debt, car loans, and student loans. After three months of ignoring our financial obligations, we decided to draft a financial recovery plan.
Within six months, we successfully cleared a $5,000 credit card debt. By the subsequent year, our car loan was paid in full. Currently, we’re targeting approximately $22,000 in student loans. With such a substantial debt, we anticipate a few years before it’s fully paid off.
So, how do we maintain a high motivation level? We split the debt into smaller parts. As the student loans comprise various smaller loans and one larger loan (seven in total), we celebrate each time a loan is paid off. We also commemorate clearing the initial $2,000, which lowers our debt to less than $20,000, and each subsequent payment of $5,000 towards the student loan. I eagerly look forward to clearing the last $5,000!
Grant Yourself Rewards
Breaking down debt makes it manageable, but striking a balance is vital, particularly with long-term debt. It’s daunting to remain motivated when it feels like your entire life consists of sacrifice.
Our intended rewards include traveling, which we had given up during the first two years of our marriage to better manage our debt. While we could pay off our debt faster without traveling, we’d be sacrificing these beautiful years before we have children. Once children come into the picture, traveling will become even more challenging.
Accelerate Debt Clearance
When two incomes are all you have, the continued monthly sacrifices to pay off debt can seem daunting. Stay motivated by escalating your debt payment speed. Find ways to earn extra income, take up an additional job, and strive to contribute as much as you can. This way, you can pay off your debt swiftly and not dread years of repayment.
It won’t be easy to maintain the motivation to clear your debts, but taking one step at a time will make the journey easier. You’ll be rewarded with an amazing sense of accomplishment when you’re finally debt-free! Adding my personal experiences from SmartAsset.com.
