Debt Reduction

When you decide to take your debt journey seriously, you might feel a burst of energy and motivation. You’re ready to slay your debt. Unfortunately, that motivation doesn’t last long. I know, because I paid off debt for many years. Over the course of nine years, I paid off $81,000 in student loans. I only got serious about it after graduating from New York University, when I still had $68,000 — which I paid off in 4.5 years. In order to do that, I had to make four-figure payments for years. When you can’t pay off debt quickly because your balance is so large, debt fatigue can creep in. Here are five motivational hacks to help you pay off debt.

1. Write your debt number on a post-it

Paying off debt requires you to shift your behavior as well as your mindset. In order to do that, you need to keep your debt top of mind. You can’t just rely on willpower or motivation. You need to rely on discipline as well as gentle reminders.

One hack that worked for me was to put my debt balance on a post-it. I took that post-it and put it on my credit card. So every time I wanted to spend money, I’d see the balance looking back at me. At that moment, I had to ask myself if the purchase was really worth it. This hack kept me from making mindless purchases and kept me going because I was so determined to see that number go down!

2. Make a debt-free dream list

Debt fatigue is difficult to deal with because you’re so overpaying off debt. One thing that kept me going when I wanted to give up was creating a “debt-free dream list”. On that list, I wrote down all of my dreams and the things I wanted in my debt-free life.

I wrote down that I wanted to be self-employed, move back to LA, get cats, and take my mom to Italy. At the time, I was living in Portland, Oregon and the weather didn’t agree with me but I knew I needed to stay to take advantage of the low cost of living.

I was also desperate for my own cats and to have more adventures. But I went back to being disciplined and knew that a little bit of hard work now would mean an easier life later when I was older.

Do you want to be a younger person in debt or an older person in debt? I think you know the answer. So for me, I sacrificed and hustled for years and kept in mind all of the things I would have and pursue once I was debt-free and had a positive net worth.

You can create your own debt-free dream list by thinking about all the things you will do or items you will buy once your debt is completely gone.

3. Use Pinterest/Instagram to motivate you

Writing down your debt-free dream list is one way to state what you want. But to take it to the next level, you can use Pinterest to motivate you. Create a board that showcases images and articles that keep you going. Check out these funny debt free quotes.

You can also use Instagram and other social media outlets for motivation. Only follow accounts related to your dream. Use the ‘save post’ function to create a gallery of images that support your debt-free dream list. Instead of using social media to be tempted by ads or getting FOMO, you can curate your own feed to help you reach your debt-free dream list and keep going when times are hard and motivation is lacking.

4. Make yourself accountable

I started my blog DearDebt.com to write about my journey of paying off debt. Every month, I’d write a recap on the side hustles I did as well as how much I paid off in debt that month. The blog was a wonderful accountability tool that helped me pay off debt.

You can make yourself accountable by starting a blog. Think that’s too much? Create a microblog on Instagram and search #debtfreecommunity. You can also find a friend you can connect with who also wants to pay off debt and set up regular intervals to check-in. You can get paid to write articles and blog posts or even testing apps and writing reviews.

Having external accountability can help you maintain progress. You want to show up, not disappoint the other person, and cheer each other on. Find what works for you while striving to be consistent.

Read our article on why you need to conduct a midyear budget review and the steps in getting one done today.

5. Try these different methods to pay off debt

If you research ways to pay off debt, it’s likely you’ll come across two common methods of doing so.

Both require you to pay the minimum on all of your loans but states you should put your extra money toward the highest interest rate (avalanche) or the lowest balance (snowball). The snowball method is very popular and can be a good option as it boosts motivation as you pay down small balances. The avalanche method can save you money on interest, which could mean paying off debt even faster. This article shows a more detailed comparison of both methods.

You can use this FREE tool from Undebt.it. They provide a mobile-friendly snowball/avalanche calculator app to help you live debt-free. The payment is easy to follow so you can finally eliminate your debt!

Two other options that I shared in my book Dear Debt, are about engaging your emotions to help you pay off debt. One option is to pay off the debt that makes you angry. Maybe you have debt from a divorce or getting scammed by a friend and it makes you mad. Anger is typically not a great emotion and doesn’t help move you forward. But if you channel that into debt repayment, it could fuel your journey.

The other option is to pay off the debt that will offer the most peace of mind. If you have a loan from a family member that is causing tension or a credit card bill that keeps you up at night, preventing you from having good sleep, pay that off first.

Paying off debt is an emotional process and these are two ways to hack your emotions in your favor rather than fall in despair.

Pay off debt now

Paying off debt is never easy. It takes a toll on your emotional and financial life and maybe even your relationships, too. That’s why it’s important to do whatever you can to get out of debt ASAP and hack your motivation so you can keep going.

Debt can wreak havoc on you and your family. Even if you think you can handle it, you’ll often find that debt overwhelms you. You can even find yourself in a situation of wage garnishment where your earnings are withheld to pay off outstanding debts. However, there are steps that you can take every day that will help you to make a dent in your debt. Even if you cannot pay it all off at once, making these simple moves will help you regain control and get you and your family on the right track. Some are preventative, while others will help you keep your debt from getting worse. But they are all simple and useful.

Read Your Mail

If you’re the type of person that ignores your mail for days at a time, you could miss important information. Many companies will contact you about your debt through the mail. While some of these are scams, many are real. Depending on the type of debt you hold, your doctor, credit card company, or even the government might try to reach you. The IRS conducts three different types of tax audits: field audits, office audits, and mail audits. If you are being audited and don’t open your mail, you could get in big trouble.

Pay with Cash

As much as possible, you should pay for purchases with cash. Cash keeps you on a strict budget. Once it is gone, it is gone. There’s no way to overspend when you only have cash. While this might not be realistic for all situations, it can be very useful for things like grocery shopping or spending for fun. Keeping some cash in your home is a good measure for emergencies anyway, but you should make paying for purchases with cash part of your daily routine. Then you won’t be tempted to put unnecessary purchases on your credit card.

Stick to a Budget

You need a budget. You need to know exactly how much money your family spends each month and how much you bring in. Otherwise, you won’t know how much you can afford to spend. Sit down and make up an honest budget. Consider all of your expenses. Some will be the same every month while others will be more flexible, such as groceries. If your expenses are too high, your budget will show you how much you need to earn in order to make up the difference. Check out our 5 steps to a perfect mid-year personal budget review.

A budget is useful for everyone, but it is extremely useful for people on a limited income. About 8.2 million people receive disabled-worker payments from Social Security. In some cases, it goes directly to them. However, 104,000 spouses and 1.4 million children receive them to help their family. If you rely on a small income like that, you have to know where it is going in order to avoid building up debt.

Don’t Carry a Balance

If you have to use credit cards, pay them off at the end of each month, or at your earliest convenience. There are indeed benefits to using credit cards. Many have rewards programs that you can take advantage of. Cashback programs, discount opportunities, or free airline miles can save you a lot of money if you use your credit cards wisely. However, you should make it a priority to stay on top of your payments. Always turn on autopay. If you allow a balance to stay on your card each month, you’ll end up accruing interest that will quickly wipe out any cashback or point received. Your carried balance may also be reported to credit agencies and have a negative impact on your score and debt to income ratio.

Having uncontrollable debt can be devastating. It can be difficult to clear your mind when the reminders are part of your daily life, and you may feel overwhelmed. Take it one day at a time, and rather than hoping for a miracle, think of creative ways in which you can put your skills to use and bring in additional income.

5 Motivational Hacks to Pay Off Debt