M is for Money

This is Part 7 of Deliverance from Debt: Part 1, Part 2, Part 3, Part 4, Part 5, Part 6

Keeping focused is the hardest part of getting out of debt. Many people never finish the journey because they get discouraged or distracted along the way. Knowing that, how can you keep today’s commitment going strong into tomorrow? This is where the real work begins. This is where you use all of the tools that you’ve learned - track your spending, use your budget and follow your plan of attack. You need to keep this focus all the way to the end.

It’s easy to get distracted, new shoes are calling your name, there is the big screen TV for dad and the kids are always wanting more. It’s easy to toss in the towel, getting out of debt is a war of attrition. You need to be prepared, your resolve will be tested at some point. You must keep focused on your goal and avoid the temptation to quit.

Track Your Progress

Track and record how much debt you’ve paid off by updating your debt tally once a month. Note how much debt you paid off the preceding month and how much you’ve paid off since the start. Month to month the changes seem small, but over time your progress becomes apparent. Make it a game, how much can you pay off this month. Try to beat your score from last month.

Speed up the Progress

Motivation is difficult to keep going forever, try to get across the finish line faster. In addition to the tips I shared last week, consider using a 0% balance transfer for your credit card debts, refinancing loans to a lower interest rate or consolidate your debts using a personal loan or equity line of credit. Look for ways to lower your interest rates and pay every penny you can to debt.

Reward Yourself

Set up a reward system to celebrate important milestones on your journey out of debt. You should treat yourself when you pay off an account or a large part of your debt. If the whole family has been sacrificing for the cause, choose something that will make everyone happy. Don’t go crazy of course, many people have restarted the debt cycle by rewarding themselves too much.

Remind Yourself

Why do you want to be debt free? What is your motivation? What will it feel like when you’ve paid off your debt? Make a list of the reasons why you are doing this and place it in a prominent place where you will see it every day.

The Obstacle Course

Getting out of debt isn’t easy, there will be obstacles along the way. You might lose your income and cars always break down when you can least afford it. It’s your reaction to these obstacles that will determine whether or not you’ll succeed. You have to rise to the challenge and continue on.

Plan for the Future

Focus on your life after debt, what goals have you put off because you are in debt? What dreams can you fulfill once your financial life is in balance? Plan for the future and use it as motivation.

Commitment

Back in the very first post of this series I talked about the importance of commitment. It may take you 6 months or 6 years to get out of debt, that’s a long time for things to happen. I carried a credit card balance for 11 years, I would pay it down only to run it back up again. Saying you are committed is easy, now you have to follow through.

Part 8: A.D. - After Debt