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How to Stay Motivated With Debt Repayment

Last Updated: June 22, 2020 BY Jordann - 21 Comments

Disclosure: This post may contain affiliate links, meaning I get a commission if you decide to make a purchase through my links, at no cost to you. Please read my disclosure for more info.

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Find out how tos tay motivated with debt repayment. This is a great list.When I graduated from University, I had a lot of debt. I paid for my school myself and although I’d worked every summer and managed to save a good portion of my earnings, I still somehow managed to rack up $26,000 in student loans. After graduation, I bought a car. I wasn’t a complete dummy about it, I didn’t buy a new one, but I did still manage to spend around $12,000 on a lightly used VW Golf.

So, I went from University student making no debt payments, to recently graduated entry level worker devoting 25% of her paycheque every month to debt. I had $38,000 of it weighing on my shoulders. Then, I got this crazy idea that I was going to pay it all off.

This idea came to fruition from the best possible intentions. I knew that my job wasn’t overly secure, and I didn’t like the idea of having so many debt payments to make should I ever lose it. I also knew that I didn’t want to be over 30 and still paying off my student loans.

I started scheming ways to put more money towards my debt, in order to shorten my total time to debt freedom. The progress was slow going at first (and still is) and I quickly found myself losing motivation. The problem was, I wanted to be out of debt now, and I didn’t want to wait three or four years for all of this sacrifice and extra payments to pay off. Staying motivated was tough, but I’m happy to say I’m still on track with my debt repayment. Here’s what I’ve done to stay on the wagon:

Set Goals

Last year was my first full year of debt repayment. In order to stay motivated, I declared a goal to pay off $7,500 in debt principle. I declared it in a public form (on my blog) and then set about trying to achieve it. Setting this goal really motivated me to throw everything I had at my debt, and in the year 2012 I paid off $16,363 worth of debt.

Celebrate Milestones

Setting yearly goals is all well and good, but they take a long time to reach. Due to this, I also made sure to make a huge deal about achieving shorter term goals. Every time either my student loan, my car loan, or my total debt owing decreased by $1,000, I would make sure to crow about it in my monthly net worth updates. Zeroing in on this progress really highlighted the fact that I was making progress, and that I wasn’t throwing away over half of my total income on extra debt payments, to no avail.

Keep a Debt Repayment Timeline

I have an excel spreadsheet that I use to calculate my date to debt freedom. It breaks down my debt owing by month, from today until the day I’m debt free. It includes the daily and monthly interest charges, as well as regular and extra payments I make or am planning on making. This spreadsheet is completely customizable and every time I make an extra $100 from staff writing or my Mom gives me a couple of bucks for my birthday, I add that to my debt payments, so I can watch my debt free date inch closer and closer to the present.

When I first started messing with my debt repayment schedule spreadsheet, it projected my debt free date to be in 2015. Now, I might be able to pull off debt freedom by the end of 2013.

I also keep a separate, “best case scenario” spreadsheet that includes things that I can’t really predict with 100% certainty. In this spreadsheet I include projected raises, tax returns, bonuses, freelance income, etc. This spreadsheet shows me how quickly I could get out of debt if everything works out perfect, and motivates me to keep throwing everything I possibly have at my student loans.

Know Your Daily Interest Charge

When I first started paying my student loans back, I was paying a $26,720 balance at 5.5% interest. That works out to about $4.10 per day in interest charges. That’s so much money to just throw away every single day. Now, it’s down to $0.77 per day. Much more reasonable, but still a lot worse than $0 per day. Knowing that I was throwing away so much money on interest charges is a huge motivator to get rid of that debt as fast as possible.

Keep Your Eye on the Ball

The main reason I want to be out of debt is freedom. I want the freedom to travel if I want without worrying about making my debt payments. I want the freedom to quit my job if I’m unhappy without fear of defaulting on my loans. I want the freedom to invest my money and develop a comfortable cushion to fall back on, instead of worrying, constantly, that the floor is about to drop out beneath me and my debt is going to pull me under. I want that freedom, and making the sacrifices I’ve made in the past 16 months to pay down almost $25,000 of my debt in 16 months on a recent graduate’s income will be worth it.

I’ve got $13,182.00 left to go. Motivation, don’t fail me now.

What motivates you to pay off debt? What is your goal? I want to know!

How to Stay Motivated With Debt Repayment

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21 Comments
Filed Under: Debt Tagged With: Debt

Comments

  1. DC@Young Adult Money says

    March 21, 2013 at 5:46 am

    I'm in the same boat, Jordann. Graduated with a lot of student debt, and your last paragraph really hit home. Getting out of debt really does free you up to pursue the things such as travel or new job opportunities that you otherwise may not be able to pursue. I have thought many times about what it would be like to have the student loans (and maybe even the mortgage??) gone and the cash flow I would have.
    My recent post 5 Ways I Make Side Income

    Reply
  2. FrugalRules says

    March 21, 2013 at 6:35 am

    What kept me going was the first two points you mentioned. I had a goal and just made up a plan around that in order to help keep me focused. Celebrating those milestones is huge as well as it encouraged me to press on and continue to knock down that debt. Keep up the great work Jordann!
    My recent post Financial Advisor Compensation – Why it Matters

    Reply
  3. evencheap says

    March 21, 2013 at 6:35 am

    What motivated me to pay off my mortgage and car loan was that I wanted to have more control over my money. Now I can do whatever I want with those old payments.

    Reply
  4. Gina says

    March 21, 2013 at 7:09 am

    Good for you, Jordann! Our big mistake was paying the minimum all these years because "other expenses" were more important. We're under $15,000 now and on track to pay it off by the end of the summer. That's what is keeping me going now, that we're so close.

    Reply
  5. Lance at Money Life and More says

    March 21, 2013 at 8:08 am

    We are motivated just to get rid of the ugly student loan debt my fiancée has. It will be nice to have the extra cash flow, but the weight of knowing the loans are there is the biggest thing we want to get rid of.

    Reply
  6. Holly@ClubThrifty says

    March 21, 2013 at 8:16 am

    $13K isn't so bad, Jordann! That's awesome and I think you're doing a great job! It does help to keep your eye on the prize!

    Reply
  7. morgaine80 says

    March 21, 2013 at 8:34 am

    I have to admit that this has been my main problem lately. I've been paying down debt for 10 years, its been that long since I graduated University. I have paid off my student loans, its the consumer debt I'm working on now. I've been working on agressively paying that down for the last 3 years. And although, I'm pretty close ($3900 left out of $21K) I feel like its taking *forever*.

    I really like your idea of keeping an eye on the debt free date and whenever you throw money at your debt you see that date come closer to the present (and reality) that might help me keep more motivated. Thanks!

    BTW, you're doing awesome! Keep up the good work 🙂

    Reply
  8. moneybeagle says

    March 21, 2013 at 8:35 am

    The secret to reaching any big goal is to break it down into smaller, more manageable goals. The failure to do so is why most people fail at their New Years Resolutions (how many are still working on those? probably not many). We set big lofty goals, and lose motivation when the end is too far out of sight. Setting smaller goals will keep you motivated along the way.
    My recent post Would We Have Been Better Off Getting A Roof Before We Needed One?

    Reply
  9. Alan@escapingmydebt says

    March 21, 2013 at 8:39 am

    Very good points. I just set my 2013 goals yesterday. First time I have tried this. Without it we have been doing ok but hoping that with it will help keep us motivated even more. You mention to celebrate milestones. The only milestone I will be celebrating is when we hit $0 debt. Keep up the good work, you are almost there.
    My recent post Goals for 2013

    Reply
  10. MakingSenseofCents says

    March 21, 2013 at 8:39 am

    Lately we have been on such a good roll with paying off debt. It's almost fun now (WOW I AM DORKY) because I love seeing the debt tick away. You are doing great Jordann!

    Reply
  11. My Multiple Incomes says

    March 21, 2013 at 8:54 am

    Great tips! It's always good to set a timeline for your debt repayment because you feel more motivated the nearer you get to the date you'll be able to finish paying your debt, but make sure that you are working on a payment scheme that is really attainable.
    My recent post Comment on Guest Posting in a Changing Online World by KC @ genxfinance

    Reply
  12. The Norwegian Girl says

    March 21, 2013 at 9:16 am

    I still have one more year left as a student, but I`ve already started planning the repayment! I really want to be ready for when it starts, and have a goal, so this post was really inspiring!

    Reply
  13. @SavvyFinLatina says

    March 21, 2013 at 9:56 am

    Great tips!!!I think it's so great you are keeping your eye on the ball. It's exactly what I do. I remind myself every morning and at night what I am trying to accomplish. Like you I'm not sure how to start earning extra income, but I know I hustle I can do it. I'm looking to add $1,000 per month of extra income minimum.
    My recent post Immigration is Positive For Everyone

    Reply
  14. Nick @ AYoungPro.com says

    March 21, 2013 at 2:59 pm

    I love your tips. I think the reason that I had success when paying off debt is because I used the Debt Snowball method. By getting rid of the smallest debts first you build momentum and get victories along the way.

    Reply
  15. C The Writer says

    March 21, 2013 at 7:23 pm

    This is nice. I'd love a post in the future about how someone who has no way to pay off debt can still stay motivated.
    My recent post When people are out of touch and don't get it.

    Reply
  16. kimateyesonthedollar says

    March 21, 2013 at 7:34 pm

    Great tips. It's very hard to stay focused sometimes, but the end goal is worth it. I think it is very important to celebrate the milestones. It keep you from getting too burned out.
    My recent post Should You Transfer Debt to a Low Interest Credit Card?

    Reply
  17. WilliamBitetheBullet says

    March 22, 2013 at 12:45 am

    Great job, Jordann! There is one other thing my wife and I also did to keep us motivated: we gave ourselves a reward for reaching milestones – a dinner or something like that. Yes, it's counterproductive on the surface, but it kept the ultimate benefits fresh in our minds. In the beginning it was a simple meal at McDonalds, because that was all we could afford. Sometimes, even now, we'll do a Mickie Dees run to remind ourselves of those days, and keep the resolve fresh to never end up there again! 🙂
    My recent post Are You An Investor?

    Reply
  18. studentdebtsurvivor says

    March 22, 2013 at 8:12 am

    Woo hoo for all that debt payoff! Excel was my best friend when I was paying off my student loans, that and the online debt calculators. I played around with the numbers all the time to figure out how much extra I'd need to pay off each month to drop my total faster.
    My recent post I’m Not Cheap, You’re Broke!

    Reply
  19. @LifeDollarSense says

    March 24, 2013 at 9:22 am

    I am right there with you Jordann. I have been paying off my student debt for the last 1.5 years. But I refuse to give up for the same reasons you listed. I don't want them to follow me for the next 30 years, constantly paying for the past. Staying motivated is key and tracking my progress has helped a ton. I have friends that have focused on their student loans only to get frustrated and come to the conclusion that they are "going to have the loans forever anyways, why continue to stress over them." Good luck, you will get there!
    My recent post A Dose of Downton Abbey

    Reply
  20. Annie B says

    September 1, 2014 at 8:28 pm

    This was a great article! my husband and I started out debt payoff mission when we were at a balance of $147,000 in debt. I could explain all the reasons why I owed $147,000 in debt but i’ll spare you the details. At any rate that was 2/2/12. Today we owe just $44,000. We are so close to being debt free that we can barely talk about it without going right into dream mode haha. We’ve worked so hard and now that we are getting closer I began to lose my motivation. It’s tiring to never see what your money can do because it’s always being paid towards debt. That’s why I google searched “motivation to pay off the rest of my debt” and your article popped up:)

    We want to pay off our debt so we can live a big life with big impact on our surroundings, with big adventures and with big memories. I want to do everything I imagined in this life. I want to live a life by design not be default. We are so close. When my debt is gone my money is going to work HARD for me!

    Reply
  21. Dyana says

    July 27, 2016 at 10:32 pm

    Hey there! I’m just starting to really knuckle down on my debt, and this is really helpful! Would it be possible to share the spreadsheet you use for tracking this?

    Reply

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Hello and welcome!
My name is Michelle and I'm the author/owner of Making Sense of Cents. Learning how to save money and make more money changed my life. It allowed me to pay off $40,000 in student loans, start my own business, and I now travel full-time.

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