How to Stay Motivated While Paying Off Debt

stay motivated while paying off debtMany people have hundreds of thousands of dollars of debt – including student loans and mortgages! This means that many, if not most, debt repayment plans will take years to complete. It can become extremely difficult to stay motivated while paying off debt!

Below are some tips that work well for most people that I speak with regarding the idea of being motivated while getting rid of debt:

Set Smaller Goals

It may become overwhelming to look at that large number each month. If this is the case for you, then you might find it useful to breakup your debt into smaller goals.

Whether you do it by account (Citibank, Credit Union, uncle Joe, etc), category (credit cards, auto loans, student loans, etc), or even assets purchased (cars, computer supplies, houses, etc), the key is to take that huge total debt number, and break it down into smaller, more manageable pieces.

Now your focus can be on these smaller pieces, rather than the huge, seemingly insurmountable total!

Celebrate Small Victories

I usually suggest to people that they set a couple of large milestones along their debt repayment journey. Once they reach these milestones, they should then do something to reward themselves for their diligence and discipline.

If you are one who needs an extra bit of motivation, then you may need to add in more milestones. Maybe it can be once you pay off a particular debt, or it can be a reward for abstaining from a certain negative financial behavior for a set period of time – such as not eating out or playing the lottery for 3 months! In this case, you will celebrate small victories and then use this as a motivation for continuing on in your journey.

Just be sure that you don’t go overboard with your reward. Remember that you still have a long way to go in order to reach your ultimate goal – becoming debt free. Don’t go on a 10-day cruise just because you haven’t purchased a cup of coffee in a month!

Pay One Debt At A Time

This is usually the most logical way to attack debt. Whenever I counsel someone who is attempting to get out of debt, I tell them to list their debt in order from largest to smallest by interest rate – not amount! Then plow every extra penny toward the repayment of the debt with the highest interest rate, while paying the minimum payment on all other debt.

Once that is paid, then move on to the next highest interest rate and attack it in the same manner, adding any additional money that has been freed up by the first debt being paid off. Rinse and repeat until you are out of debt.

If you are in need of additional motivation, then you may need to tweak this plan. Instead of starting with the highest interest rate, start with the lowest balance. That way you will pay off your first debt faster. Hopefully, you will be motivated by the fact that you now owe one less creditor!

Of course this is not the most efficient way to attack your debt, but if you are in need of a psychological boost, then this may work out better for you.

Think of the Ultimate Benefit

For me, the ultimate benefit to being debt free is financial freedom. That means that I now have a choice about how I spend my money. I will be free to give more to my church, and to be a blessing to those in need.

For some, the ability to live off of a reduced income is the ultimate benefit. They see themselves doing freelance work, or living off of their savings for a time and traveling the world!

Others love the idea of being their own boss, and getting rid of debt will help give them the financial cushion they need in order to take that entrepreneurial leap!

What is your ultimate benefit to becoming debt free? Keep your eyes on that prize! Whether it’s traveling, giving, starting your own business, or even volunteering, make that your financial focus.

photo by Banjo Brown

Reader Questions:

  1. How do you stay motivated while paying off debt?
  2. What will be your ultimate benefit when you’re debt free?
  3. For those who have no debt (yes, a mortgage is debt!), how did you stay motivated?


  1. says

    Those are good ideas! I particularly like setting up small goals. I would find progress motivates me to do more. Accomplishing smaller goals should help motivate.

  2. Marriage Course says

    I would find progress motivates me to do more. Accomplishing smaller goals should help motivate.

  3. Khaleef Crumbley says

    @ Krantcents, that’s what works best for us. We have a huge amount of debt, and it seems like we aren’t making any progress, but we have to look at it in smaller pieces.

    @ JT McGee, I agree. Everyone should have a debt repayment spreadsheet to show them the affects of their efforts.

  4. Janet says

    Another idea: Look at those who are in worse situation than you’re in. It may not sound nice, but you’ll feel fortunate that you’re situation isn’t as bad as it could be. With that sense of relief, you can stay motivated.

  5. Jeff @ Sustainable Life Blog says

    Breaking down your debt and keeping focused on the small goals is key. Its much easier to take out a 1,000 loan 10 times than 1 10,000 loan. Another good metric is amount of interest charged per day. Unfortunately, it’s so easy to lose focus on the bigger picture (debt freedom), but it’s crucial to keep it in focus to stay motivated.

  6. says

    Once you’ve got that, I’d recommend doing it in chunks – just trying to plow through it all at once can be painful and monotonous. Take a few days off in between playing, make sure to keep your rest bonus up, to get the most XP out of things. If you set smaller, short-term goals (ie, gain 1 level this week), it’ll help keep it from being a slow slog.

  7. Ashton Wood | Money says

    Some excellent tips. Setting up small goals is the best thing.Also paying of the debt which has higher interest rate is the wisest thing of all.

  8. says

    Great post.
    I think the danger would be to think that the reward needs to be something you ‘buy’. They say the best things in life are free! I would make a list of lovely things that could be done – a walk on the beach or an afternoon off work. Even an evening with your best friends and a favorite movie. And use this for your celebration.

  9. says

    My mortgage is my only remaining debt. I have a plan to pay it off at a certain time, so I add extra each month. I love that I am at the point where the principal goes down more than how much I pay in interest.

    It can be hard to stay motivated for the long term if you have a lot of debt. I am sure the sacrifice might not seem worth it at times, but you gotta do what you gotta do.

  10. KDB says

    Write down your repayment plan in small steps, such as monthly payments, and cross off each payment as you make it. Seeing yourself work towards your goal definitely helps!

  11. says

    I stay motivated in spite of my debts by telling to myself that after that ‘I’ll get over this, I’m not the only who’s into debt’. I keep on telling that to myself, it will be such a good reliever. If I’m gonna be debt free, I’ll probably spend a day going out and spending extra money that I have. LOL.

  12. Quinc says

    I want to underline one very important thing you stated. Be real sure that you celebrate each goal in a meaningful way that just reinforces your next goal. As you have shown us so many times there are lots of ways to have fun and not spend money.