The second most important thing on your debt free journey, the first being deciding to start, is probably staying motivated when paying off the debt. I have seen quite a few people start their debt free journey, throw everything at it and then a few months later they have restricted themselves so much they lose motivation. I thought I would share what I found motivated me through my debt free journey of 2 years.
Don’t go cold turkey
When people start paying off debt, even myself, I thought I must stop spending money on everything I enjoy and cut everything out. Now this was okay for about a month but then I felt I couldn’t do anything. I found myself torn between paying off debt and living my life. Therefore, I found the best way to stay motivated is to pick what is important to you or what you enjoy and allow some of that in your budget.
For example, instead of cutting out takeaways completely I went from having 2-3 a week to having it once every other week. This mean’t that I didn’t feel deprived but I still got to have some of what I enjoy and save money! I felt better as well as it had got to the point where we couldn’t decide on a takeaway because we had had them all whereas now we look forward to it and actually fancy one.
Continue to do what you love
This leads on from the last one but continue to do what you love. I love to travel and a good 35% of my debt had come from travelling. I made sure that I still travelled while paying off debt as it was something I loved doing. The thing that changed was I now do it on a budget and shop around for deals.
For example, me and my sister went to Pompeii for £250 for both of us and £100 spending money. This was for 4 days and including travel and accommodation. The spending money covered our activities and food. We also went to Krakow in Poland and that was £175 each. This was more expensive but there was a lot to see there. It doesn’t always have to be expensive such as the £4k I spent on a previous trip to New York. Looking back now I could off saved so much money on that trip if I had shopped around.
For me, paying off £23,700 at the beginning was very daunting. I didn’t think I was ever going to be able to pay that off. Therefore, I set mini targets. This enable me to have smaller goals and it motivated me when I met one of them to keep going. E.g. my first goal was to pay of my phone contract (this was around £900) and go SIM only. My next goal was to reduce my car monthly payments to less then £200 a month (it was £335 when I started). Whatever the big goal is, make sure to make mini ones that will help keep you motivated and go towards your overall aim.
This really helped to motivate me. You could either create one or there are lots online that you can print off. For example, it could be a chart with a 100 squares. I decided to use this to track paying off one of my loans so I put that total at the top of the page. I then divided the loan amount by 100. This then gave you an amount for each square. Once you had paid off the amount equalling a square you could colour it in. This is also know as paying 1% off at a time.
I have create a savings version that I am using currently to track my house deposit. This is on my blog under the freebies section.
Please let me know in the comments what helped you stay motivated when paying off debt.