5 Practical Ways to Stay Motivated When Paying Off Debt

Habits expert and Atomic Habits author James Clear says “every choice has a price, but when we are motivated, it is easier to bear the inconvenience of action than the pain of remaining the same.” 

In the same vein, if you lose hope and fail to repay your debt, you’ll sink deeper into the debt rabbit hole because you’ll pay more interest. 

Worse, debt collectors will madden you with calls—some will even call your friends, colleagues, and family to shame you. Besides, you’ll get into the dreaded CRB listing. 

You, therefore, need to find ways to motivate yourself when repaying debt. However, staying motivated until you clear all your debts takes a lot of work. You might need to adopt a frugal lifestyle or find debt-coping mechanisms.

Don’t worry though. In this article, you’ll uncover 5 practical ways to stay motivated when paying off debt no matter how big.

1. Focus on Why You Want to be Debt-free

There are many reasons why you might want to be debt-free. It may be achieving financial stability and peace of mind, personal pride, or simply a desire to purchase a big-ticket item.

Whatever the reason, becoming debt-free is a laudable goal. And it's one that is within reach for many people, with a little bit of planning, discipline, and motivation.

To stay motivated, first, take a close look at your finances and create a budget. This will help you to see where your money is going and where you can make some changes.

Once you have a budget in place, you can start to work on a plan to pay off your debts. This may involve making some sacrifices in terms of your spending, but it will be worth it in the end.

2. Break Your Goals Down into Manageable Fragments

It's easy to get overwhelmed when you're trying to pay off debt. You might feel like you'll never get ahead. So that you don’t feel overwhelmed,  break down your debt into smaller, more manageable pieces. 

For example, instead of looking at Ksh50, 000 debt and feeling overburdened, break it down into smaller chunks whether it’s increments of Ksh5000 or Ksh10,000, and set mini goals that feel easier to achieve.

Knocking off small goals will energize and help you stay motivated and on track. You’ll be able to see your progress and clear the rest of your debt because the goal doesn’t feel as daunting as before.

Also read: Top 5 Mistakes to Avoid When Trying to Get Out of Debt.

3. Track Your Debt Payment Progress

Watching your debt balances drop will make you feel good about your accomplishments. It will also inspire you to keep going. In addition, it can also help you identify any potential roadblocks that may be preventing you from making progress.

So, how can you track your debt repayment progress? 

One way is to list all the debts you're working on paying off, along with the balances and minimum payments for each. Then, each month, update the list to show how much you've paid off. This can be a motivating way to see your progress, as you'll be able to see the balance going down over time.

Alternatively, you can use a debt payoff calculator. It’ll show you exactly how much interest you're saving and how long it will take you to pay off your debt. This can be a great way to stay on track, as you'll be able to see your progress and adjust your repayment plan as needed.

Whatever method you choose, tracking your debt repayment progress is a great way to stay motivated and on track to becoming debt-free.

 More learning: 8 Amazing Benefits of Tracking Your Spending.

4. Celebrate Small Wins 

Another way to stay motivated and pay off your debt fast is to reward yourself for small successes.  Simply put, set milestones and celebrate whenever you hit them. 

This can be as simple as crossing the payment off your list or giving yourself a small treat. For instance, you can dine out at your favorite joint after clearing every Ksh50,000 debt. 

However, be cautious. Don’t spend a lot on the reward as it could derail your debt repayment progress. As such, always include rewards in your budget.

This might seem like a small thing, but it can help you to stay motivated. 

When you see that you're making progress, it'll give you the boost you need to keep going until you're debt-free. Otherwise, you can quickly resent the journey.

5. Try the Debt Snowball Method

The debt snowball method can help clear your debts faster if you have multiple debts. When using this debt repayment strategy, you make the minimum payment on all your debts and then pay as much as you can on the smallest debt. 

This enables you to clear the smallest debt faster. After clearing the smallest debt, move to the next smallest debt. 

Let’s say you have a Ksh5000 M-shwari loan, a Ksh20,000 Chama loan, and a Ksh30,000 Sacco loan. Using the debt snowball method, you’d focus on paying the Mshwari loan first because it has the lowest total balance.

This debt repayment strategy can motivate you to focus on repaying one debt at a time. As such you’ll build momentum and stay on track.

However, it’s not a good strategy for repaying payday loans. Payday loans often have high-interest rates and should be paid off asap!

Here’s how to use the debt snowball method:

• Step 1: List your outstanding debt balances and arrange them from the smallest to the highest balance.
• Step 2:  Pay the minimum on all your debts.
• Step 3: Allocate extra funds to the debt with the lowest balance.
• Step 4: Repeat until you clear the smallest balance then move to the next.

More learning: Break the Cycle: 7 Ways to Dig Your Way Out of Debt.

Wrapping Up

Being in debt can be disheartening. It's a constant weight on your mind and can be really stressful especially if you don't have a plan on how to get out. 

But there's a solution, and it doesn't involve becoming a monk and swearing off all luxuries. All you have to do is stay motivated and keep working at it. It's not a quick and easy solution, but it's a solution that will likely work.