Do you ever feel discouraged while you are paying off debts? Admittedly, it can be quite challenging to completely pay off what you owe. The temptation to use the money to buy something else instead of paying for the debt can be very strong. But we all know this is a big debt payment mistake. If you have allocated that money towards your credit obligations, you need to make sure it gets there.
The current debt situation in the country is starting to reach scary heights once more. Based on the data from the Federal Reserve Bank of New York, the household debt is already at $13.15 trillion by the end of 2017. This includes mortgage, student loans, auto loans, and credit card debts.
Paying off debts, especially when it involves a huge amount can be very challenging. You know that it will take a long time to pay it back. Not only that, as long as you are in debt, your finances will always be limited.
Tips to help you stay motivated while paying off debts
No matter how hard it might get, you need to pay off your debts. You borrowed it so it is your responsibility to make sure that it will be paid. While most of us start paying the debts aggressively, it is harder to keep the momentum high. There is a high possibility that it will get more difficult to pay off the debt the longer it takes. That means there is a chance that you will not completely pay it off.
Sometimes, we end up failing at debt payments, not because we cannot afford it. There are times when the problem is the feeling of discouragement. People feel discouraged because they feel like it will take forever for them to complete the task. Not only that, they feel like they are not getting anywhere when it comes to their debts. They have spent what seems like a long time and they have yet to put a huge dent on their balance.
All of these may seem simple but they can be effective in making you falter in making payments. And when you feel like giving up, that can make you stop paying off your debts. Fortunately, there are things that you can do to keep yourself from debt discouragement.
Know why you are feeling discouraged
This is the best way to start – know what causes you to feel discouraged. You need to identify what is causing you to feel like you are not doing enough. Do you feel discouraged because your progress is really slow? Or maybe you are not motivated because you are paying too much and it feels like your life is too difficult because of your payments? Whatever it is, you need to name the source so you can focus on it.
Keep your eye on the progress
Sometimes, people focus too much on what has yet to be paid. While this will keep you grounded it can also make you feel the burden of what you still have to accomplish. Instead of focusing on what is unpaid, why don’t you concentrate on what you have already paid? Give yourself a pat on the back because you were able to pay that much so far.
Think about why you are paying off debts
Another helpful trick is to remind yourself why you are paying off debts in the first place. Obviously, you are paying it off because it is your responsibility. But there are times when people have more reason than that. For instance, if you plan on buying a house, you need to have a good credit score to be approved of a low-interest mortgage. That can be a good reason to bring your credit balance down by paying it off. Or maybe you want to retire without debt. There are many reasons why you want to aggressively pay your dues. Use it to motivate yourself.
Stop comparing yourself
Comparing yourself can be a double-edged sword. It can help motivate you but if comparing yourself to others make you feel depressed or inferior, that can be harmful. If you have a friend who is also getting out of debt and they are already on their way to debt freedom, try to observe how you react to their success. In case you are feeling down, then stop comparing. But if it motivates you, then that can be used to your advantage to battle the feeling of discouragement.
This is also something that you can apply when it comes to using debt. Keeping up with the Joneses is a serious mindset that can ruin your finances. If you have to compare yourself, make sure you do not just choose the right people. You should also ensure you are reacting to it the right way.
Setup milestones that you can celebrate
You can also keep the feelings of discouragement at bay if you set up milestones. For instance, if your total debt is $10,000, you can set up to celebrate every time you pay off $2,000. Treat yourself to eat out with your family or do something that you know will refresh your mind. Make sure the amount that you will use to celebrate will not be too much. But nevertheless, the celebration will give you enough high to motivate yourself to complete your debt payments.
Look for a positive role model
Research reveals that having a role model that fits your goals will help influence you positively. Having someone that you know has gone through what you are going through right now will help motivate you. Knowing that they were successful should convince you that it is not impossible to completely pay off your debt.
You can use any of these to help motivate yourself while paying off debts. While it may be hard right now, you can be successful at what you are aiming for. You just have to set your mind to it.
About using debt wisely
Paying off all your debts, while it can be challenging, does not mean you should completely stop using credit. Believe it or not, it is possible for you to use debt wisely. If you understand it perfectly, you can use it to your advantage.
There are a couple of things that debt can do for you to help with your personal finances.
- It teaches you to be a smart spender. This is specifically true for credit card users. The temptation to use your cards for all sorts of expenses can be tempting. But if you use it to practice and curb your spending urges, it can work well for you.
- It opens financial opportunities for you. There are debts that can help improve your net worth – like a mortgage or a student loan. You just have to make sure that you have the right credit situation to help you get it with the lowest interest rate – and by that, we mean having a good credit score.
- It can help you maintain a good credit score. Obviously, you need to use credit and show that you know how to manage your credit wisely. You need to learn how to pay off your debt properly and not go overboard in borrowing money. If you do it right, your credit score will always be high and will help you get the best loans in the future.
As you can see, using debt is not too bad. You just have to make sure that every debt you borrow has a repayment plan in place. That way it will not accumulate to a point where paying off debts will be very hard. Keep your credit in check so it will not compromise your financial future.