Getting out of debt is a long process, especially if you’ve waited long enough to make the change that you’re so far in debt you don’t even know how you’ll ever become debt-free. I should know. I got myself into a mountain of credit card debt and it took me years to get out from under it. There’s no way I would have been able to get out from under that much debt without making it fun.
Are you where I was six years ago? You’ll want to take a look at this. Here’s how to make getting out of debt fun.
How do you eat an elephant? One bite at a time.
1. Define Your Elephant
The worst thing you can do is to start comparing yourself to others. So, start where you are. Write down your starting point today. How much do you need to pay off? Now you have your elephant. Don’t judge the elephant for being so big! You can’t control the size of the elephant any more than you can control the weather. You have to eat it. You can wish it were smaller, but that’s not fun. Fun is figuring out how you’re going to eat the thing!
2. Figure Out Reasonable Bites
My elephant was $25,000. At the time, that was my annual salary. It was so easy to see such a huge number and get dismayed. To make it fun, you have to figure out how you’re going to divide your elephant into bites. I had three credit cards, each with a different balance. My first two bites were paying off the small credit cards. Once those were paid off, my elephant was still large, and had to be divided into bites again. At that point, I set thousand-dollar bites, and celebrated every time my elephant got one bite smaller. Which brings me to my next point.
3. Acknowledge Quick Wins
All of your small wins will add up to one big win, I promise! But you must celebrate every small win. Ideas for celebration markers include:
- Deciding to get out of debt
- Paying off one of your cards
- Paying off a bite
- Getting your debt down by a digit (this is huge)
- Adjusting your debt so it’s a prime number
- Paying anything off ahead of schedule
- Making that last payment
4. Make Sure You’re Celebrating!
But make sure your celebrations are small. You don’t want to add back pieces of the elephant when you’re eating it! Okay, so the analogy doesn’t hold here, but celebrating shouldn’t be expensive. Ideas for celebrations include:
- Dance party in your living room
- The latte you dream about when you’re being diligent
- A happy hour drink (not five!)
- A bottle of nail polish for an at-home manicure/pedicure
- Something from the fancy section of the grocery store
5. Track Your Progress
Sure, there are all kinds of online tools you can use to keep track of your progress, but if you’re anything like me, you need instant gratification so here’s what I suggest you do: open up your Google Spreadsheet and list your various forms of debt. Mine were credit card, student loan, and car loan. Put the totals of each in your first column, but make the numbers negative. There’s a psychological benefit of a line headed up in a positive direction versus simply headed down toward zero. You’re moving on up. Now, every time you make a payment, change the number for next month. Figure out when you’ll cross the zero line, with the normal minimum payments, and adjust every time you’re able to throw more.
6. Plan for the Next Step
Getting out of debt is both really important and the very first step. You cannot get rich if you have credit card debt, but simply being out of credit card debt won’t make you rich. Remember that, and plan for what’s next. When you’re out of debt, you can do anything! Think about maxing out your IRA, contributing to your company-matched 401(k), adding a cash buffer to your emergency savings, anything.
7. Don’t Eat Anymore Elephants
You can eat an elephant. I know you can. You just did! One bite at a time. But it wasn’t pleasant. Sure, we made it a little more fun by adding some dance parties and fun, inspiring charts and graphics, but you don’t need to eat another one ever. Once you’re done, you’re on to bigger and better things, right?