How to Stay Motivated When Paying Off Debt

By Carmen Chan

How do you stay motivated to get to your goal of getting rid of your debts? Sticking to a budget, limiting your spending, and allocating every cent towards your debt – paying off your credit cards, payday loans, overdraft, or lines of credit can feel like a never-ending burden.

Debt fatigue is real. While you may start off disciplined and focused, as the months wane on you may face unforeseen setbacks, your goals feel further away, and your sacrifices don’t feel worthwhile. But it can be beat. Here’s how to stay determined when you’re on your journey of getting back in control of your money.

Set Realistic SMART Goals for Tackling Debt

If you’re $10,000 in the red, don’t expect to be debt-free within a year, especially if you don’t have the income to make this happen. Lay out all of your debts, noting how much you owe for each account, their interest rates, and due dates. With your income and budget in hand, figure out how much you can dedicate towards debt repayment and create a plan on how you’ll tackle your debts. And if you’re thinking, great – that’s the first stumbling block, reach out to us! Our credit counsellors are experts at helping you identify the best way to deal with your debts.

From there, set SMART (specific, measurable, achievable, relevant, time-bound) goals. You are much more likely to succeed if you commit to a tangible goal of paying off $200 every month for a year instead of a loose promise of “paying off debt as fast as I can.”

What Does It Mean to Set SMART Financial Goals?

A woman is excited and feeling rewarded looking at information on her phone after paying off some of her debt.

Create Checkpoints

Instead of approaching paying off what you owe as a big, daunting, insurmountable amount of debt, break the debt down into a smaller, easier-to-tackle chunks. You could strategize by paying down the highest interest debt, or the credit cards with the smallest amount owing. You could even look into consolidating your debts to snag a lower rate.

What Is the Best Strategy to Pay Off Debt?

Create a to-do list of milestones to celebrate along the way, for example, give yourself a badge each time you pay off a credit card completely, or each time you hit another $1,000 paid off. Be happy for these small wins – you’re one step closer to being debt-free and you’ll feel better about your repayment plan. It’s all about building and establishing momentum.

Define Your Long-term Goals

Gain clarity on why you’re embarking on this mission to becoming debt-free. Think of where you’d like to be in the future – do you want to go back to school, help your kids pay for school, go on a much-needed vacation, or buy your dream car once you’ve cleared your debts?

Now that you’re armed with a plan to pay off your debts, think of three key goals you’d like to pursue once you’re at the finish line. Remind yourself of these goals each time you need to stay motivated – they’re emphasizing the why, the reason why you’re pushing through the hard times!

Is This Missing from Your Plan to Get Out of Debt?

Make a Vision Board

Visualize your goals with a vision board so that they’re not just words on a page but clearcut images you can see first-hand. Maybe you plan on rewarding your family with a Caribbean vacation or a home renovation. Post images of the goal you’re working towards to help spur you on. If you’ve never made a vision board, try going old-school. Print pictures from the internet or cut them out of printed materials. Post them around your bathroom mirror, on the fridge, or create a poster that you can hang in a visible place.

Keep these images within sight to keep you on track when you’re tempted to splurge. You can even make them the screensaver on your laptop and wallpaper on your smartphone as a gentle reminder before you make an unnecessary purchase.

Review Your Budget Every Month

Creating a realistic budget you can commit to is crucial on your journey to becoming debt-free. The second half of this vital step is reviewing how well your budget works from month to month. Before the start of every month, get into the habit of reviewing your budget, including your fixed expenses (e.g. mortgage, car payments, energy bills, transportation, debt payments, savings) alongside your variable and discretionary expenses (e.g. groceries, eating out, shopping, entertainment). A free, interactive personal budgeting spreadsheet makes this task easier. It will also give you the chance to assign any extra money you have to top up your debt repayments, either on an ongoing basis, or a one-off with money you have left over from the previous month.

At the end of the month, look at whether you stayed within your budget or if the amounts you allocated to each category were too little.

You’ll get better at budgeting month-over-month and your pay cheque planning will give you the freedom and flexibility to make choices with what you can afford to spend, rather than worrying about setting yourself further back and away from your goals.

Do You Think of Savings as an Important Expense?

Siphon Off Money Into an Emergency Savings Fund

Sometimes life throws us a curveball – while you’re dedicated to paying off your debts, you may come across an unexpected expense like a broken refrigerator, a flat tire, or a speeding ticket. These unforeseen costs can throw the best of us off. That’s why it’s in your best interest to build up a pot of money for emergencies.

In your monthly budget, allocate a small sum towards an emergency savings fund until you have $500 to $1,000 saved up. Keep the account out of sight and out of mind – it will build up faster than you realize. Then, when you face a rainy day, this bit of cash will bail you out without turning your debt repayment plans sideways.

You can help your emergency savings fund grow more quickly. If you receive a bonus at work or a tax refund, put that cash into this emergency savings, too.

7 Steps to Saving Money In an Emergency Fund

Find Ways to Make the Challenge Fun

Have you ever tried a ‘No Spend Challenge’ to help you save more cash to put towards your debt? If not, it’s a great tool to help you rein in your spending and better understand your spending habits. With a ‘No Spend Challenge,’ you’re committing to spending nothing for a fixed period of time – a weekend, an entire week, or even a month. While you may need to spend cash on transportation to get to work, you’ll have to get crafty by using everything you already own to feed, clothe, and entertain you.

You’ll meal plan and make use of the groceries and condiments in your fridge, freezer, and pantry to feed your family and you can go on walks / hikes, ride your bike, read books, or play board games for entertainment.

By the end of the week or month, you’ll learn that it isn’t so hard to step away from spending. It may even be a challenge you’ll decide to try again once a month.

How to Get Started With a ‘No Spend Challenge’

Choose Your Sacrifices – and Rewards

Your debt repayment plan needs to be maintainable – you can’t go cold turkey on spending for months and months on end. With this in mind, choose your sacrifices from month-to-month. Maybe you’ll decide to make coffee at home from Monday to Thursday and treat yourself to a Starbucks latte on Friday morning. You can opt out of a collection of streaming services and subscriptions, like Netflix, Disney+, Amazon Prime, or Spotify, and choose just one per month to limit your spending.

This way, you’re being selective about your spending, sticking to your budget, and savouring these treats. Budgeting isn’t about spending nothing; it’s about spending in line with your choices and goals.

Subscription Costs – How to Stop the Damage with the Silent Spender

Get Help If You Need It

If you feel overwhelmed and don’t know where to begin on your repayment journey, that’s okay. Our credit counsellors are friendly and a wealth of information. They can help you with money management and setting up a budget, creating a debt payment plan, and even consolidating your debts so you have a single sum to pay off. If you’re not ready for one-on-one help, sign up for a free financial workshop or webinar or free self-paced online course. You’ll learn money skills and become familiar with the tricks and tools that will take you well beyond becoming debt-free.

Keep Up Your Motivation to Pay Down Your Debts by Staying Positive

You’ve got a clear vision, an actionable plan, and a road map to get you to your debt-free destination. Make sure you’ve got the mind-set to help you along the way. Some people have a negative relationship with money – they’re afraid to look at their credit card statements, avoid letters from their creditors, and feel helpless about their situation. Be brave and encourage yourself to break this habit. Remind yourself you’ve got support from your loved ones and from credit counsellors if you need it. Shake feelings of shame or stigma about your situation. Be positive, understand that you’re embarking on tackling your debts step-by-step, and celebrate each month that you stay committed to your goals.

Last Updated on April 29, 2024

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The sooner you start dealing with your debt, the sooner you see an improvement in your credit report If you need some help getting started with a plan, or if you’re not sure if your budget is realistic, contact a non-profit credit counsellor for free, confidential help. Typically, the earlier you contact us, the more options you’ll have.

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