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Pay Off Debt: 5 Tools to Help You Become Debt Free

Personal Finance

Are you currently trying to pay off debt?

Text written as 'DEBT' over a rock

If you just started the journey, it can be quite exciting can’t it?

All you can think about is being completely debt free and you dream of the day that it actually happens.

Every extra penny that you earn is set aside to pay off your debt and you can almost taste financial freedom!

But, somewhere in between that initial excitement phase and the time that you actually do pay off your debts, there is what seems like a never ending drag of no-fun and non-excitement.

You constantly feel like everyone is out having fun and you’re stuck at home because you have made this idiotic decision to rid yourself of debt.

You know deep down that you’re doing the right thing, but it would be way more fun to just forget about paying off your debts for a night and hang out with your friends at that pricey restaurant downtown.

If you are facing this moment, and you don’t have a real plan in place to hold yourself accountable to your decision, then you’ll most likely crack every time.

Soon you’ll be on the week-on week-off plan where you’ll occasionally be focused on paying off debt, but then something fun comes along that you just can’t pass up, so you take a week off from paying down your debts. Inevitably, your debts remain and you end up going back to your old lifestyle of spending with your best friend by your side, your credit card.

If you don’t want to fall into the norm of society though, and you truly do want to rid yourself of debt, then I would suggest that you use these five tools to help you pay off debt.

1) Buddy Up

It is so hard to pay off debt when no one is there holding you accountable.

If you have a few friends that decide to pay off their debts as well, you can find new ways of having fun and experience everything together.

You could hang out in the park or have game-nights at each other’s houses. Free entertainment is typically the best way to get over your debt-paying blues.

2) Set Up a Reward System

You know, not every single penny has to go toward your debts. Since it often takes years to get rid of all your debts, it’s best to set up a reward system for yourself along the way.

Maybe you’ve always wanted a fitted baseball hat, but just never felt like you should buy one.

Perhaps at the $1,000 payoff mark, you make a plan in your budget to buy the hat. Make the prize fairly small, but meaningful.

3) Download a Debt-Payoff App

There are so many apps to choose from, for example LearnVest. But sometimes it’s good to visually see your debt go down and your net worth go up. These apps are great for that.

4) Create a Physical Visual

If an app doesn’t do it for you, then maybe you need to set up a visual model.

Get two clear containers and mark one as “Debt” and the other as “Net Worth”. Load up each of them with fake money, proportionate to the amount of debt that you have and your total net worth.

If you have $10,000 worth of debt, maybe it would be best to use fake hundreds. Then, each time you pay off a hundred or more bucks, transfer that money from the debt jar to the net worth jar. After a few months, you’ll really start to see the difference and you’ll be motivated to get rid of the debt even faster!

5) Visualize

The best way to accomplish anything in life is to visualize it before it happens.

Each night before you go to sleep, imagine what you’re going to do once you become debt free.

If you plan on making a trip to the Bahamas, think about the wave crashing on the beach and the gentle warm winds blowing across your face.

If you have a hard time visualizing, collect a few pamphlets and plaster them around your bedroom or bathroom.

The more you surround yourself with your end goal, the more likely you are to achieve it.

What techniques have worked for you in paying off your debts?

Photo credit: iandavid via photopin cc

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