When in the mindset of paying off debt, you can be left feeling like you are pushing a boulder up a hill or hitting your head against a wall. The debt's size or the payoff's length of time can impact your motivation. This feeling is known as debt burnout. Know that you are not alone; millions of people feel the same.
I know this feeling well. As of writing this article, my partner and I are currently working to pay off a $300,000 medical school loan. We have personally implemented these strategies to help keep us motivated toward the ultimate goal of financial freedom.
Paying off debt is one of the most challenging financial achievements for anyone to undertake. Whether you are part of the 51% of Americans with over $1,000 in credit card debt or one of the 17% of Americans with student loan debt, it can be a daunting task.
It's a shared experience many borrowers face, whether from student loans, personal loans, or car payments. Although it can be easy to fall into the debt burnout mindset, it's just as easy to climb out and even easier to avoid if you're aware. This article will give you some simple tips to help prevent that burnout and continue working to reach financial success:
12 Tips to Avoid Debt Burnout:
1. Incorporate fun-free and frugal activities into your life:
The first tip is to incorporate more fun, cheap activities into your life. Many things, whether you live in the city or a small town, are free or cheap to do during your free time. A couple of examples include:
Community events
Hiking
Free museums or local places to explore
Video games (a personal favorite of mine!)
Happy hours
Networking Events - many of these offer opportunities to meet cool new people and are often funded by organizations.
My partner and I are always on the hunt for free and fun activities in our hometown of Chicago. There are always new places to explore and events going on.
Even if you live in a small town or don't like going out, picking up a low-cost hobby can be a great alternative. I mentioned how I am a big fan of video games. Other examples include gardening, board games, puzzles, and even Netflix!
I recommend googling free activities near you. You can often find some great options.
Incorporating these low-cost activities into your life can help you avoid debt burnout by adding some fun to your life and will also teach you to set up good money habits for the future. Not everything fun has to be expensive!
2. Find alternative sources of income:
Hobbies are even better if you can find a way to make money out of them. If one of your hobbies is knitting or art, you can list it on Etsy. If you like trying new free activities in the city, you can try making social media content about it. Finding additional sources of income can help you with your debt payoff and give you a focus outside of the debt paydown.
Keep in mind that this can be a lot of work, and with your current debt paydown strategy, you could already be strapped for time through working extra hours or multiple jobs, but it is always good to mention.
This is the reason I started this blog. Not only do I want to share these strategies with you all. I plan to use this blog to create revenue and get my family financial freedom. All through talking about a topic (money) I already talk about all the time!
3. Review your finances once a week on a set schedule:
If you are working hard to pay off your debt, you have likely created a habit of checking your bank accounts daily or reviewing your debts multiple times a week. It can feel like you are watching paint dry. It is much like losing weight and checking the scale every day. You won't notice significant differences. Paying off debt is an incremental process and takes time and consistency. Checking every day can make it seem slow and demotivate you in your goals.
Once you have set up the payments and know you have the right strategy, try to review your finances only once a week. This process will allow you to continue focusing on your goals but not obsess over them daily. This has been proven to help reduce stress. It will make you more likely to stay on track and avoid burning out on your debt payoff journey.
4. Celebrate the Milestones:
You may hear people tell you not to eat out or not buy things you want while paying off debt. You should indeed avoid eating out and frequently shopping while paying off debt. However, rewarding yourself for reaching your milestones can be a powerful motivator. For example, if you have $50k in debt, do something nice for yourself every time you pay off $5,000. If you want to try a new restaurant in town, go to a sporting event, buy a new video game, or get that new jacket. Go ahead and reward yourself!
There is a limit. Spending $5,000 on vacation and putting yourself more in debt defeats the purpose, but spending a couple of $100 will not destroy your plan, and the mental health benefits can help more in the long run. Don't be afraid to reward yourself for your small achievements. It's a marathon, not a sprint. This can help motivate you and avoid burnout.
5. Enlist Support:
Having a support system when paying off debt is essential, as it can be a lonely and challenging journey. Consider joining a debt-paying community on social media (like Money Done Simple) or sharing your goals with friends and family. Having someone to share your progress with and to hold you accountable can be a powerful motivator.
My partner and I rely on each other when we get overwhelmed, reminding each other why we are making sacrifices. For you, this could be a friend, a parent, a partner, or someone you meet online as long as you surround yourself with people who support you on your journey. This support will help motivate you to continue working towards the ultimate goal of financial freedom and avoid burning out along the way.
6. Focus on the big picture and plan for the future:
Make a list of financial goals you want to achieve and how paying off debt will help you get there. Whether it is buying a house, paying for your kids or future kids' college, or traveling the world. Always thinking about the big picture and your future life goals will help remind you why you are working towards a debt-free life.
Many times merely writing down these goals can help. I know because I do it. I keep a list of all my financial goals that I want to achieve and update it frequently. When I feel debt burnout, this reminds me why I make the sacrifices and keeps me motivated to work on my career, whether my full-time job, my real estate career, or even writing this blog post for you!
7. Refine your debt repayment strategy:
There are two ways to primary ways to pay off debt. Each has its advantages and disadvantages, but both can help you avoid burnout:
Debt Avalanch Method: This method is where you pay off the highest interest first, regardless of the size of the debt. This can help motivate you by taking out the biggest monster first. Knowing that you are reducing the most prominent negative on your balance sheet can encourage you to keep going. By paying off the debt with the highest interest rate first, you'll also save money in the long run as you'll pay less interest. The debt avalanche is my method of debt repayment.
Debt Snowball Method: On the other hand, we have the debt snowball method. Dave Ramsey made this method famous and took a slightly different approach. The debt snowball method promotes that you pay off the smallest debt first, regardless of size. The idea is to build momentum and confidence as you pay off each debt, eventually working your way up to paying off more significant debts. This method can be helpful for those who need a psychological boost in their debt repayment journey. The whole point of the debt snowball method is to avoid burnout making this an excellent option for those struggling with debt burnout.
8. Create a budget and stick to it:
Even if you successfully pay down your debt balance, going in without a plan for the rest of your money can lead to debt burnout. I work with many people who are good at paying down debt but don't ever budget. These people are often the ones with the highest burnout rate. Creating a budget is a crucial part of avoiding debt burnout. It lets you understand your monthly expenses clearly, helps you prioritize debt repayment, and ensures that you use your money wisely.
9. Automate debt repayment:
Setting up automatic debt repayment can help you stay on track and avoid debt burnout. This ensures that you make consistent payments and reduces the likelihood of missing a payment which can add stress to an already stressful situation. It also takes the stress out of having to remember to make payments every month, which can add to the feeling of burnout.
10. Stay organized:
Keeping track of your debt repayment progress can be overwhelming, especially if you have multiple debts. To stay organized, create a spreadsheet or use a debt-tracking app to keep track of your debts, payments, and progress. This will help you stay motivated and focused on your debt repayment goals and also give you a clear understanding of how much longer you have. For a simple debt paydown calculator, check out ours here.
11. Be patient:
Paying off debt takes time, and patience is essential. Know that you are doing this for your future goals, and be patient with the results. As mentioned above, paying off debt is a slow and tedious process. However, as we all know, the tortoise beats the hare every time. Acknowledge that patience is part of the process and embrace it.
12. Realize that you are Building Good Money Habits:
Paying off debt is not just about making payments. It's also about building good money habits. These habits include creating a budget, saving money, and avoiding new debt. Focus on these habits and create a strong foundation for your financial future. This will not only help you pay off your debt, but it will also help you achieve financial stability and success in the long term. Knowing that you are building these habits for your future and your family's future can help motivate you to continue your debt payoff journey.
Bonus Tip. Stay positive: Finally, it's important to stay positive and remember why you're working towards a debt-free life. Surround yourself with positive influences and stay motivated by celebrating your progress along the way.
Conclusion:
Remember that debt burnout is a common experience faced by millions working to pay off debt and that you are not alone in your journey. Millions of people across that world are going through this struggle. Burnout is normal and happens to everyone. Continue working towards your goal. Once you send your final payment, you will be free from the trap of debt to map your future. Remember why you are making these sacrifices. These tips above can help avoid burnout along the way.
Always feel free to reach out to us if you need some support in your journey. MoneyDoneSimple is building a community to support each other as we strive towards our goals of financial success together.