Tips for Staying On Track When Paying Off Debt

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.

Written By

Updated on Friday, November 16, 2018


According to the Federal Reserve Bank of New York, debt in America reached $13.21 trillion in the first quarter of 2018, exceeding the record of $12.68 trillion set during the Great Recession. No matter what kind of debt you personally have, whether it’s from student loans, credit cards or medical bills, owing money can feel overwhelming. You look at the bills and can’t imagine what it will take to bring that huge number down to zero.

But, with dedication and a methodical approach, you can do it. We explore how to stay motivated and on track with your debt repayment, and how to avoid a repeat performance.

10 tips for staying on track when paying off debt

#1 Design a debt repayment plan

A great way to stay on the straight and narrow is to define attainable goals you can work toward. For example, try out the debt snowball method. This method involves ordering debts from lowest balance to highest balance and tackling the smallest debts first. Because you’re focusing on the small debts, you will start racking up early “wins,” and that positive momentum will give you the fuel you need to keep going as the debts get bigger and bigger.

#2 Set it and forget it

Based on your budget, determine how much you can afford to pay each month — paying more than the minimum is ideal — and set up auto withdrawals. This gives you one less thing to worry about, and it could make you less tempted to skip payments or pay less.

#3 Pay on time

Don’t let your loan balances overwhelm you to the point of inaction. Paying something toward your debts on time is better than paying late. On-time payment history is the single most important factor that contributes to your credit score. “Although paying extra against a principal balance can help reduce the amount of interest you pay on a loan overall, if there is nothing else you do, just pay on time,” said Mike Fanning, head of MassMutual U.S., an insurance and financial services company.

#4 Trim the fat

If paying even the minimum is difficult, you might have to make a temporary lifestyle change to reduce your spending. Take a look at what you’re spending your money on and see where you can cut back. It could be as simple as forgoing a monthly car wash and scrubbing your own car for a while, or planning grocery shopping in advance so you avoid last-minute, takeout charges. The thought of getting back to the car wash could motivate you to pay your debt off more quickly.

#5 Identify your triggers

Do you end up with a hefty bar bill when you go out with friends every week, or purchase more than you intended when you visit the mall? If this kind of overspending is putting the brakes on paying off your debt more quickly, identify the trigger, i.e. the bar or the mall, and find ways to avoid them. Perhaps you invite friends to your home instead, or establish a moratorium on the mall.

#6 Find a partner in crime

There is safety in numbers. Find a friend or relative who also has debt, and make a date to check in every month. Knowing that you have to answer to someone regularly can help prevent you from slipping. If you don’t know someone personally who can provide that support, there are online accountability groups that can help. Facebook, for example, has become a destination for many budget-conscious consumers to share their experiences and provide tips and support for one another.

#7 Create a debt bet

Do you like healthy competition? You may have heard of diet bets, where several people put money in a pot and the person who loses the most weight wins the pot. Create a “debt bet” with a few friends with comparable debt and similar salaries, like your crew of first-year doctors paying off their medical school debt. The person who pays off the most in a set period of time, wins the pot.

#8 Refinance

Improving the terms of your loan can shave money and time off your repayment. Before you shop for another loan, use a loan calculator to get a sense of how much you’ll be paying over the term of your current loan, and then look for something more favorable. See what your current lender has to offer, but look at other lenders as well.

#9 Consolidate with a loan or balance transfer

If you’re paying off multiple loans, you might want to consolidate your debt. You can apply for a debt consolidation loan, which is a fixed amount of money borrowed at a fixed rate over a fixed period of time. You can then use the proceeds to pay off existing debts, leaving you with just one loan balance to worry about moving forward and hopefully one with a lower rate.

A balance transfer can be a good option if you have good credit and can qualify for a solid 0% intro APR offer. This method is only useful for credit card debt, however.

#10 Forgo gifts

No one wants to skip birthday and holiday gifts, but during your debt repayment period, ask people to help you pay off your debt in lieu of gifts. To make it easy, set up a GoFundMe (or similar) page where people can contribute and see the positive effect they are making. Your family and friends will be impressed with your resolve, and they may even spend more than they usually would to help you along!

How to keep debt at bay — for good

Create a budget

If you didn’t have a budget before, create one now so you stay on track. Budgeting apps, like Mint, You Need a Budget (YNAB) and TOSHL Finance are three of our favorites. You can connect these apps to many of your accounts so the information automatically updates, which streamlines and simplifies the process, making budgeting much less of a burden than with the manual spreadsheets or Excel forms of old.

Don’t rest on your laurels

Now that you’re out of debt, it’s easy enough to start living high on the hog with all this “extra” money. Nick Holeman, CFP at, recommends that you start saving instead. “Don’t get too comfortable after you’ve paid off your high-cost debt – continue to make saving a priority by building a safety net,” he said. “Saving three to six months’ of living expenses will ensure that if you have a financial emergency, you will be able to navigate those difficult waters.

Avoid comparisons

Holeman also suggests that paying attention to how others live can be counterproductive. “Don’t compare your standard of living to those around you,” he said. “If you try to keep up with the Joneses, you will put yourself into more debt.”

Be careful with the plastic

Pay off your credit cards in full every month but to be prepared to stop using them if you are overspending.

We know tackling your debt can feel like climbing the world’s highest mountain (and not in a good way), but it’s all for a good cause. If you stumble along the way, get up, dust yourself off and keep on trucking. Being debt-free will one of your proudest accomplishments.