Do It Today: Steps 9-12 of 12 toward Living a Debt-Free Life
We’ve officially made it to the final segment of our Take Control series on how to live a debt-free life! There are just four more steps to cover. If you haven’t read Steps 1 through 8 yet, take a quick pause to go back and catch up on Part 1 and Part 2. If you are all caught up, let’s finish this thing strong!
As a quick recap, here is the ground we’ve covered so far:
- Take stock of your debt
- Don’t dig yourself deeper
- Negotiate a lower APR on your credit cards
- Create an emergency fund
- Create a budget
- Trim expenses
- Create a debt snowball
- Boost your income
If you’ve been practicing these first eight steps, you are fully prepared to power through to the finish line.
Step 9: Fuel the Fire with Extra Cash
Give your debt payoff plan a massive boost by feeding it with any unexpected income that comes your way. Got a seasonal bonus at work? Route it straight to your priority debt. Did you receive an unexpected tax refund or a cash birthday gift? You already know exactly where it needs to go!
It isn’t always easy to say goodbye to an unexpected windfall, but that extra cash will shave months off your repayment timeline. It might feel a little tough to spend birthday or holiday cash on a credit card balance, but remember: it is only for a season. You won’t have to do this forever if you knock the debt out right now.
I used to follow a 30-minute circuit workout at the gym that included 20 different stations. When the green light came on, you had to push yourself hard for a full 60 seconds until the red light flashed, giving you a quick rest before rotating to the next station. During the hardest parts of that workout, I would constantly tell myself, “You can do anything for 60 seconds.” So I did. I would push through the friction because I knew a break was coming.
Paying off your debt will obviously take longer than 60 seconds, but the mindset is exactly the same: You can do this. You are pushing yourself hard right now so that you can be financially healthy for your future. It’s only for a season.
Step 10: Put It on Autopilot
Now that you are maximizing your payments toward your priority debt, remove the daily temptation to spend that money elsewhere by automating it.
Use the Bill Pay feature or set up a recurring, scheduled transfer inside your ATFCU digital banking platform. Sending that extra money directly to your target account the morning your paycheck hits ensures your goals stay on track without you even having to think about it.
Step 11: Fearlessly Track Your Progress
Update the debt inventory spreadsheet or notebook you created in Phase 1 every single month. Keep a shortcut to your spreadsheet pinned to your phone’s home screen, or draw a visual progress thermometer to hang on your fridge where you will see it every day.
Watching those balances shrink provides incredible psychological fuel to keep working hard. Tracking your milestones is vital for any major life change. Over the past three years, I have lost 80 pounds, and you better believe I tracked every bit of that progress! I took photos at the start, at three months, at six months, and at the one-year mark. Even though my clothes were getting too big and I felt like a completely different person, nothing hit me harder or kept me more motivated than looking back at where I started compared to where I stood today.
Looking back at old records can either make you frustrated that you ever let yourself get into that position in the first place, or you can choose to let it be an absolute celebration of your hard work and lifestyle changes. Choose celebration!
Step 12: Celebrate Your Wins
Is your total balance shrinking? Have you completely eliminated one of your outstanding retail cards or loans? Then it is officially time to celebrate!
Never beat yourself up for the past debt you accumulated—just keep looking forward and working hard to change your trajectory. Celebrate every single victory along the way, but make sure you choose low-cost or free rewards so you don’t accidentally reverse your progress. Plan a fun movie night at home, pick up a favorite treat, or take a relaxing day off.
Take note of where you started and compare it to where you are three, six, and twelve months later. If the journey takes longer than you originally planned, keep going anyway. You are striving to be the financially healthiest version of yourself, and you deserve to celebrate big every step of the way!
