Sunday, July 27, 2014

Becoming Debt-Free (Part 4): Keeping the Momentum Going

"What I want in my future is bigger than what I want in my present."

Dave Ramsey's debt snowball plan is structured in such a way that it helps you stay motivated and sets you up for success when it comes to those bigger debts. In the debt snowball, you pay those smaller debts first (regardless of their interest rate) because paying one debt motivates you to continue. You move on to pay the next one and the next one and so on. Those smaller wins really help to keep you going. They also help to recondition your brain. You learn how it feels to win with money, to change your behaviors about money and to start making more money wise decisions. Lastly, once you reach the larger debts, you have a really big "snowball" to throw at them. But even with a big snowball, lots of smaller "wins" under our belts and 2 years of much more careful, wiser money decision experience, we needed to find ways to keep the momentum going.

After 2 years of working our debt snowball, I can honestly say there have been many times I've thought about going back to the way things were. It was easier back then, ignoring the debt. But working our debt snowball made it difficult to turn away from all the progress we had made. And we HAD made plenty of progress.

By the time we hit our 2 year mark of working through the debt snowball, we only had 2 remaining debts. Two very large student loans. Very, very large student loans. We were looking at a solid year of throwing every spare penny at those loans to make them go away.

And here we are now, several months into paying on those student loans with several months still left to pay on those same student loans.

It's like being in a rowboat in the middle of an ocean. You paddle and paddle and paddle, day after day after day and all you ever see in all directions is ocean and sky.

Image courtesy of tiverylucky /

It's easy to lose momentum. It's hard to imagine seeing land when all you keep seeing is ocean. Sometimes it's hard to see debt freedom when all you can see is a big pile of debt.

When you throw several hundred dollars a month at a debt that is a couple thousand dollars, the amount left on your debt decreases quickly. It doesn't take long before that debt is gone! That creates more motivation to continue.

But when you throw several hundred dollars a month at a much larger number, let's say $20,000, you still have a REALLY big number left over. Several hundred dollars doesn't make a very big dent in $20,000. It takes a whole lot longer to eliminate that large debt.

So when progress seems slow, how do you keep the motivation alive? How do you make sure you have enough momentum to propel you forward through the largest debts in your debt snowball? I've put together a list of some things that have worked for me.

Remember The Largest Debts Are Your LAST Debts

If you are working your debt snowball the way Dave Ramsey teaches, your largest debts will be the last ones.

I love the way that works out. By the time we got to our huge student loans, everything else was paid off. That meant we had a large chunk of cash every single month to throw at the student loans. Once the first (smaller) student loan is paid off, there will only be one left. The final debt. The LAST debt. That in itself is a big motivator.

Remind yourself how close you are to the finish line. When you have finished paying your last debt, it will be all over. You will be DEBT FREE!

Involve Everyone

Many people feel it's easier to accomplish a goal when you have someone doing it with you. Whether it's a gym buddy or a study partner, having someone working with us towards a common goal seems to help keep us motivated. So why not do that with your debt elimination plan?

Let everyone know what you are doing. I don't mean you have to discuss your budget with your garbage man or the babysitter, but certainly you can share your goals with friends and family. They can support you in your efforts. They'll also know to cut back on the number of times they ask you to spend money ("join us for dinner out" or "let's grab a couple drinks" or "that dress is definitely should get it!").

We discussed the debt elimination plan with the Pickles as soon as we started it. We wanted them to know we wouldn't be going to restaurants much anymore. We wouldn't be buying a lot of "stuff". We were going to be very careful with our money and how we spend it.

We also told them WHY we were doing it. We wanted to move out of this rental and get a place of our own. Each of us in this family has their own reasons for wanting a house of our own but it is a common desire with all of us. The Boy even offered up his entire savings in order to help us get out of debt so we could buy a house sooner. We were grateful, but declined.

Since everyone is involved, everyone does their part and everyone "know the deal." When my parents called one weekend inquiring about our summer plans, The Girl told them "Tennessee is really nice but we just don't have the money for that right now." (She will still blow through her chore money as fast as she earns it, though.)

Post Your Progress

When I was trying to quit smoking, I put up a post-it note and made a mark on it for every time I went outside for a cigarette. It was posted where everyone could see it. Even my children, my most vocal cheerleaders, were able to keep up with my progress from that simple post-it note. It held me accountable for my actions.

The same sort of "public" accountability can help you with your debt snowball.

We keep a debt snowball chart on the refrigerator that shows all the months we will be working on a particular debt. Every month we make our normal payment and then cross off that month. Then if we are able to put additional money toward the debt that month, we would. Sometimes, we were able to send in enough additional money during the month to be able to eliminate an additional month from the chart.

It was simply a piece of paper but it felt like our financial billboard. Everyone in the family could look at that chart and say "Wow! We've paid off a lot so far!" or "Wow! We only have 10 months left to go!"

Have Stepping Stones

When Mr. LH and I first started our debt snowball, I asked him what debt he wanted to pay off more than any other. For him, it was the student loans. For me, it was a Discover credit card. I couldn't wait to get that thing paid off and shredded.

If I came across something I thought I wanted to buy, I would compare it to getting that Discover card paid off. The credit card would usually win. Once we got to that card in our debt snowball, we hit it with everything we had and paid it off in under 4 months.

Once it was paid off, I needed another stepping stone...another goal...something else to help me move forward. My next stepping stone became Mr. LH's student loans. I wanted so much to see the relief in his face when those were paid off. Every month brought us closer to that date and anything I could do to save money in other areas of the budget brought the date closer to us.

Keep a record of your progress

From the beginning, I have recorded the balances of every debt every month. I also calculated the total debt and the difference from the previous month (showing the total amount paid). Each page shows 6 months of debt balances. The latter pages show mostly zeros.

It really helps me to be able to look back and see how far we'd come in only 2 short years. Whenever Mr. LH seems particularly stressed about getting something paid, I pull out those sheets and show him all the progress we have made. It makes him feel a whole lot better knowing that all his sacrifices and hard work are paying off.

Our bare bones lifestyle has remained the same (or gotten even more bare bones) for two solid years but "behind the scenes", our debt has been going away.

Constantly remind yourself of the goal...the big picture

Mr. LH and I had always talked about moving west. We had always looked toward the mountains searching for that perfect private out-of-the-way plot of land with a view. We've always had it in the backs of our minds practically since the day we met.

See this spot of land?

Gorgeous, isn't it?

It's one of many spots of land I find extremely desirable in the middle of nowhere, Colorado. This particular spot is my favorite - somewhere along a dirt road 17 miles from the nearest town...a little town. It's not for sale right now, but there are similar plots nearby. I can picture a small house, a barn, a chicken coop and a large garden on this spot of land. I can see in my mind the glorious orange sunsets over those mountains and years of happy, peaceful living with Mr. LH.

I want it and I want it now. But it's hard to get a loan for unimproved land. You need cash. A lot of cash. And before we can start saving money for our land, we need to pay off our debts, build an emergency fund, and set up a system for putting away money for retirement and college.

While we are many steps away from it, this land is the backdrop of the "big picture". I look at this image a lot. It is burned onto my brain. I plan out where everything will, outbuildings, garden beds, trees. I learn everything there is to learn about the native flora and fauna, county ordinances, water laws and the weather patterns there for the last 20 years.

This dream (this obsession) is so much a part of me that it motivates me to keep going.

If we don't pay off our debts, we can't live on this land.
If we don't build up our emergency fund, we can't live on this land.
If we don't have retirement and college funded, we can't live on this land.
If we don't save enough cash, we can't live on this land.

Know your "big picture" and it will become a great motivator.


Getting out of debt takes dedication, work and patience. For some people, it happens slowly. For others, it happens more quickly. But it does happen. When you see it happen, when you see your debt going away, it motivates you to keep going.

We've been paying off debt for over two years. Right now that seems like a long time (and we're not done yet) but in the grand scheme of things, a couple years is a very small price to pay for being debt free.

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