Help a Reader: How to Stay Motivated

Here's a question a reader recently left on my post titled How to Get Rid of $106,000 in Debt:

My family is in the middle of our debt snowball. We're one year into it and our motivation is flagging.

We make $50K/year and last year we paid off $20K. We still have $55k left. My husband and I are both working two jobs and we brought our groceries down to $50/week. Last week we had some unforeseen expenses and had to bring the grocery bill down to $28 for the week, including diapers.

In addition, every time we think we're going to get a snowball, our gas, electricity, etc. goes up. So we're paying out $1,000/month in minimum payments.

It's very difficult this time of year because my husband is a mechanic and this is the slow season. On top of that, it's winter and it's hard to keep your energy up during this time of year. Does anyone have any tips on how to stay motivated?

Anyone have some advice for her?

Comments

[Strick]

Wow this reader is doing absolutely fantastic. I think its terribly hard to keep this up (and accept that fact) for the 3 more years that this is on pace to take. They need to feel this can be done quicker which, given the great job they seem to be doing at cutting back, means more income. I'd think a good mechanic wouldn't have a slow season if he branched out beyond his specialty or something along those lines.

I know the question was how to keep up the spirits, but I think the best way to do that in this situation is to bring the planned light at the end of the tunnel closer.

[Moneymonk]

Wow, I hate to say just file BK. I will only take care of the basics first and deal with the debt later, They may even offer 40-50 cents on the dollar as settlement later on.

Take care of food, housing, utilities, transporation first. If there is money left over then deal with cable, entertainment, and debt payments

[Jim]

Its great that they paid off $20k in a year while making $50k. It seems to me that they may be pushing too hard to pay down their debt. I wouldn't be cutting the grocery bill to the bone in order to keep paying that much to debt. If I were them I'd give myself some more slack in the budget and not drive yourself so hard. If you live off ramen and rice & beans for 2 more years you might have a breakdown. So I'd give myself some breathing room. Give yourself another $200 or so to spend on "wants" or luxury things. You can use part of that as reward for meeting milestones in your debt repayment. If you deny yourself any enjoyment and push yourself too hard it will be a hard road for the next few years. But if you give yourself some leway in spending and give yourself some incentives then it will make it a lot more bearable.

You might also want to look into moving. $50k for two incomes including a mechanic is not especially good pay. You might do better off in another city. Course you might currently be in a low cost area so maybe you're already in a good location as far as income / expenses.

[D]

Settlement ruins your credit, I would try and avoid that at all costs (unless there is not other alternative).

I had a question though, The heading says "Here's a question a reader recently left on my post titled How to Get Rid of $106,000 in Debt:", but later on you (the original poster) say your one year into paying the debt off and have $55K left. Wouldn't that mean though that you paid off $51K your first year, not the $20K you said above? Am I missing something?

Most utility company's also have a "fixed" plan, where you pay a fixed amount each month that way it will be constant in all seasons and would be a good option for budgeting. Might help out...

Can you clarify the amount you have left to pay off?

Thanks

[Roy Nelson]

Sounds like they are doing an awesome job. They should think of something to reward themselves with when they get to milestones they have set, maybe a weekend getaway, any affordable treat that they both look forward to. Read about frugal living and saving, it can be fun to learn new ideas and find out what others are doing. Other than that it just takes patients. That's why there are so many get rich quick scemes to play on emotions like they are having right now.

Don't let it get you down, keep looking to the bright future of your family if you keep it up. This is also where faith and Church attendance come in to take those pressures and frustrations away.

[Bobbert]

"If you live off ramen and rice & beans for 2 more years you might have a breakdown."

Or rickets or scurvy.

Ease up slightly, and/or try to refinance.

[MikeS]

I would try and consolidate somehow, perhaps with something like Lending Club. That would allow some more flexibility with the budget. They have done a tremendous job so far, congrats.

[[email protected]]

Sounds like the reader has done an excellent job so far. While 55k is still a substantial amount of consumer debt, it's a hell of a lot better than 75k. I disagree with MoneyMonk's advice to file for bankruptcy. You have already made such great progress, that you are on pace to cut your debt down to 5k in two years. However, as mentioned above you need to reward yourself. Try to make it something you and your family can enjoy without breaking the bank. Maybe and inexpensive weekend trip to a somewhat local vacation town. The snowball effect typically focuses on quick wins first and increasingly harder and bigger wins as you go. If you are to the point where you next win is far away, break it down into a smaller goal. Say, when we pay off 7k this year we will do a weekend getaway. If you haven't already, you should look into rolling that debt over to a zero interest card, that would cut down your repayment time substantially. If you haven't already you should cut cable, switch to dial up internet, look for insurance discounts, and anything else to trim the fat, but don't cut your grocery bill to $28 dollars, that crazy!

[Holly]

The reader is doing a FANTASTIC JOB! She should be very proud of what she and her husband have been able to accomplish.

I would say to her: Make sure everyone concerned understands that you are working toward an important goal (you don't need to get into the particulars) so that you don't come across those types who can try to make you lose sight of your ultimate reward--financial peace of mind!

What you have done takes a lot of disclipine...it's a complete turn-around and probably the opposite of how you had been used to living. I agree with the other posters in that a solution might be to give yourselves some slack, but BEWARE!!!! You must pledge to yourselves that you will not be derailed! Good Luck!!!!

[Mary Kate]

Maybe they have some things that they could sell and use the proceeds towards debt repayment. I don't know how they got into so much debt, but if it was overspending maybe they have some items from those days that they wouldn't mind selling.

They also should make sure that they pay the debt wioth the highest interest rate off first, no matter the amount.

[rdub98]

First, let me congratulate that couple on successfully taking $20k off of their debt. Good job! Now, may I make a few suggestions. Getting rid of debt is as much of a psychological exercise as it is a financial one. They have to understand that they have this debt and will have to make sacrifices for years to come. With that said, though, they need to take care of the essentials first. Don't skimp on food, clothing, and shelter. Those are the three basics of life (get that baby its diapers!). Second, I think that they need to recognize that this is a long term (years) endeavor and lighten up a little. They may be sacrificing too much. Do they have any kind of emergency fund? If not, they need to plan for them n some way, shape, or form.

Some suggestions for saving some money:
1. Look into reducing your electric bill by contacting your electric company to see if you can shop around for suppliers. They may be able to lock in a lower per KWh rate than what they are paying now.
2. $50k is a good salary, but have they looked into whether they could make more by changing jobs? Depending on how long they have been in these positions could possibly help them increase their income by hiring on with a different company. It never hurts to try.
3. Look at your transportation. Could you reduce your expenses by dropping to liability only insurance on your vehicles (if they are paid off)? Carpooling? Dropping a vehicle all together?
4. Look at FMF's list of the 4 billion things you can do to save money. I'm sure he will be happy to post the link again.
5. Take a long hard look at your budget and see if you can reduce spending anywhere else. Remember, concentrate on your larger debts first and pay minimums on the rest. When you pay that big one off, you will get a better sense of accomplishment and the motivation will come with that. Then apply what you would have paid on that one to the next largest debt, so forth and so on.

Last, but not least, don't forget to recognize the great job you have been doing and reward yourself every once in a while. Sacrificing that much for that long WILL drive you nuts, so let off some steam now and then. Just don't go overboard. A dinner out, or a movie, or something small can be a nice reward. That too can help with the motivation.

[Eugene Krabs]

The reader is doing more than great, and I hope that they will keep it up! I know that what they're doing is no easy feat, and that it would be all too easy to ease up or file for bankruptcy (which I don't think is good advice).

However, if you truly desire financial freedom, and don't mind continuing to buckle down to fight for a better future, I think you might want to read up on someone named Amy Dacyczyn, author of the Tightwad Gazette.

http://www.savvyhousekeeping.com/my-frugal-philosophy/

To many, she has taken frugality so far extreme that she seems to frolic in the bowels of cheapness. Maybe. She certainly has her detractors.

However, her numbers don't lie, and to many frugal women out there, Amy is also their champion, their source of inspiration. So, give her a try (if you haven't already). She may be crazy, but she just might be the kind of crazy you're looking for! :D

[jeffinwesternwa]

Sell or let the house go, go rent, then go bankrupt. Live in a older, safe but, cheaper heighborhood. Work more, save more, develop new habits by starting over. No chance of running up the credit cuz if you are bankrupt, yo won't get any for a while. Hubby can keep older cars running (save $$) as mechanic. All this is predicated on about $100K~ of debt NOT counting the mortgage, obviously the title of this article is misleading of your $$ situ so my 16~ years as a financial planner and that info is the input for this decision....

[Cindy]

First of all, HOLY COW are you guys ever doing well!! You make close to what we make, and I can't imagine being able to pay that off much per year! We're very frugal, too, but I have no idea how we'd do it. You are my hero, and better than me in every way.

My only advice, really, is to hang in there. If you paid off that much last year, you already know what you're doing. Staying motivated really only happens because you are able to view your successes and have faith that you can continue to do it. Setbacks happen, but just keep trudging on.

Keep up the fantastic work. The most important thing, I think, is to remember why you're doing what you're doing, and pat yourselves on the back. You are moving mountains! And when this is over, not only will you suddenly feel like you're rolling in $$$, you'll know how to get the most out of it. It's something to look forward to, for sure!

[RetirementInvestingToday]

$20k repaid on $50k earnings is 40% which is a pretty good effort. Hopefully the loan should also be getting the reverse of compound interest effect with more and more principle coming off.

To keep the focus sit down at regularly agreed intervals and plot how the debt is decreasing. That visual should hopefully prove a motivator. Once the debt is paid off in less than 3 years and having proven they can live on 60% of earnings, divert that 40% remaining to the building of assets. Now watching assets grow particularly once compound interest starts to show is motivating.

[Moneymonk]

@D

"Settlement ruins your credit, I would try and avoid that at all costs "

I rather have paid off debt and a bad credit score. Than a good credit score and struggling

[Charles]

After going through 3 years of debt payments for $60K, we know first-hand the difficulty of keeping the motivation. What kept us going were a few things:

1. Finding ways to increase our income. We looked at each raise, job change, mystery shop, or room rented as our goal being that much closer.

2. Cutting our expenses as much as possible. We kept feeding ourselves well, going to the Dr. when needed, and had a small amount of fun money, but we looked at every service or bill as something that could potentially be reduced or paid for in a creative way (eg: Mystery shopping dates where our dinner and movie was paid for).

3. A reason to change. The one of the lowest points in our journey was the day we found out my wife was pregnant with our first child (which was also the day I lost another day job in a matter of 4 months). That and our faith in Jesus made us decide we did not want to be a slave to debt anymore.

It was a hard journey, but we made it through and now have 50% of our income available for what we want to do instead of going towards debt (we're starting a business and improving our home).

[Kelly]

Wow! Fantastic job on paying off your debt!! you guys are awesome!

So your enthusiasm is flagging? Even Gail Vaz-Oxlade allows some money for entertainment in her debt repayment plans.
Can you lighten up for just a month or two? Maybe if you allow yourself 50 extra dollars per month to go out to dinner and a movie during the dark winter months that will be enough to tide you through. When spring gets here you can tighten up the budget again and get back on track.

[Crystal]

Wow! Way to go!

We stay motivated enough to continue to save like crazy by giving ourselves a monthly allowance of fun money. Even if it's only $25 a person per month, it will help keep you two on track.

Also, don't let setbacks throw off your momentum...nobody is perfect and crap happens. Let it roll off your back and keep on going.

A few years ago my husband and I were trying to build up a large emergency fund, but things kept happening to set us back. The A/C needed to be fixed that January and we had to replace the tires on my car that February...it was frustrating to say the least. My hubby exploded (I really thought his head was going to pop). I convinced him to just take a deep breath and keep on plugging away. We quickly got back on track and have been surpassing our goals since then.

Life happens...I suggest learning to roll with it and laugh it off with friends and family. You are doing great!

[Elizabeth]

I have one small thing to add: try to get enough sleep, because being well-rested will help to "keep your energy up", even in the winter.

[[email protected]]

I'd like to recommend using a spreadsheet to track your payments on your debt. Then set small milestones, at various levels and reward yourselves (maybe every $5,000, choose the reward to be something that isn't too expensive). This is what we used to pay off our mortgage early, but the same approach can be used to pay down debt.

[Mike Hunt]

You guys are doing great and making good progress to shed your debt.

I'd recommend you take $100 - $200 and splurge it on something that gives you the most pleasure for this type of outlay. Plan it a week in advance so you can build up to and savor this.

It may be hard for your husband to get more business during this period so you need to focus on more expense reduction.

A good investment in the winter season is a warm, insulated sleeping bag that can be used in the bedroom along with turning down the heat to 60 F, that will save costs during this period. If you can manage this - and believe me getting out of bed is tough in the morning- then you can help cut your expenses.

If it's too much suffering pls feel free to ignore this suggestion, which came from firsthand experience in my youngr days.

-Mike

[Laura]

Focus on the end results/time frame thru visualization
Rewards
Positive self-talk
What motivated you as a child?
------------------------------------------------------
We stayed motivated by focusing on why we were doing this. Also, I kept repeating to myself "it's only X more months." So like others above, bringing in more income and reducing expenses reduces the time, making you breathe easier.

Reward yourselves when goals are met. you don't have to spend much money. We didn't have spending money for the first six months. Each debt was so big that we didn't get that "quick win" so we rewarded ourselves with monthly spending money at the 6-month mark for having made it through. Our first reward after that was a trip to the movies (no food!). Each reward was low-key, but increasingly better.

Also, visualize how you are going to feel when the debt is gone. Use all of your senses. Picture everything in bright colors. Hear the sounds of the kids playing (b/c you are no longer working that 2nd job and at home more). Feel their skin when you hug them at sunset (b/c you're now free at that time to do so). Smell the freshly cut grass of your neighbors' lawn (or your own lawn person doing so!). Feel the ocean waves. Think how grateful/happy/etc. you are that the debt is gone. Infuse your mental picture with emotion. the picture should be up-close, not far away. You should be in the video, not watching it.

Just feeling that sense of gratefulness and happiness for a little while each day will lessen the stress and make you feel better. As soon as you start to feel in a way you don't want to feel, run your video through your mind. This gives you something to focus on.

Also, your self-talk should be positive. Don't say "I can't take this anymore". Say I've made it this far. Or I can do this. Or it's only 26 more months, etc. When you're calm and not stressed, write down things to say to yourself and keep it with you. As soon as you realize your self-talk was negative (and you may realize it hours/days later -- but the time it takes you to so realize will get shorter) say your positive phrases. Saying it out loud is best, but at least saying it in your head will help. if you need to or can, pull out your list of what to tell yourself. Have triggers. A lot of people say to think about your goals in the morning or afternoon, but mine was getting in the car after work. I also did it whenever I could think to, but for some reason it was easier to remember to review my goals after a hard day and I wanted something to make me feel better.

What motivated you as a child? Did the stars on a chart motivate you? I would think maybe recognition, then, would be a motivator for you. If so, you can get someone you trust to track/see your progress. If not, what did motivate you as a kid? Why? Figure out a way to use that now to motivate you.

Happy Hunting!

[Debbie m]

One thing to keep in mind is that these things that are so disappointing such as increased utility costs and reduced income probably used to be much more than disappointing in the past. If you were still increasing your debt, these sorts of changes could be devastating or drive you to panic. Now they are just disheartening.

Three more years seems like a very long time. But three years will go by whether you keep paying off debt or not. And once that has happened, where do you want to be? At that time, you will still have a lot of fabulous debt-free years in your future.

Meanwhile, I wonder if your husband could take advantage of his extra free time to do something fun and/or build up some elbow-grease investments. For example, can he cook things to go in the freezer? Make repairs around the house? Mend clothing? Go to the (nicely heated) library and read up on some more skills? Even if he has to be in the shop during all work hours, maybe he can read there, get all his tools nicely oiled, and do some mending or knitting if that won't get him laughed out of the shop.

It’s hard to keep from feeling deprived. It’s better to remember that these are choices you have the power to make to improve your life. Every time you discover a new recipe with cheap, healthful ingredients that’s also delicious, that’s another victory. Every time you find something fun to do that’s free, that’s another victory. Every time you send in a payment above the minimum required, that’s another victory. (Heck, just getting the minimum payment in on time is a huge victory for some folks!) I wish I remembered who I heard this from, but you can even visualize an enemy that you are fighting such as the devil or “the man” or some negative voice from your past who you are continually defeating, which can make it a bit more fun!

[DB]

We've been hammering away at Operation Financial Freedom for two years now, and have taken our non-mortgage debt down from over 40K to under 8K, and should be clear of it by October (then it's time to hit the mortgage hard!).

We have done all that we can to trim expenses - we call it "working the margins." We've sold stuff. Increased insurance deductables, reduced services (dial-up internet for $10/month, basic satellite for $10/month, etc). I think of every dime I find as ten cents closer to financial freedom - it goes into a jar and that goes directly toward our debt. I'm always looking for sources of "found" money.

I have set up multiple savings accounts to which I target savings money - but the one that gets the most of our "savings" funds is the debt elimination fund - and once a month I take that and put it toward the debt as well.

To keep motivated, among other things I regularly surf and scan personal finance blogs. I don't really get much "new" information, but it helps keep me focused.

Keep up the good work - realize that it will happen, but it will take time...and envision your life free from the slavery of debt - when you will be able to earn money and put it toward your future dreams, rather than your past decisions.

[Tyler]

If you were a company, they would restructure/walk away from most of that debt. Debt equal to 3x income and debt service equal to 40% of income is an incredible burden. At this point the credit score is irrelevant. (A bad credit score might have helped avoid this mess!)

[Holly]

Tyler, I'm afraid you are making assumptions about how this couple incurred their debt. Perhaps they had several misfortunes/family emergencies - who knows? who cares? - which compounded the problem.

Also, I guess you are advising bankruptcy. Of course, that, too can have some very negative repurcussions (loss of job, inability to find employment, etc.) and some just choose repayment over bankruptcy for ethical reasons.

I do agree with you that if you avoid credit then you are most likely to avoid the risk of debt.

[Holly]

Sorry...typo above...'repercussions', not 'repurcussions'.

[Tyler]

Holly, I wasnt making any assumptions about how they got into debt- I find the how irrelevant. I was merely commenting that a firm would likely walk away/negotiate this debt burden.

If you are a registered rep/work in finance then yes there can be some professional repercussions to bankruptcy. I am not advising anything.

1. paying off debt, at the cost of EATING, simply because you fear your credit score, is silly. I could care less about my credit score.
2. The company that made the loan would walk away from onerous debt.
3. They made the loans, charged interest rates to compensate them for default risk. Defaulting or renegotiating the terms of said debt is not unethical- its business.

[Holly]

Tyler- you have the blood of a true businessman.

Just as an example and nothing more, my husband is a police officer... he is not permitted to declare bankruptcy unless he is willing to be dismissed from his position. I do think there are more employers than just those in the financial sector who would view you (bankrupt) to be a risky hire/employee.

We had a family friend declare bankruptcy over 10 years ago. She has her teacher's certification, but she was still turned away from several possible teacher's positions. She can't sign a lease (w/out co-signor) so she lives in her mother's house with her daughter. To date, the best job she has been able to get is a waitressing position. It has been a very tough road for her.

But, of course, they need to figure out for themselves what would be their best course of action to get their lives back together. It certainly shouldn't matter what anyone thinks...

[LoveToBeFit]

As many have said, you're doing a great job! Please hang in there. I don't know where you live but in many, many areas around the country there are freecycle communities. Find them by going to freecycle[dot]org. Everything offered is FREE!! I've seen diapers, food, and clothes (to name a few)in my area. It's absolutely true that one man's trash is another man's treasure.

I am also in debt snowball-mode and am beginning to pay off the larger debts - the ones that take more than 1 year to pay off. I stay motivated by keeping an eye on my net worth each month. I almost look forward to making a payment just so I can see the net worth going up.

Please keep us posted on your progress!!

[David]

Just wanted a post a couple of really encouraging radio programs from Crown. They interviewed a family that had over $130K in consumer debt, and paid it all off. Great, great story--hope it's an encouragement to you!

Program 1 of 2 - http://www.crown.org/media/relatedcontent/102609.aspx

Program 2 of 2 - http://www.crown.org/media/relatedcontent/102709.aspx

[Tarah]

Thank you, everyone for your encouragement. We re-figured it, and we have $51,800 left to go from the $74K we started with in Nov. 2008.

We do live in a cheap area of the country and we bought a fixer-upper when we moved here. It's not done being fixed up, so we don't want to sell if we don't have to. It's cheaper than rent.

As for the food budget, thank you for your concern. We only shop at Aldi's and once a week we have rubber chicken (Day 1: whole chicken, Day 2: Chicken Casserole, Day 3: Chicken Soup). We keep fresh fruit in the house, but we eat canned veggies when the garden isn't in full swing. We did increase our food budget to $60/week and last week I was able to keep it at $55.

My husband is trolling for a different job because he caught his current manager turning away business when the shop was dead. He can do his work in half of book time, so if the shop was busy we would be able to make $125K/year. Unfortunately, Obama thought it would be good to starve the mechanics this year with Cash for Clunkers. We're going to be feeling that for about another year.

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