How To Make Your Debt Payoff Plan Stick

young man working remotely at home with paperwork in hands
•••

Adene Sanchez / Getty Images

Paying off debt isn't easy, but having a solid debt payoff plan gives you a step-by-step process to reach your goal of debt freedom. And if you can make the plan motivating—or even dare we say, fun—it will be even easier to be free of all your debt (or debts). 

Having a list of debts, choosing a debt payoff strategy, and knowing the amount you can afford to pay toward your debts are all key steps to take before you can launch your plan. In this article, you’ll learn how to make the plan of your choice stick.

First, Stop Adding New Debt

While you’re working to pay off your balances, no matter the type of loan, it’s important not to take on any new debt. That includes applying for new loans or making purchases on your existing credit cards. Adding new debt can slow your progress by increasing your payoff time and your total debt costs.

One way to curb overspending is to disable some or all of your credit cards. Some cards have a lock feature that turns off the ability to make new purchases. Using this feature can help you avoid impulse purchases since you’d have to turn your card on again to use it.

If you find that you’re at the point where you need to take out another loan, consider analyzing your spending and making a budget. Or, if you already have one, reframe it to meet your latest needs.

For example, the 50/30/20 and envelope budgeting methods can help you live within your means and avoid using your cards or a loan to take on more debt. With the 50/30/20 budgeting strategy, the goal is to spend 50% of your income on needs, 30% on wants, and 20% on savings. In the envelope budgeting method, you identify how much you want to spend in different categories, like gas or groceries, and separate your cash into envelopes for each category. When an envelope is empty, you can’t spend any more on that category, which helps you stick to your budget.

No matter which method you choose, budgeting helps you take a hard look at what you’re spending your money on each month. By seeing all of your expenses laid out in front of you, you can make decisions about where to cut back and save toward paying off debt.

Start Making Payments

Once your plan is solidified, you're ready to start making monthly debt payments according to your plan. Consider writing your payment amounts and due dates on a calendar to help you keep track of all the payments you have coming up. You can make or schedule your payments online all at once, or pay them throughout the month—but ahead of the due dates—if it lines up better with your pay dates.

Setting up automatic recurring payments can keep you on track and ensure your payments are made on time too. Just make sure to confirm that your payments have cleared each month and update your debt tracker with your current balance accordingly.

If you have too many bills due at the same time each month, ask your credit card issuer to change your due date to another date during the month. 

Making extra payments from time to time will speed up your debt payoff timeline and save money on interest. For example, you can use money from gifts, commissions, or bonuses from your job, or your tax refund to pay more toward your debt. If you do decide to make an extra payment on a loan, make sure to indicate that the additional payment should be applied to the principal.

Encourage Your Progress

Tracking your progress along the way is key to staying motivated and ensuring you stick to your debt payoff plan. To do so, consider the following:

Set Small Goals

Set small goals to remind yourself of the progress you’re making. For example, you may set a milestone at each 25% increment of debt payoff, or achieve a mini goal when you pay off each account. Creating small finish lines or wins for yourself can be a great way to motivate yourself to keep going.

Reward Yourself

At each milestone, consider giving yourself a reward to celebrate your progress. For instance, you may make a small splurge on luxury you previously cut from your budget to free up money for paying off debt. It could be something like a spa visit or dinner at a nice restaurant. 

The intent is to celebrate along the way and avoid discouragement if it feels like it’s taking a long time to pay off all of your debt. Just remember what the overall goal is, and be sure to not overspend on each victory and derail your progress.

Just Keep Tracking

As you reach new milestones and set new goals, it’s important to keep on tracking. By seeing your debt whittle down in front of you, it will be that much more encouraging to eventually become debt-free.

You don’t need much to keep track of your progress. The Balance’s Credit Card Debt Worksheet is a simple way to track your payoff progress if you’re focused on tackling credit card debt in particular. There are a few months already added for you, so you only need to add new tabs for each new month.

The Bottom Line

Review your debt plan periodically to be sure your debt payoff order and payment amounts still make sense. As you pay down balances or experience changes in your finances, you may need to make adjustments to your plan to stay on track. If you've chosen the debt avalanche method, for example, you can reorder your debts when one of your interest rates changes.

Staying focused and committed is key to paying off your debt. Tracking your progress, adjusting your plan as needed, and celebrating milestones make a big impact in keeping you motivated in your debt payoff.