Getting out of debt is no easy feat, especially when we live in a society that encourages us to keep piling it on. If you’re like me, you need a goal to get you to the end of a long journey. Not just any goal. It needs to be big and feel like winning the lottery. That’s how big I’m talking.
Today I’m going to teach you how to set goals that get you out of debt, including that big lottery-sized payoff at the end of your journey. In addition, learn how to set smaller goals that keep you on track throughout your debt-free journey.
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Before we get to the goal setting, I want to let you know that I subscribe to the Dave Ramsey take on money. I believe in the 7 baby steps that he teaches in The Total Money Makeover. All of the debt-free tips, ideas, and tools I share assume that you have finished baby step 1 (have $1000 emergency fund set up). Until you have that safety net in place you will continue to borrow money and open credit cards when emergencies arise.
Know Your Debt
Depending on how much debt you have, you may try to avoid thinking about it because of the stress it causes. First things first is to know your debt intimately. Take the time to write out every debt that you have and the total balance of that debt. If you aren’t sure who all you owe money to, take a look at your credit report.
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Set Your Small Goals
Now it is time to set your small goals to achieve paying off your debt. There are a few steps to this that we’re going to break down.
Set dates in the calendar for paying off each debt.
- Be aggressive. Don’t set a date a year from now to pay off $2000. At that pace you will be in debt forever. Instead, challenge yourself to pay that $2000 off in 2 months. Now you have an aggressive goal.
Next, set mini rewards for each set amount you pay off. This set amount can be for each debt that you pay off, each $500 you pay off, or every $1000 that you pay off. Whatever amount you choose, predetermine your mini rewards now. Remember that these rewards should be mini becuase you don’t want to detract from your debt payoff.
Mini Reward Ideas
- Rent a Redbox DVD and have a movie night
- Have a DIY Spa Day (here are some great recipes to get you started)
- Go to the Thrift Store and pick up a new book
- Have a Backyard Campout
- Roast Marshmallows around a camp fire
- Host a Pitch-In Party (everyone brings a dish and their own drinks)
- Invite Friends Over for a Game Night
- Visit a Local Zoo or Museum on a free day (Don’t forget to pack your own food)
- Attend a Free Concert
- Check out a Free Class at Your Local Library
- Splurge on Toppings and Have a Make Your Own Pizza Night
- Spend the Day at a Craft Show to Get Inspired to Create
- Have a Scrapbooking Day with Friends and Family
- Grab a Caramel Macchiato
- Take Your Own Family Portraits at Home
Schedule your mini rewards along with your debt payoff goals. The reason you want to do this is to help keep you motivated for each payoff goal. It also will help you save the most money by aligning seasonally specific mini-rewards with the corresponding payoffs. For example, you would want to schedule a backyard campout in the middle of winter.
Set Your Lottery Goal
This is the big goal and it can be anything you want. It doesn’t happen until all of your debt is paid off and you have saved up the cash to pay for it. If you’ve always wanted to take a European vacation, set this as your lottery goal. Have you dreamed of owning a boat? Then make that your lottery goal.
Why Does this Goal Have to be Big?
Sometimes the idea of being debt-free is too abstract to sustain you when the journey gets difficult. You need that lottery goal to help carry you through the rough patches. You need it when you haven’t had a break in a year and you’re worn down. When your friends and family want to throw a party or take a trip and you have to say no. You need to look at this goal and say, “This is my why.”
Take It a Step Further
When setting your lottery goal, don’t forget to get concrete details in place. For example, if you want to tour Europe take it a step further. Make a list of the attractions you want to see. Plan how long your trip will be. Find pictures of the places you want to visit. Figure out your budget for the entire trip from travel to food.
Our Lottery Goal
Our lottery goal is to buy a piece of land and build our dream house on it. We took it a step further by setting a budget for both the land and the new construction. Then we listed out exactly what we want that home to have from bedrooms and offices to splurges like a home gym. We even budgeted for the cost of having blueprints dawn up. That is how serious I want you to be in your lottery goal. Take your wildest dream and figure out how to make it a reality.
Now you’re ready to set goals that help you get out of debt. Remember that in order to start this journey you have to know what you actually owe. Then set mini-goals to keep your momentum going throughout the journey. And lastly, don’t forget to set your lottery goal to see you through the trenches of your journey. Learn more about the 7 baby steps in Dave Ramsey’s book The Total Money Makeover. Your can also snag printable debt payoff trackers for your Big Happy Planner when you buy my Colorful Candy Budget Planner.
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I’m a nerdy, crafty mom of three adorable little kids. I love writing and creating, but in my non-existent free time I also love karaoke, taking my kids to the zoo, and reading. I got my degree in Science (no idea how that happened) but I took every English class I could get my hands on because, yeah, I’m that girl.