5 essential things to do to keep your debt payoff goal on track

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You’ve decided enough is enough. You’re fed up with the payments, the stress, and the feeling of having your debt constantly holding you back. You’re ready to have it wiped out for good!

Making the decision to tackle your debt is the first step toward debt freedom. And if you’re anything like me, you’ll dive right in and learn as you go because, let’s face it, simply starting on a goal is the hardest part. But if you think ahead and plan your journey just a little, you can prevent obstacles (and there will inevitably be obstacles!) from slowing, or even stopping, your progress.

Five ways to keep your debt payoff goal on track

1. Know your “why”*

Ask yourself why you want to pay off your debt and what your life will be like as the result.

Do you want to have less financial stress? Stop living paycheck to paycheck? Buy a house? Pay for a wedding? Change careers? Financial independence? Early retirement?

Knowing the reason you want pay off your debt gives you the motivation and incentive to push on, even when the going gets rough. Without any clear definition of what direction you want your finances to take, debt payoff is likely to slow, or even stop, not long after starting.

*This “why” is the reason you want to make changes, not “why is this happening to me?” (which is unproductive and futile).

2. Know who and what you owe

It’s tempting to just jump in and start paying down debt, but it’s ill advised to do so without having a crystal clear picture of exactly how much and who you owe.

Organization is important to successful debt repayment. If you have your bills from all lenders, go through them and record the lender, amount owed, and interest rate on a sheet of paper, spreadsheet or free online app, such as Mint.com or Debt Eliminator.

If you aren’t sure you have your bills from all lenders, get free credit reports to find out which creditors are reporting to credit agencies. To get a clear picture, it’s best to get reports from the three main credit agencies: Equifax, TransUnion, and Experian as each may have different information. Credit Karma offers free credit reports, monitoring and tools to help you along the way.

You should then call lenders directly to get current amounts owed and sign up for online access to easily track the latest activity on your accounts. Taking the time to do this upfront work will payoff over the long haul.

3. Track expenses

Debt repayment requires paying more than the minimum monthly payment, particularly when it comes to credit cards. In order to pay more than the minimum, you have to find extra money in your budget to throw at the loans.

Without knowing exactly where your money goes, you will never know what expenses can be cut back to find the extra money. You must track your monthly expenses.

Gather your bills and receipts for the month: utility bills, credit card statements, receipts, and mortgage/rent payments and then record how much you spent in each main category (food, utilities, clothing, entertainment, etc.). Simply record this on a piece of paper or spreadsheet or use an online tool. I recommend using the Personal Capital expense tracking tool (it’s free) to make the process easier.

Evaluate those monthly expenses and decide where you want to focus on cutting back to free up extra money for debt repayment. Make a plan and experiment to figure out what works best for you.

4. Have an emergency fund

Expect the unexpected. Unexpected expenses pop up frequently, but if you anticipate these expenses and build an emergency fund to deal with them, you can avoid any further debt when you need that car repair or your furnace decides to die.

Put in whatever amount works for you ($1000 is oft recommended), but be sure to have enough to cover any car repairs, travel, home maintenance or insurance costs you foresee for the coming year.

5. Make a plan and set goals for debt repayment

Without a plan for how to repay your debt, you will have no direction and, inevitably, will hit road blocks that could stop you from reaching your goal.

Prioritize your debt. You may choose to pay off the loan with the highest interest rate first, or maybe you want to focus on the smallest debt that can be eliminated quickly to provide momentum. The snowball method is an excellent way to prioritize debt.

Write down your goal, the actionable steps you will take, create accountability and set a timeline for reaching it, but be sure to give yourself some leeway here. Diving into debt repayment by severely cutting expenses leads to deprivation that can cause us to stop a short time later. Be sure you are still including some of the things you love into your budget.

Create small wins along the way to keep the momentum going. Sometimes having a large goal feels out of reach and our motivation wanes because it seems so far in the future. Set smaller goals that can be reached in a shorter amount of time to feel successful along the way to your goal of debt freedom.


Here are some tools that I use myself that you may find helpful:

Want to painlessly save more each month (without even lifting a finger!)? Try out Digit. I really thought I was saving all I possibly could. Digit proved me wrong. See my review and updates on how much I’ve saved here.

Personal Capital tracks your expenses for you for free! Have all your accounts in one place and utilize their free expense tracking tool! I use their free net worth and expense tracking tools. Sign up for a FREE Personal Capital account.

This post contains affiliate links, which means that if you click on one of the product links, at no additional cost to you, I’ll receive a commission if you buy products through these links. See the full disclosure here.

24 thoughts on “5 essential things to do to keep your debt payoff goal on track

  1. I can’t agree enough with the first point “why”. Doing something without intention is about as effective as having not done it at all. Quite often I work with people who want to earn more money and take on a lot of extra stress / travel in their lives. But is that really making them happy? Is that working out for them the way they wanted? Sometimes just stopping yourself and asking why or if this is going to get you closer to what you really want could save you a lot of trouble in the end.

    1. Thanks, DW! Agreed, getting the money/time balance right can be difficult and earning more isn’t necessarily the best answer. Sometimes I think we need to take a step back and look at what’s most important. We’ll never get our time back.

  2. Tracking progress was huge for us. Both seeing how much we were paying it down, and also seeing how much interest we were avoiding. (We had a spreadsheet to calculate this.) It was very motivating!

    1. Thanks, Kalie! Tracking progress is a big thing for me too, as I love to see where I was and gauge my progress with all of my financial goals. Tracking savings on interest payments is a great idea!

  3. Getting organized and tracking were keys for us. The budget and net worth were eye openers. During our debt repayment I so looking forward to updating our progress each month. To see the improvement we had made and show the family the results. Getting organized on paper, excel spreadsheet or software are the first steps I recommend when someone is just getting started.

    1. Thanks, Brian! Tracking is a huge part of successful debt repayment! Seeing the progress definitely provides motivation to stay the path. It’s great that you shared your progress as a family – having everyone on board helps tremendously. Having a visual is a necessity, for sure.

  4. These are great tips Amanda and I think that knowing the “why” is the most important one. Luckily, we’ve only got the mortgage left as far as debt is concerned and my “why” for working it down is to achieve financial independence.

    We’re planning on having the house paid off in nine years, especially since we just refinanced our mortgage to 2.875% – WaHoo!

    1. Thanks, Jon! It’s great that you plan to have your house paid off so quickly and your rate is really low! Your “why” is very much like my own.

  5. Great Tips Amanda, especially like #5 – setting goals and tracking your progress is very motivating and we have seen a lot of positive change from it over the years.

    1. Thanks! I’m a huge fan of setting goals and tracking progress. It can be incredibly motivating to get a ways down the road and look back at how far you’ve come.

  6. I like one of the YNAB (You Need A Budget) rules….give every dollar a job. Once I started looking at a budget this way, it seemed a little less burdensome & more straightforward.

    We don’t look at the balance every month for our home loan, but check it maybe once a quarter. At this point, our snowball is still like the snowman’s head instead of the base.

    1. Hi Josh! Giving every dollar a job is a great way to look at it. I obsess over balances, so I think I should take a page out of your book and just check each quarter instead of each month. We’ll see if I can contain myself. Love the snowman analogy 🙂 !

  7. Your first point is the most important in my opinion. Knowing your “why” is what will keep you motivated, even after working towards a goal for (potentially) years and years!

    1. Thanks, DC! You’re right, knowing your reasons and what your end goal can keep the motivation going for a very long time!

  8. You would think that #2 (Know who and what you owe) would be a no-brainer, but it’s a very important point to make. I had my financial head so deeply dug in the sand that I had no clue who or what we owed – let alone what interest rates we were paying. Good list here Amanda!

    1. Thanks, Ruth! I think when you’re overwhelmed by debt, it can be easy to overlook the importance of organizing what you owe, but it is so important to know to make an informed plan for repayment.

  9. I agree with every step on this list! It definitely takes time and you have to follow through and set yourself up for success.

    1. Thanks, Holly! You’re right, it takes hard work, patience and perseverance, but it can be done!

  10. Great article Amanda! Lovely site by the way! Lots of great info on here and I love how clear and easy you make it to design an plan. One more thing I would add is that you have to BELIEVE you can actually get out of debt. I have seen people lay the best plans, but doubt themselves from the start and give up all too easy.
    Keep up the great work!

    1. Thanks so much, Andrew! I completely agree with you – first thing you have to do is WANT to get out of debt, but to get anywhere you definitely have to BELIEVE you can do it and this can often take a shift in mindset (I’m in the process of formulating a post about belief in your ability to accomplish goals – great minds think alike!? 😉 )

  11. I have a sibling who just doesn’t keep track of many things well (and his finances are certainly one of them!) And he is in financial trouble right now. Such an important point to know what you owe and who you owe it too. It’s not going away – so make peace with it and make a plan. Great ideas Amanda!

    1. Thanks, Vicki! Organization is really a necessity in this case and it can be hard to come face to face with everything you owe. But you are right, it’s not going anywhere on it’s own.

  12. Yes! Staying motivated can be tough, especially when you know you will be paying off debt for the next few years. To help me stay motivated, I love to read personal finance blogs about repaying debt. Seeing others reach their goals shows that with some dedication it is possible and there is a light at the end of the tunnel. It is part of the reason I decided to start my own blog.

    1. Hi Paige! Personal finance blogs have kept me motivated over the years, for sure! When I stopped reading them for a year, my finances reflected that. It’s very inspirational to read others success stories. And I agree, this is why I started my blog as well!

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