5 Psychological Tips as You Pay Down Your Debt

I’m probably in the minority here, but I don’t really enjoy having debt.

That’s actually a gargantuan understatement: debt is like a shadow that you can’t shake and that floods your mind when the light hits just right. It’s not a friend. Maybe it started that way, but it’s become a parasite.

Do you find yourself feeling that way? If so, there are some very practical tips you can use to climb out of debt:

  • Tackle your smallest debt first, eliminating payments as soon as possible.
  • Set aside some emergency money in case of disaster.
  • Cut and paste inside your budget (emphasis on “cut”).

But we’re not going to cover those tips in this post. They’re all well and good; in fact, they’re vital to clearing away what you owe. There’s just another aspect to the whole debt-paying thing that often gets overlooked, although it may be the most important.

It’s your brain.

A lot of us have the income and the ability to cut our spending enough to make a real charge at our debt, but the whole endeavor is so overwhelming that we don’t come close to diminishing debt the way we could.

With that said, here are 5 psychological tips for those of you wanting to pay down your debt.

1) Don’t Give Debt the Power It Threatens You With

This may sound insane, but hear me out: Even if you lose everything, you’re actually going to be OK. Deep down, most of us value people over stuff and affirmation over wider recognition.

Bankruptcy is the much-dreaded last resort for those saddled with debt, but while you should avoid it to the best of your ability, you may be shocked to learn that people who declare bankruptcy do not automatically cease to live. They still get to interact with other people, and they still retain all their passions, skills, and memories.

This may seem like an odd tip to begin a debt-paying idea list with, but if you don’t start with this, you’ll never move the hill off your chest and actually get started paying down debt. Once you let go of your fear of the worst that could happen, you’ll be in a far better mental position to actually avoid that outcome.

2) Sign Up for a “Tight-Budget Trial Run”

For some people, the thought of living below their means is excruciating. Who has the time to track every dollar of their spending? Who’s going to run away when friends approach to invite them to dinner?

If this is you, consider trying out a new lifestyle in an intentionally temporary format. Commit to two, three, or six months of making your own lunch, cutting out cable, and finding free forms of entertainment.

Similar to the first tip, this one helps you take away a looming fear, in this case the I’ll-have-to-miss-out-on-everything-for-the-rest-of-my-life fear. It’s far easier to commit to a trial run than to think, “I’ve got to change the way I live, who I am, and I need to make better choices.” The first encourages commitment; the other encourages anxiety.

And you might even find that those few months weren’t so bad. In fact, as you start to see your debt go down, you might even want to keep living frugally.

Pretty wild notion, I know.

3) Open a Savings Account and Put Any Extra Money Into It

Psychologically, checking accounts are not ideal for keeping all the money of people trying to pay down debt.

Income in your primary checking account becomes lost in the shuffle, undifferentiated from other forms of money you’ve received. For example, you may get cash for your birthday and tell yourself you’ll use it to pay off a few debts later. I must think of this money as a gift, you think, and not save it for myself.

Great thought, but what happens? You deposit the money, plan to pay some debts in a few weeks, and when that time comes, you’re feeling like your account balance is a little tight. Better wait to pay down that debt; wouldn’t want to put myself in a bad cash flow spot.

Opening a savings account can be the solution to all of this. Any extra or unbudgeted money you make, you can put in the savings account and consider nearly untouchable. Of course, you can get it out if a real disaster occurs, but otherwise you understand that when that money leaves the savings account, it’s going to pay off debt.

No questions asked. No confusion about how much money you can use to pay down debt. You take the emotions and anxiety out of the equation, which is one of the best things you can do as you work to diminish your debt.

4) Find Some Positive Peer Pressure

You’re going to need people to stay committed to paying off debt. You’re also going to need them to be helpful to that commitment instead of harmful.

If you can, find friends who are or are willing to join you on your debt-paying journey. Challenge and encourage each other. You might even hold a monthly competition for paying down the most debt, relative to your income.

This doesn’t mean find someone to make you feel guilty if you slack on your debt payment. Rather, it means finding people who will see your wise choices as admirable instead of annoying.

Obviously, there’s a huge difference between those two outlooks, and one is going to help you a lot more than the other.

5) Sign up for Debt-Lowering Resources

It’s easy to put debt out of your mind. Instead, try subscribing to blogs and podcasts or reading certain books that are dedicated to debt and financial tips.

This will keep your debt-attacking top-of-mind, yet not in a way that feels discouraging or hopeless. You’ll be listening to solutions to your debt challenges instead of ruminating about what a bad spot you’ve got yourself in.


Where the wallet is willing, the mind is weak.

Or something like that. Debt, as you know, is a beast to tackle, but having the right mindset can set you up for the patient attack it will take to bring it down.

Remember: marathon, not sprint. You won’t get rid of the mountain in a week. But stick with it, and you’ll see chunks of sediment tear off and roll away, then you’ll see more, and soon enough the remaining structure will barely resemble its former appearance.

That’s something to get excited about.

By: Ryan Drawdy
April 27, 2017

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