Change Anything QA

How to Finally Get Out of Debt

David Maxfield 

David Maxfield is coauthor of two bestselling books, Change Anything and Influencer.


Change AnythingQ Dear Crucial Skills,

I recently realized we aren’t out of debt because we really don’t want to pay all the money to make it happen! We have been on a debt payoff plan for years but never follow through because it’s so painful to pay our bills when it seems like we are just giving money away. It’s just too hard to catch up when we don’t even know what the balance is for because it has accumulated over several years. As a result, we lose steam after a few months, spend money on a nice night out or an evening entertaining friends, and get off track.

Can you share some tips to help us address our personal motivation and learn to “Love What We Hate”? Do you have any tips for motivating ourselves to get out of debt by turning it into a game we can win and enjoy playing?

Wanting Off the Hamster Wheel

A Dear Hamster,

What a frustrating and sad situation. Not only are you struggling financially, you are beating yourself up for your setbacks and failures. You’re blaming your character when you should blame your plan.

In our book Change Anything we describe your situation as “The Willpower Trap.” It happens when you over-rely on your willpower instead of employing all six sources of influence. Your willpower lets you down, you blame yourself, and you become discouraged and even less successful.

The way out of this trap is to involve all six sources of influence, not just those related to personal motivation. You specifically ask for ways to address your personal motivation—and I’ll get there—but that’s not where I’d like to start. Instead, I’ll begin with structural ability.

Structural Ability. If “a nice night out or an evening entertaining friends” is enough to throw you over the edge, then you’re living too close to the edge. I recommend you take a few steps back by lowering your fixed expenses. I know these are difficult steps to take, but they will do wonders to lower the pressure you’re feeling today.

Find ways to reduce regular monthly payments

  • Reduce your rent or mortgage. Consider renting out a room in your house, moving to a smaller apartment, or moving in with a friend or relative.
  • Reduce your transportation costs. Consider selling a car or trading in your current car for a less expensive car. Downsizing a car will save more than your car payments. It will reduce insurance, gas, and repairs.
  • Cancel non-critical services. Reduce monthly payments by cancelling non-critical services like cable TV, cell phone data plans, and magazine or newspaper subscriptions.
  • Sell unnecessary assets. Sell assets like boats, power toys, vacation homes, etc.

Make impulse buying more difficult

  • Cut up or cancel credit cards.
  • Make tempting locations “out of bounds.” For example, stop going to particular stores or malls, stop visiting eBay and other online retailers.
  • Never shop without an actual shopping list and never buy items that aren’t on the list.

Keep score

  • Keep a visible scorecard or chart that shows your progress—and update it every day or every week.

Add another paycheck

  • Consider taking a second job. An evening or weekend job that brings in an extra $100 a week might give you that extra margin you need.

Personal Motivation. It sounds as if your motivation wanes when you think to the past—especially when you can’t remember where your money went in the first place. Motivation works better when you focus on the future—on where you want to get. Here are a few ideas:

Visit your default and desired futures

  • Select a very specific debt-reduction target. Make it as detailed as possible. For example: pay off my highest-rate credit card, pay off my car, or pay off my student loan. Then dedicate your savings to that goal alone.
  • Select a very specific purchase that your debt-reduction target will make possible. Don’t make this an “optional expense” like a vacation. Instead, make it mandatory, like dental work, tires, or a replacement car. This target will be your North Star, a motivator and a guide when your mood is dark.
  • Think deeply about what will happen if you don’t make your savings goal—if you can’t get your dental care or new tires, or if you can’t afford medical care for your loved ones.

Create a personal mission statement

  • Write down your saving and spending plan and note why it is important to you. Have every family member sign it, then keep copies you can see and read when you feel tempted to overspend.

Make it a game

I like to build four elements into a savings game: a reasonable challenge, clear rules, social interaction, and immediate feedback. Below is an example:

  • Set a weekly goal. Perhaps you could decide on a set figure to pay toward a credit card.
  • Establish clear rules. Maybe establish different rules each week. For example, “This week our payment has to come from new money one of us has earned. Next week it has to come from saved money, and it has to come from our food budget.”
  • Use cooperation or competition. For example, “This week, we’ll cooperate to jointly achieve our goal. Next week, we’ll compete to see who can reach their part of the goal first.”
  • Give feedback and fabulous prizes. Make a big chart that shows your progress. Create magnificent, but free, prizes like paper crowns and towel capes for the Sultan of Savings. Celebrate your very real achievements by writing notes to each other and putting them into a scrapbook.

These are a few ideas to try. None of them are magic and none are tailored to you and your unique situation. In addition, they only deal with two of the six sources of influence. I encourage you to select, modify, or invent your own tactics. Make sure you include actions within each of the six sources of influence and make them big, high-leverage actions.

Best wishes,