While I was busy unpacking boxes, Amy wrote to me with the following story.
We’re trying to dig out of our debt but it is slow going. And hard. Especially with a 14yo daughter and 10yo son who both expect certain material things. How does a person not lose the focus on the goal of being debt-free? we still have no savings, no other form of retirement savings than only what my employer contributes. we’re living paycheck to paycheck. Despair is becoming too regular a visitor.
I understand the feeling. Freedom from debt can often feel like a wall you’re trying to climb while people tug at you from below, trying to pull you back down. It can be very hard to escape, and the more things that pull on you, the greater the challenge.
So how can one fight off despair and keep the focus on being debt free? Here are seven suggestions that will hopefully help Amy keep her family and herself on the right track.
Get the whole family involved in the debt freedom project. Talk about it with the whole family. Many people underestimate how much everyone will chip in to a general family project like this one – if you explain to your children that you’re all working towards a goal of having no debt and why it’s important, they’re a lot more likely to understand and be in alignment with the goal.
Set tangible short-term goals. State that you’ll make an extra payment on a debt this month and plan to reach it, for example. Make that goal clear to everyone in the family so that when materialistic things come up, you can point to the goal.
Have an emergency fund. You should have at least a month of take-home salary available to you as an emergency fund. This way, when something bad happens, you won’t have to build more debt to cover the expense. Focus at least part of your debt repayment money at first building up
Make frugality a game. Challenge everyone to find ways to save some money in their daily routines. Praise anyone who comes up with and implements a good idea, and try to incorporate these ideas in everyone’s life. For example, if your daughter gets into replacing light bulbs with CFLs and LEDs, encourage it and get all the bulbs in the house replaced.
Visualize the money you save from frugal choices. This works very well for getting a family involved. Literally create a frugality jar, and when you make an active choice that saves money, put some of the money you saved in that jar. Let it sit out where you can all see it, then regularly take it to the bank and then use it for debt repayment. It makes your frugal moves very tangible.
Make a list of free things that bring you happiness – and use them regularly. For me, it’s hugging my son or having him sit on my lap when we’re eating a snack, kissing my wife, taking a nap on the couch in the family room, and so on. When I want to spend money, I try going back to these things and quite often find that, indeed, the best things in life are free.
Keep the “good” part of what you’re doing in mind at all times. One of my favorite tricks is to create a “debt meter” and keep filling it in as you pay off the debt. Keep this meter in a place where you’ll visually see it all the time and you’ll realize how your moves are paying off.