Updated on 09.16.14

7 Steps To Help You Focus On Being Debt Free

Trent Hamm

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.

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  1. Steve Olson says:

    We’ve been debt free since 2002. I was difficult but we did it using some of the steps you’ve outlined. The only debt I have is a very reasonable mortgage payment, but no consumer debt. Our new rule is… if we can’t pay for it today… we can’t afford it now… but we will make plans to create more money so we can have it later.

    I actually believe in creating a greater supply of incoming money to deal with this problem. If we want nicer things… we ask… how can we make more? We never ask how can we borrow more.

    Great post!

  2. Lynnae says:

    Excellent post! I’ve found that my 9 year old is great for motivating us to stay on track. When we discuss grabbing takeout, she’s the first to say “Aren’t we supposed to be saving our money?”. Our goal of becoming debt free has really become a family affair.

    I love the idea of a debt-meter! I may have to make one and hang it up.

  3. Absolutely fabulous post. Definitely get the kids involved as much as possible. You may find resistance at first but if they’re disconnected it’ll be resistance through ignorance, which can be much worse. Also, if they’re involved they may learn a life long lesson that they can teach others from as well.

  4. dong says:

    Yeah, I think alot of parents underestimate their children. I think one of the biggest reasons I’ve had generally speaking a pretty healthy attitude towards money is because my parents ensured I was involed as a kid. They got my brother involved in family decisions, and valued our opinion. Sure like any kid I wanted material things, but at least I understood when I couldn’t get them why I couldn’t get them.

  5. Amy says:

    There were two things that really helped me when I was struggling. The first is looking very carefully at regular expenses – what got me most psychologically was the sense that there was very little left after I’d paid all my bills. The second thing that really helped was explicitly budgeting fun money. Even if it was just $10 or $20 a month, knowing I had that available, and that I could enjoy spending it without guilt, really helped give my spirits a lift.

    Also ditto talking to the kids. If you’re trying to pretend that everything’s fine financially, they’re not going to understand why they can’t have the same toys, gadgets, expensive sneakers, etc. as their friends. Keep in mind that misery loves company, by which I mean that it’ll be easier for your kids if they see that everyone in the family is sacrificing. It’s easy to feel picked-on at that age.

  6. rxforfinance says:

    I have tried to explain it in how many working hours it takes to buy the items the kids want. When they ask me why mommy has to work I say, remember that Wii game? Well mom has to work 8 hours (after deductions) to pay for it. Going to McDonalds? 2.5 hours, etc.
    Soon they get the idea that the less that is spent the less hours mom or dad will have to work.

  7. Amber Yount says:

    Good ideas! It gets rough trying to climb out of the debt hole.

  8. plonkee says:

    Absolutely get the kids involved, but try to avoid any feeling of despair with them. You want them to believe that its something that can, will and has to be done, not something that is ruining your lives.

  9. Brip Blap says:

    I think in America we’ve grown too accustomed to thinking that the kids need to be protected from the outside world as much as possible, unfortunately due to the fact that the outside world – murders, wars, etc. – is so grim. But that doesn’t mean that your children need to be protected from family finances.

    People are afraid to let their kids think that everything isn’t perfect. In the status-conscious area I live in, people are afraid to admit that “hey, I don’t see the need and can’t afford the latest gadget” for my kids. If I had a dollar for every parent of a teenager who’s told me “I HAD to get my kid an iPod” I would be as rich as Steve Jobs (which, I guess is why he’s as rich as he is, right??)

  10. Sarah says:

    Great ideas! When I was younger, my parents had some money troubles and they let us know. We were more aware of what we wanted and asked for.

    Also, to help teach the kids, provide them with a small allowance (if you can afford it) to show them how budgeting works, too. When they ask for something, remind them that they have an allowance and if they want something that’s not really necessary, they have to save up for it.

  11. Nick in Iraq says:

    I also have to chime in and say great post. My parents fought a lot about money. It sheltered me from learning about money until I got older and had to make mistakes. Get your kids involved early and they will thank you. Here is the post I wrote about my parents having financial trouble:


  12. Dough Roller says:

    One of the hardest things for me is denying my kids something they want when they´ve run out of money. But if I let them spend more money than they have, I´m teaching them to live beyond their means, which is a habit they´ll regret later in life. And this goes to the question Trent addressed of how not to lose focus. Getting and staying out of debt requires us to deny ourselves short term wants for long term gains, and that´s very difficult. But once you get started and see the positive results, staying focused will get easier.

  13. I agree wholeheartedly with Steve Olson. Our plan of attack whenever we feel we’re backed into a corner with feeling that we “just don’t have enough” for something we’re needing (or wanting) is to try to find a way to make more to cover our expenses. However, my heart goes out to people who feel despair in this capacity as I can imagine how tough it is to juggle life’s responsibilities once kids are growing up. This is the reason we delayed having kids until we felt completely secure about our finances — but these too have its tradeoffs…

  14. Elizabeth says:

    Great post. We have included the kids in our forward quest to be debt free and to own our own home instead of renting. But now even the kids are becoming weary. Our 12 year old states that he’s skeptical that we will ever get a house before he is in high school. It’s hard to convince him that the slow steady race will be the victorious way.

  15. Susan says:

    Another idea is to get the kids actively involved in saving money – they can assist with some of the more time-dependent but simple tasks – clipping coupons, scanning the grocery ads for sale items, helping to shop, put away groceries, prepar home-made meals for the week, make their own lunches for school, etc.

    When they are old enough, they can “run” these frugal activities on their own. When I was a teenager, I was “in charge” of the coupons – and I received a 1/3 cut of the coupon savings for my own fun money.

  16. Rob in Madrid says:

    Make Frugality a game!


    My wife and I are shooting for our first ever credit card free holiday and rather than being discourage about not being able to spend money I make it a game to see if I can save more than the previous week. The thought of not having to come back to CC bills after holidays is a huge motivating factor. I remind myself that when I tempted to eat out for lunch that 4€ Starbucks sandwich is money that could go towards holidays I decide I don’t mind “brown bagging it”.

    Also to prevent us from over spending on holidays we’ve set out a budget and more importantly a list of things we want to bring back with us. this will help prevent us from “going nuts” at Walmart and the mall. I made my budget generous to cover everything and again I’ll make it a challenge to see how much I can come in under budget.

  17. Good suggestions, as always! I like the one about having a list of free things that make you happy. I think we’ll have to try that.

    I also find frugality to be a fun game. My wife not as much, but she has her moments. We’re both interested to see how we raise our kids (baby due in August!)

  18. As much as possible, suggest the kids generate their own money for things they want — whether by working at jobs, babysitting, or selling off or trading their old stuff (via a yard sale, Craigslist or local ads). That’s the best way to learn to appreciate the value of a dollar.

    Kids often want the newest and best … but if you can find a really good consignment or thrift store, sometimes you’d be surprised how far a dollar can stretch.

    Most of all, try to repeat to yourself often enough that you can believe it that your kids likely have everything they need and more than many people: A home, a family, love, food on the table and clothes on their backs. We often gain new gratitude by reading about ‘the old days’ in books like Little House on the Prairie – where the kids got one tin cup of their own for Christmas and were over the moon with thankfulness.

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