Down Debt

4 easy steps I took to pay off my debt

What is your secret to repaying your debts? originally appeared on Quora: the place to acquire and share knowledge, allowing people to learn from others and better understand the world.

Answer by Nicole Lapin, NYT bestselling author and host of the Money Rehab podcast, on Quora:

Being in debt is one of the most stressful experiences I’ve ever had, and I jumped out of a plane on a first date.

I knew the only way to get rid of the sickening feeling of having debt hanging over my head was to get rid of it once and for all. “There’s no better time than the present,” I thought. It was a Wednesday, in the middle of the month. Rather than wait until the first day of next month, as some people might have done, I jumped in. No excuses.

Here is what I did in four steps.

  1. I have acknowledged my debt. I wrote it down on a post-it note and taped it to the top of my computer screen: $5,000. I was already obsessed with it anyway. Having a physical reminder of the hole I had dug for myself gave me head space and kept me motivated to pay it back. I crossed out the number every time it went down, which was extremely rewarding.
  2. I set a deadline. Being in the news business, I was all about deadlines. I knew if I was going to stick with a repayment plan—any repayment plan—I had to set parameters around it. I gave myself two years, which cost me $2,500 a year, about $208 a month, or about $7 a day. Looking at my debt in these terms started to feel a lot less daunting. I mean, $7 a day?? It’s a glass of wine with dinner (less than a glass if you live in Manhattan!).
  3. I put myself on autopilot. Through my online banking portal, I set up an automatic payment of exactly $208. This meant that each month the money came out of my checking account and went directly to paying off that credit card debt. Because I never saw that money, I discovered that I didn’t really miss it (and didn’t even have the option of spending it on anything else).
  4. I remembered why I was doing this. Whenever I was tempted to skip a month’s payment so I could buy myself something or spend a night out, I reminded myself of what I wanted to do with that long-term money: my Endgame. Like starting my own production company and getting a two-bedroom apartment. It kept me focused and after two years I was monkeyless. In fact, at the end of about a year and a half, I was in such a rush to get it over with that I increased my monthly payments to $308 per month (I kept the $8 because it was more easier to digest than a round number – the same way you get the impression that 99¢ is much less than $1). I found myself debt free a few months ahead of schedule.

You might be surprised by the most common mistake people make when paying off debt. It’s not that people consolidate debt the wrong way or make mistakes when submitting payment: the biggest mistake people make is not getting started. So put time on your calendar this afternoon to tackle this debt monkey. Let a friend know you’ve put this time on your calendar, so you have a better chance of staying accountable.

That question originally appeared on Quora – the place to acquire and share knowledge, allowing people to learn from others and better understand the world.