Debt discouragement is a real problem for people who are trying to pay off their credit obligations. Most people start their debt consolidation program with all the enthusiasm in the world. They are all riled up to aggressively pay all their debts and it seems like nothing will stop them until they reach their goal.
If only this is something that everyone can sustain until the very end. The truth is, a lot of people may have started strong in paying off their debts. However, not everyone successfully achieves debt freedom.
It is no secret that money is the biggest cause of stress among Americans. A survey revealed that 4 out of 10 Americans identify money as the primary cause of increased stress in their life. Apparently, it does not matter if they are economically okay or not. The money will always have a significant effect on their lives.
Since debt has a negative influence in your financial position, it is not surprising that people are feeling anxious about their credit situation. Even if they already have a debt relief program in place, it will always make their lives a little more stressful. This is probably one of the reasons why people feel debt discouragement while they are in the midst of paying off their debts.
Paying off your multiple debts is hard enough. When the feeling of discouragement hits you, it becomes harder. This is why you should probably try to keep this feeling from taking your enthusiasm in becoming debt free.
How to keep debt discouragement from ruining debt relief efforts
Fortunately for you, there are different techniques that will help you avoid debt discouragement. If you want to achieve success for your debt consolidation program, you might have to implement these in your life.
Have a realistic repayment plan
Sometimes, people set very high payment expectations because they want to get out of debt so bad. While the intention is good, it might not be the best way to create a plan to achieve debt freedom. You may be itching to be debt free but you have to consider your payment capabilities first. It is easy to say that you will set a payment amount and whatever is left of your income will be spent on your lifestyle expenses. However, following through with that plan might be harder than you think. You want to pay as high as you can but do not compromise your comfort when doing it.
Do not starve yourself of entertainment expenses just to pay off your debts. You can lower the frequency of entertainment spending, but do not eliminate it completely. Try to create a lifestyle budget that you can live with and set the highest debt payment that you can afford based on that. If your repayment plan is not realistic, it will be a very heavy burden to carry and it can lead to debt discouragement.
Increase payments when possible
Another thing that you can do to avoid feeling discouraged in the midst of debt consolidation is to expedite the process. Although you have to make your repayment plan realistic, there is no rule prohibiting you from increasing payments every now and then. When you get a bonus or any unexpected financial windfall, use that to pay off your debts. This will help you move forward in your debt at a much faster rate.
Set up milestones with corresponding rewards
Sometimes, debt discouragement can be countered by dividing a project into smaller milestones. According to a study, the achievement of small victories is an effective way for keeping someone motivated to complete a task. When you pair these milestones with small rewards, it will increase the encouragement factor. We all know that debt consolidation can take a long time to complete. Oftentimes, it will take years to finish. You can set up milestones that will give you a reason to celebrate victories. Every time you reach a milestone it will encourage you to reach the next one. Before you know it, you are one milestone away from debt freedom.
Focus on your progress and not what lies ahead
Keeping debt discouragement at bay is actually all up to your mindset. If you approach the debt relief with the right mindset, it is easier for you to achieve success. In this case, you need to focus on what you have paid off instead of what you still have to pay. When you know how far you have come, it is easier to take the next step. If you always look at where you have to end up, you will feel the burden of what lies ahead. There is a level of uncertainty associated with that and it can add to the stress that you are feeling. It is more positive to look at what you have paid off and focus on the next milestone. That way, you will not feel too overwhelmed by the magnitude of your debt situation.
Why debt discouragement is possible in debt consolidation
Regardless of the type of debt relief program that you will use, you will always be in danger of feeling debt discouragement. The bigger the debt amount, the more likely that you will go through this.
With debt consolidation, you are more in danger of feeling this because of the following reasons.
False sense of debt freedom leads to wrong expectations
When you consolidate debt, you get a false sense of debt freedom – especially after you have closed the original credit accounts after the consolidation process. Having that one debt left, although it is a big amount, will make you feel like your debt is not so bad as you thought it was. But when you realize how much you still have to pay, that will give you a reality check and might end up making you feel discouraged.
Lower monthly payments mean slower progress
Sometimes, people opt for debt consolidation so they can enjoy a lower monthly payment. There is nothing wrong with this especially if that is all your budget can afford. However, this will lengthen your repayment period by a couple of months or even years. The longer it takes for you to pay off the debt, the more susceptible you are to debt discouragement. This is why it is better to get a shorter debt consolidation loan repayment period.