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Staying Motivated to Pay Off Credit Card Debt

Friday, 29 May 2009 | 2:19 PM ET

The government is doing its part in helping to manage unfair credit card charges and now we need to help them. Each of us is responsible for managing our debt, and doing our best to pay it down so we’re not stuck in overwhelming situations.

In my experience, if you don’t have a compelling reason to pay off personal debt, you may struggle harder to succeed at it. Anyone can tell you that you should pay down your debt, but unless you have a desire or dream that motivates you to shift, you likely won’t. You’ll keep repeating the same patterns that got you there in the first place. Whether it be purchasing a new home, planning your next vacation or preparing for retirement, find your compelling reason and take actionable steps to achieve it.

Once you have identified the compelling reason for change, it’s important to create a complete picture of your financial situation in the following three areas. It is easier to stay motivated when you understand your full financial situation and work to improve it.

1) Past – Review and pay for all of your past choices today.

2) Present – Review your current monthly bills and keep track of all purchases. Live the quality of life you want today on a cash basis, not a credit basis

3) Future - Plan for your short-term, mid-term and long-term financial goals and make them a priority.

As you make changes to improve your financial situation, you may need to remove the negative influences in your life. This is what I call your “crabs in the bucket” -- the people who enabled you in your debt-induced life. They may not be your best pals once you choose to change your financial patterns. Other “crabs” or obstacles are time, money, debt levels, interest rates, or even yourself! Determine what these obstacles are in your life and do your best to manage them.

Another big motivator is setting several small financial goals along the way and then rewarding yourself when you meet them. These goals should be specific, measureable and realistic, such as, I will only eat out once a month. Create a contest with yourself and see how much you can exceed your own expectations. This will energize you!

Julie Murphy Casserly, CLU, ChFC, CFP®, is a contributor to On The Money. As a 14-year veteran of the financial services industry and founder of JMC Wealth Management in Chicago, Julie helps people understand how their emotional attitudes and behaviors affect how they earn, spend and save. She is author of The Emotion Behind Money: Building Wealth from the Inside Out.