You’ve done it; you’ve finally paid off one of your debts! Whether it was a lingering store card, a forgotten medical bill, or that one nagging balance that always felt like a weight hovering over you, it’s gone now! Paying off your first debt comes with a mix of pride, excitement, and uncertainty. Before you lose the momentum you’ve built up, let’s walk through exactly what you will need to do now that you have paid off your first debt.
Related Links:
- How To Use The Debt Snowball Method To Become Debt-Free
- 7 Steps You Need To Take When You Want To Quit Paying Off Debt
- 10 Mistakes To Avoid While Paying Off Debt
1: Celebrate Your Win (Seriously)
Before you jump into paying off your next debt, take some time to acknowledge all the hard work you put in! Paying off a debt, even a small one, takes discipline. This is especially true when you are overwhelmed.
Celebrating doesn’t have to cost any extra money either. It can be as simple as writing yourself a note of encouragement, marking the moment with a fun photograph or a journal entry, or even making your favorite meal at home.
Recognizing that you have made progress on your goals helps to fuel your motivation to continue.
2: Share Your Win With Someone Supportive
Whether you tell your spouse, a friend, or share your win within an online debt-free community, sharing your win makes it real. And, not only will it help to motivate & encourage you further, you’ll encourage someone else too.
3: Update Your Progress On Your Debt Tracker Or Spreadsheet
It doesn’t matter whether you are using a printable debt tracker, a coloring chart on your fridge, a spreadsheet, or an app; NOW is the time to update it!
Seeing your total balance decrease and marking one debt as paid off helps you shift your focus to the next debt. Tracking helps to visually remind you that your efforts are working.
4: Revisit Your “Why”
Take a moment to pause and remind yourself why you started this journey.
Was it to:
- breathe easier each month?
- stop living paycheck to paycheck?
- create a better future for yourself & your family?
By reconnecting with your vision of why you started your debt-free journey, you’ll be able to make it through any potential tougher times ahead.
Want to learn how to increase your debt payment without breaking the bank? Check Out [6 Painless Ways To Increase Your Debt Payment].
5: Name Your Next Focus
It can be very easy to lose momentum after reaching one goal. So grab your list, and circle the next debt that you are tackling.
You don’t have to have it perfectly figured out before you move on. Progress is what we are after, so just identify the next debt you’ll knock out. The clarity in knowing your next target will help keep you moving forward.
6: Roll The Payment Into Your Next Debt
This is where the magic happens in paying off your debt! Take the amount that you were paying towards your first debt, and add it to the minimum payment of your next debt. This step is true whether you are using the debt snowball or the debt avalanche method.
While this may not seem like much at first, this is where the momentum in your journey builds up! Every time you free up one debt payment, you are eliminating your debt even faster with the larger payment!
7: Check In With Your Budget
Once you have freed up one debt payment, it is the ideal time to review your budget.
Things to ask yourself include:
- Do I need to rearrange any expenses now that one bill is gone?
- Can I find an additional $10 to add to the next debt?
- Are there any spending leaks I can cut?
Even small adjustments now can make a big difference over time.
8: Prepare For An Emotional Setback
Now that you’ve felt the excitement of paying off a debt, it is completely normal to feel a decrease in energy as you are facing an even bigger balance.
Remember that you aren’t doing anything wrong! Your payoff strategy only grows stronger from here. You’ve proven to yourself that you can follow through and pay off a debt!
This is the time to show up consistently.
9: Be Mindful Of “I Deserve This” Spending Temptations
After a financial win, your brain may start to say, “You’ve earned this little treat.”
Yes, you HAVE earned a celebration, but NOT at the cost of the momentum towards your goal.
What helps me is rather than impulsively spending in the moment, I plan out a low-cost reward ahead of time. It doesn’t have to be a lot; even something as small as a few skeins of yarn for my new crochet project can be enough of a reward and motivation.
This way I can celebrate in a way that helps me to feel good, and keeps me on track towards my goals.
10: Remember To Keep The Momentum Going
You did something that is really hard! It wasn’t just luck or simply starting again. You DID it!
Now that you have the proof and know that your plan is working, you have all that you need to go the rest of the way towards debt freedom!
FINAL THOUGHTS: Your Journey Is Only Beginning.
The feeling of paying off your first debt is a turning point!
You’re not simply dreaming about being debt-free one day; you’re actually doing it! You’re taking the action, making the steps, and building the financial habits that will carry you the rest of the way.
So when your excitement wears off, and you’re facing that next daunting balance, remember:
You are further than you have been before. You are no longer starting… You ARE making progress.
Want More Content Like This? Be Sure To Check Out:
- 15 Budgeting Goals That Every Beginner Needs
- How Your Budget Is The Key To Financial Freedom
- 10 Steps To Find Extra Money For Your Debt Snowball
- Beginner-Friendly Savings Challenges You Need To Try
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