How to Pay off Debt in 2020

Do you plan to pay off debt in the new year? You’re not alone. 

Paying off debt and saving money are almost always near the top of the list for new years’ resolutions.

It's one thing to have good intentions of getting out of debt and saving more money. It's another thing entirely to have a plan of action and the commitment necessary to accomplish make your financial goals a reality over the next twelve months. 

Unfortunately, most New Year's resolution-makers will never achieve their goals – staying instead at the level of wishful thinking. There are, however, a percentage of people who break through and achieve remarkable things. 

What is the difference? I believe it boils down to one essential skill:

Learn all you can about the resolution keepers and commit to modeling their behavior for an extended period of time.

Statistically, half of all readers will stop reading right here and not bother reading the rest of what I'm saying. Why? They are looking for the quick fix: the miracle pill, the lottery winnings, the wishes granted from the magic genie. Once they've read my solution, they'll see that it involves work and look for an easier path.

If you are serious about saving money and getting out of debt, let me start you off in 2020 with a few tips:

1. Get educated.

Read blogs, articles, books, listen to podcasts and radio programs, and attend workshops on moving ahead financially. Money and time invested in education on this subject will pay you back many times over. 

Your focus should be on personal growth – not services like debt consolidation. If you'd like counseling assistance, please start with The National Foundation for Credit Counseling www.nfcc.org.

2. Map out your spending plan.

Look at the past 3-6 months and use free apps like Mint to visualize where everything is going. Only after you can see everything, should you make realistic decisions about how you will attain your goals.

You can only get ahead from reducing spending or increasing income. In my experience, it is far easier to save $200-$400 from a grocery bill, for example, than to earn that month after month from a part-time job. You don't have to become a full-time couponer to see that kind of savings. Simply stock up on great deals rather than paying full retail for things you need. That tip, alone, can save you $100 a month easily.

If this is a husband-wife budget, a successful give-and-take to get the spending plan right can really strengthen your relationship. It's smart to budget some flexibility each month. There will always be emergencies and unexpected expenses. Plan in advance for them. 

Similarly, events like summer vacations, birthdays, back to school, and Christmas all require a bit of money set aside. Do not plan on paying for Christmas in December. Christmas should be saved for each month of the year. Better yet, keep your eyes open for amazing deals throughout the year – and save them for Christmas 2021.

3. Commit to the long term.

When you see the pain of credit card interest all mapped out over a lifetime, you'll see why it's so important to commit to a debt-free life. It can be done – but it may take a season of sacrificing. 

Live ‘financially proactive’ for a time and you will come out so far ahead in the long run. It will make all the difference in when and how you can retire. It will make the difference in what your children will do after they graduate high school. It will make the difference in how you enjoy next Christmas. 

I know it may be stressful to even think about saving for retirement if the current bills aren't even being cared for. Changes need to be made in order for the cycle to be broken, however. If you'll commit to positive changes each month in 2020, you'll be in such a better position for 2021 and you'll be so grateful to yourself as you cross those finish lines along the way. 

When you finally achieve that day when you are debt-free, you will feel that elation not just from that final payment but from the satisfaction of many months or years of discipline.

As you see yourself making small achievements, do not ‘celebrate' by going off-plan. Stick with your plan for the long haul. Surround yourself with friends who will influence you for good. Find mentors who will inspire you to create all the abundance you'd like. 

I'd consider it an honor if you'd keep an eye on my column each week throughout 2020 as I give you new tools to move ahead financially and help you keep more of your own money through smarter shopping and spending.