Goal Setting: Getting Out of Debt Once and For All

By Nora Dunn. Last updated 4 November 2017. 12 comments

It is easy enough to say that you have a goal of being debt free in “x” months or years. You have crunched the numbers, and your plan is realistic and achievable. But why is it so hard to actually put into practice?


Isn’t it interesting how impatient and short-sighted we generally are? A friend of mine has gads and gads of consumer debt – the worst kind, with high interest rates and very little to show for it at the end of the day. And yet she is also the first person to whip out her credit card and dig an even deeper hole of debt in the name of “treating” herself. She is tired, she works hard, and she has been good. Time for an expensive dinner. Sadly, the expensive dinner (along with a host of other similar “treats”) will haunt her for years to come as she continues to try to get out from under this increasing pile of debt. Every time she is faced with the reality and magnitude of her arrears, it seems she makes yet another purchase to drive the stake in even further, seemingly having lost hope that she’ll ever get out of debt and figuring that at least she’ll have a good time going down in flames.


At first blush, I would say she is not motivated enough. Given enough motivation, you can truly do anything, and I believe that. (Look at the people who are maimed in car accidents, told they will never walk again, and in the face of such predictions they are walking inside of six months. Those are motivated individuals).

As a financial planner, I watched a couple with a modest income purchase and pay off a large house in five years. In the name of preaching balance in life, I constantly questioned their actions and suggested they at least diversify their savings and have the house paid off just a little bit later. But they only had eyes for a mortgage-free house, and despite logic or any other argument, they had to have it. They didn’t mind all the corner-cutting and super frugal living they had to do in order to have that house paid off, because every time they were faced with a potentially distractive “want”, they simply envisioned a mortgage-free house, and were able to keep their goals in perspective.


But I believe there is more to my friend’s debt quandary than basic motivation and goal setting. I believe the types of goals she is setting is the catalyst for her failures. What did the couple above get at the end of the day for their five years of sacrifice and effort? A mortgage-free home. That is a pretty big goal, and a reward they immediately reap the benefits of by having extra money each month which doesn’t have to go towards a mortgage. It shaped other life goals they had such as travel, retirement savings, having children, and taking career breaks.


What is my friend’s goal, and why is it not giving her that special something our mortgage-free couple had to hang on to? My friend’s goal is not lofty, and not unrealistic; it is simply to be out of debt.


But it is in the basic simplicity of the goal that my friend goes awry. What does it mean to be out of consumer debt? Not much. It is basically a “return to 0” scenario; one which doesn’t hold much excitement or reward at the end of the day. Sure – she won’t have a mass of debt hanging over her head like a dark cloud, and she will have extra money to play with that formerly serviced her debts. But it is obvious that these benefits are not strong enough to give her the proper motivation to make the sacrifices now for the benefits later.


So how do we fix this? Here are a few ways you can set financial goals that create a better sense of motivation and ultimately help you to attain them.


Shoot for the Stars, Hit the Moon

If my friend decided not only to be out of debt, but also to have a down payment saved for a house, she might have a little more pep in her step. With this new goal in mind, she isn’t focusing just on debt, debt, debt, as there is a school of thought that says as long as you focus on the negative (even if it is to eliminate it), the negative is all you will get.

Instead, she is focusing on something she can only dream of having right now: a property. When faced with that expensive dinner out she would like to have, she can focus on living in her comfortable new home, and maybe that vision will be enough to curb her appetite for impulse spending. Or maybe the focus can be having children. She wants children, but would like to be on solid financial ground before getting pregnant. If she focuses on the day she is out of debt as being the day she and her husband will try for children, she may be more successful in her debt-reduction plight. Having a vision to hang on to that is more emotionally charging than simply being out of debt can be very powerful.


Reward Yourself Along the Way

The longer-term your goal is, the harder it will be to achieve it without getting sidetracked. Hence, the bigger your debt load is, the harder it is to see the forest through the trees. So although it may initially sound counter-intuitive, create rewards that you can enjoy when you reach and surpass certain debt-reduction goals. Enjoy that nice dinner out each time you pay off – and cut up (or freeze) – a credit card. Buy that new game you want when you reach the halfway point to being debt free. Yes, this reward may involve a backwards slide initially, but if the milestone and reward you set is alluring enough, it may just be what is required to keep you on track on a course you may otherwise not have had the discipline to maintain.



Getting out of debt is the plight of many people, and the goal in and of itself is the downfall of many more. Instead of focusing on the mistakes you have made or the crappy hand life dealt you to land you in this position, try to look forward, move on, and find the silver lining. By making getting out of debt a simple by-product of a different and more exciting goal, you too can get out of debt once and for all.

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Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

Guest's picture

It seems to me that in our consumer driven society, too many people like your friend are trying to meet basic human needs, like respect, affection and love, with material "stuff." That, and emotional immaturity that demands instant gratification and "treats" because they have been "good." My depression-era parents must be rolling over in their graves.

Guest's picture

Sometimes when a person is so exhausted that he/she needs a treat almost all the time, a health check-up may show that there is an underlying medical condition. That's what happened to me.

Just a thought.

Guest's picture

There is another aspect of emotions that I think is obvious once you look at the reasoning she uses for buying the dinner on credit: The thought process is, "I've been good, so I should have a reward."

Basically this is saying that there is an emotional reason for her spending, it is more about comfort than it is about needing the dinner.
You really want to get tot he point where the concept of "being good" has absolutely nothing to do with the concept of spending money, because really, whether you have been "good" or not is irrelevant. What's relevant is whether you are moving towards your goals, and any time you justify spending (translate: justify spending = deny reality) by saying you "deserve it" you have committed a non sequitur.

What she really deserves is to treat herself right by building some financial security and stop shortchanging and undermining herself financially.

If she stops spending on these unaffordable luxuries, she WILL be faced with looking at whatever emotion is behind her spending, which might not be pleasant at first. But if she can be aware of the emotions that she is feeling in the absence of her (out of control) spending habit, she will be on the first step to healing them. And once she has done that, she can begin to look forward to finding a greater meaning or goal in her life than simply "comfort today". I do think that in the end I have come full circle to the point you made in your post, which is that if she has no ability to constrain her spending, she likely she lacks a life goal that is meaningful to her. But I think that actually it is her trying to paper over this lack of meaning with her spending habits that is creating the overspending, and if she is willing to sit by herself and not spend for a while, she will begin to be able to see that gap and from there will be able to make a change for the better in her life.

Guest's picture

I do agree that "being out of debt" is not a lofty goal, and it really needs to have something more meaningful attached to it. Because, in reality, being out of debt is just a stepping stone in one's financial life, you have to go way beyond that to really be in a healthy financial state. So having some of the benefits of being out of debt in mind, and some loftier and more important goals, *is* very important, as you say.

For me, realizing how many life opportunities I have passed up because I felt insecure because of my a) debt and b) lack of savings was the kicker. I realized I wanted the freedom from worrying about starving or being homeless just because I lost my job, and the freedom to take advantage of opportunities and ideas I have by having enough money in reserve to take care of myself for at least a year without income. From there, I realized that I would need a heap of cash and/or investments to support myself when I am no longer able to work (older or retired). So meeting those cash reserve savings goals and getting on track for taking care of my older self have taken priority over any form of *unnecessary* spending at this point for me.

Maggie Wells's picture

Thank you! I've been there.

Margaret Garcia-Couoh

Guest's picture
Bill M

Being out of debt is the best thing anyone can do, just the psychological boost, better health etc, no waking at night because of bills that are coming due.

Guest's picture

If you'd like a tool for setting your goals, you can use this web application:


You can use it to manage your goals, projects and tasks, set next actions and contexts, use checklists, schedules and a calendar.
A mobile version is available too.

Guest's picture

Good points! At first my goal was simply to be out of debt, but one day I had to go to work when I was sick. I don't get sick days or vacation days, sadly.. I was sitting there thinking: "If I didn't have bills to pay, I could have called in and got some rest." So now my motivation is: If I didn't have consumer debt, I wouldn't have to work. I still WOULD, to save and help support my family, but I wouldn't HAVE to, so the worsening economy wouldn't be as heavy for me personally and I could take a sick day and not worry about credit card bills! So my goal is : to get to the point where I can call in and not worry about the loss of that day's income:)

Great post, really appreciated it.

Guest's picture

My wife and I just finished an "emergency fund".

Next year we are focusing on paying for our house and saving for retirement investing.

But we are also going to take a little vacation and have some fun to celebrate being on our plan for almost two years.

Thanks for the post.

Guest's picture
Len Penzo

Great article, Nora. It seems to me that your friend needs to make a personal commitment to truly being financially responsible. Until that happens, she will never get off the debtor's merry-go-round.

One of the first steps in making that change is understanding a want from a need, which I discuss on my humble blog. Here is the link to that particular post: http://lenpenzo.com/blog/id213-the-dirty-lowdown-distinguishing-wants-fr...

Again, great post!

Len Penzo

Guest's picture

Finance Trail this is a very good article, you can get all the info you want but it all comes down to setting goals and working towards them

Guest's picture

to me, getting out of debt equals FREEDOM, so that's more than an incentive to me!

People that cannot get out of debt or can't stay motivated are usually prisoners of hyper consumerism. They really have to shift gears and remember that once they are out of debt, their discretionary income has no strings attached. Finally, they can truly enjoy life.

Maybe the problem is one of perspective? Of thinking outside the box, going against the herd? In this case, the herd being the consumer-driven society.

I'll be off the hook in the summer of 2015 or earlier. Can't wait for freedom! :D

- Maria Alexandra