If you have decided to pay off your debt this year, remember that the mechanics are necessary but not sufficient for success. To pay off your debt you also need to:

  • Be single-mindedly committed;

  • Crave debt freedom with the hunger of a thirsty man in a desert;

  • Take pride in paying off your debt; and

  • Have a great plan.

Do you want to pay off your debt this year?

No, this is not a trick question. I may not believe in ‘start of the year resolutions’ but there is still somewhere in my desk draw a work out piece of paper with three items list on it. This list was done by me, dated December 28, 2009 and one of the items read:

‘In 2010 I’ll turn around our financial situation.’

I did turn our financial situation around. By the end of January, 2013 we had paid off all our consumer debt. By January 2018 we have built new investments at three times the value of our debt.

All this, following a flimsy new year’s resolution. And you know what? I don’t even remember that other two items on the list or whether these came good for me.

This is when we need to talk about coincidence, correlation and causation.

Coincidence is when the resolution and the following event are entirely not related. Say, I made a resolution to pay off all my consumer debt, did nothing and out of the blue heard that my extremely wealthy cousin died and left me a lot of money. In this case, paying off my debt is a matter of blind luck and mighty cock up (on my cousin’s side).

Correlation is when two events happen in parallel and when the probability of one even happening is higher when the other even happens. For instance, it may be that it is 50% more likely for me to pay off my debt if I made a resolution than without one. This doesn’t mean that I paid off my debt because I made a resolution.

Causality is when happens because of another event. And let me tell you now, that making a resolution and paying off your debt are not in this kind of relationship.

With debt, causality is somewhat different. You pay off your debt because:

  • You are single-mindedly committed;
  • You crave debt freedom with the hunger of a thirsty man in a desert;
  • You take pride in paying off your debt; and
  • You plan and strategise.

Which brings me to the four obstacles you’d have to slay on your way to pay off your debt.

You meander instead of committing

Do you remember a movie called The Karate Kid? The old one where Mr Miyagi said

“Either you karate do “yes” or karate do “no.” You karate do “guess so,” (get squished) just like grape.”

This works well when you pay off your debt.

I used to read, and still do, debt focused forums and many people there keep meandering instead of firmly committing to paying off their debt.

You know that you are meandering when you hear yourself say things like:

  • I’ll look at my bank statement/credit card statement tomorrow (and you don’t).
  • I really shouldn’t be buying this but hey…I really deserve it.
  • I’m trying to pay off my debt.

Anyway, you get it, I hope.

Paying off debt requires firm commitment and unwavering focus.

When people ask me how did I pay off £100,000 in three years, I tell them that it is simple: one morning I woke up and I knew that I have had enough and that I won’t stop until the debt is gone. There was no ‘try’, no ‘tomorrow’, no hesitation – I was doing it for real.

Oh, and I didn’t care what people thought about my complete focus – other people’s judgement, including some very close to me, was their business; my business was to pay off my debt.

Honestly, I can’t tell you how I go there. Still two things may help:

  • Visualise regularly your life without the debt. Pay attention to the detail: what would you do, how would you feel, taste and smell debt freedom. Sounds a bit ‘new age’ but it works (and I’d say that, apart from my MSc, PhD and driving license I also have a diploma in Neuro Linguistic Programming).
  • Make habits out of the actions you need to take to pay off your debt. Leo Babauta has a site called Zen Habits devoted to this process; if you want to take a shortcut here are the habits to create habits.

You wish instead of building ‘debt freedom lust’

Yes, all too often we are very wishy-washy when it comes to paying off our debt.

Here is the thing:

Paying off your debt needs some strong feeling behind it!

It is not enough to think:

  • I wish I could pay this debt off. (Did you notice how conditional this is? Give me a break, man, you can do better than that.)
  • Yeah…I may pay off my debt (Or you may decide to buy yourself a drone or something.)
  • Wouldn’t it be nice to have no debt?

No! You need to develop ‘debt freedom lust’.

This feeling is almost a craving.

And cravings are specific. So, grab a pen and paper and white down what is the one thing you will do once all your debt is paid off that you simply can’t wait to get. Do it now!

(For me, it was freedom, choice and opportunity.)

How determined are you to chase your dream and how much are you prepared to sacrifice today?

If you answer ‘very’ and ‘a lot’ to these questions you are developing the ‘debt freedom lust’.

You are so ashamed of your debt that you hide it even from yourself

Debt in our societies is still seen as something shameful. I remember the feeling of embarrassment and guilt when we could no longer deny the large amount of debt we had.

Becoming a debt forum member helped but not much. There was always someone, looking in from the side lines and preaching profound moral failure to all us debt sinners.

Until one day I’d had enough of the moral supremacy of debt hypocrites. Yes, getting in debt may be a sign of money irresponsibility, it may even be a personal finance sin. But even the Catholic church allows absolution (not to mention that at one point it was becoming rich by selling indulgences).

Shame is not a productive emotion; shame is something we hide and hide from. If you are serious about paying off your debt, you ought to move beyond shame and start dealing with the problem with pride.

After all, it matters little what mess you get yourself in; what matters is what you do next.

You dream instead of planning

Dreaming is important; remember this visualisation thing I was telling you about? It is another word for ‘daydreaming’. Our dreams shape our future when backed by planning, strategy and action.

Keep dreaming; but don’t stop there. Make your dreams, your goals and your goals your life.

There are many practical steps you need to make if you want to pay of your debt. These include:

  • Knowing your debt (how much, creditors, interest etc.)
  • Knowing your money situation (cash flow, sources of income, main spending etc.)
  • Reducing your spending.
  • Increasing your income.
  • Improving your money management.

Stop dreaming and start planning.


When you ask a master in personal finance how to pay off your debt, you are likely to hear that you must:

  • Earn more than you spend;
  • Be careful with your money;
  • Practice delayed gratification;
  • Stop trying to keep up with the Joneses.

All these may be important (I’ve never been convinced about the Joneses but…).

This advice, on its own, will never get you out of debt. Apart from being as worn out it is a necessary but not sufficient condition to pay off your debt. To do that you need commitment, debt freedom lust, pride and a detailed plan.

What are the things you think keep you from paying off your debt?