Mathematical Magic Behind Motivating Yourself to Debt Freedom

How I Stayed Motivated While Paying Down Debt

It’s no secret that paying off debt is hard work. The sacrifices you have to make are ever present, while the rewards are months or years away. Staying motivated during the debt payoff journey can be challenging no matter how much debt you have to pay off. However, it is particularly difficult when your debts will take years and years to pay off.

If you are in a multiple year repayment situation, you’re likely looking for ways to get or stay motivated. I know this was true for us as it took us about 8 years to completely clear all our debts.

Finding a way to keep up your motivation can be tricky over such a long stretch of time. At the beginning it is easy. You’re hopeful and optimistic: riding the wave of excitement at the possibility of being debt-free. After developing your plan you are only slightly deterred by the debt–free date. Sure it’s years in the future, but at least there is a light at the end of the tunnel.

However, your enthusiasm wanes with each passing month. The daily sacrifices you are making become more inconvenient. The initial high you felt when you developed your plan is replaced by discouragement at the thought of how long you have to continue to sacrifice.

I’ve been there and done that. I admit that I didn’t keep up a frantic pace of intensity during the whole debt repayment process. However, I did find one trick particularly helpful in keeping my motivation up. I’ll outline the details in a moment, but first I want to take a minute review how motivation works.

Understanding Motivation

On a very basic level motivation will come from one of two sources: either from seeking pleasure or from avoiding pain. If you’re going to generate enough energy to take action, it will likely be a result of one of these forces.

You may have already set up rewards for yourself to incentivize you to keep paying off the debts. Having a nice meal out when you pay off your next credit card. Or buying that new phone when the car gets paid off. These are examples of a pleasure based motivational tool.

You are giving yourself a pleasurable experience to help keep you motivated during the unpleasant task of debt repayment. This trick is great, but after you knock off the low hanging fruit on your debt snowball, it can be a while before hitting your next milestone and collecting the accompanying reward.

The Importance of Immersion

Finding something more immediate would be ideal. This leads us to my core tenant in my philosophy of change: immersion. Immersing ourselves in success stories was a key factor in keeping our motivation up during the grueling years of debt repayment. Finding inspiration through listening to podcasts, reading blog posts, or watching YouTube videos is another pleasure based motivational tool you have at your disposal.

Immersing yourself in encouraging content not only gives you the warm fuzzies, it also amplifies your own motivation levels. Knowing that someone else has found success gives you hope that you too can have that same success. If you are familiar with Dave Ramsey (and I’m guessing if you are in the process of paying off debt, you are), then you know that this is one of the major motivational techniques his radio show utilizes. And it works!

How About Avoiding Pain

Thus far these tools are only addressing one-half of our motivational potential: the pleasure inducing motivators. However, there is another side to generating motivation: avoiding pain. Is there a way to incorporate this motivation tool into your arsenal as you battle your debt?

This one’s a bit trickier, as you have to embrace pain and sacrifice in order to get out of debt. Giving up many of the luxuries that ended up getting you into debt in the first place isn’t easy. Adding additional mental anguish on top of that will be a hard sell for most people. However, for me, it was from this side of the motivational coin that I found the most motivation.

Enough already, just tell us!

Okay, consider the preamble over. The trick I used was to calculate exactly how much interest payments were costing me. I found breaking this down to a daily cost the most motivating. Looking at how much money I was handing over to the bank each and every day was sickening. Changing that as quickly as possible became my mission.

I’ll break it down for you to show you exactly how I accomplished this. As an example, I’ll use some general numbers with our student loans. This was the debt that stuck around the longest and was the greatest source of pain in our lives.

Loan Amount = $90,000

Interest Rate = 6.25%*

Term = 30 Years**

Monthly Payment = $554.15

The Math

We were giving the bank $15.41 each and every day! *** This probably wasn’t too far off my hourly income at the time. So I was essentially working for free for an hour each day. It’s actually worse because I still had to pay the bank the $15.41 on weekends.

Once you take taxes out of my paycheck, I was probably working over 2 hours each day for the privilege of paying the bank this interest payment. That’s 25% of my working day just on the interest payment of one loan! I’m still getting fired up about it and I haven’t made a payment for over 2 years now.

Every time we made a payment, the daily interest rate would go down. However, if we simply made the minimum monthly payment, the amount it would go down would be negligible ($0.02 per day). However, once we started making bigger payments, this number would go down significantly.

With every large payment I made, I was sure to calculate how much that payment would save me each day. How much money I’d be able to keep instead of sending to the bank. This tactic not only made it easier to send off those large payments but also kept me motivated for the next payment.

You can calculate exactly how much you are saving yourself by taking the amount your payment reduced the principal and multiplying it by the interest rate, then dividing by 365 days. For example, if I made a payment that reduced my principal balance by exactly $10,000. Then I’d take $10,000 x 6.25% (0.0625) = $625. Then I’d take $625 / 365 = $1.71. So I’d now prevent the bank from taking $1.71 per day off of me.

Here’s the formula in more mathematical looking terms:

Final Thoughts

Paying off debt can be a long journey and finding as many tools as you can to keep motivated will be helpful. So I hope you find this trick as motivating as I did.

As always I’d love to hear from you! Does calculating how much you’re paying in interest motivate you or just depress you? What tricks do you use to stay motivated while paying off debt?

*This was a terrible rate. I wish SoFi had been around when we were paying off our student loans!

**I know…it is crazy, essentially having a second house payment without any of the benefits.

***I did not calculate the tax deduction you get for interest into this equation, but that would have decreased the actual cost to us each day.


  1. Kudos on becoming debt free!

    Paying off my low interest debt is psychologically trickier. That’s why I haven’t done it 🙂

    My wife and I were lucky to consolidate our medical school loans for a cool fixed 1.875% interest. Not free money, but not exactly too far off. I don’t like having debt, but it doesn’t keep me up at night at that rate, not matter how big the principal number might be.

    Rather than pay down student loan debt, we have paid off our mortgage and thrown money at retirement. Student loan payoff and 529/college savings will be the last ticks we check off before pulling the early retirement figure.

    1. That is a crazy low-interest rate on those loans! Graduating before the housing crash was clearly a mistake on our part. Is that the norm for student loan consolidation rates now or did you guys just finagle a really great deal?

      Sounds like you have a well thought through and mathematically vetted plan given your unique situation.

      1. We got very lucky with our loans, and we able to consolidate with our original lenders upon graduation. From my understanding, this is no longer the case, and federal stafford loans have a variable (higher) interest rate. One of the newer 3rd party consolidators like SoFi may provide more competitive fixed rates, but I’ve never looked into it given my current rates.

  2. I was lucky enough to not have any debt, but similar calculations were what made me realize how much money I was throwing away on monthly subscriptions. It is crazy to think that I had to work so many hours to pay for something that I didn’t need anyway. Glad you were able to get rid of the debt monster!

    1. Thanks, Mrs. Wow! Those subscriptions can be tricky. It seems to be a business that relies on our laziness. Spending 20 minutes on the phone canceling or negotiating your services can save a ton of money, but most people don’t take the time.

  3. Congrats on being debt free! I use a tactic that’s kind of similar to your debt-paying motivation: I track all balances of my various savings accounts in a giant spreadsheet so when I’m tempted to spend, I take a peek at how my money’s growing. I’m a huge nerd so I have graphs- looking at the upward trends is usually enough to stop me from whatever impulse buy I’m considering. I guess it’s kind of like a modern version of watching your money grow, haha

    1. That’s a great trick. I might need to up my spreadsheet game and incorporate some graphs into the mix. It sounds like a great way to keep the motivation up and prevent frivolous purchases.

  4. Even though I don’t have any debt, I find this trick super useful in day to day life as well! Sure, the pizza in the food court smells amazing, but do I really want to work an full hour so I can pay for a slice of hit-or-miss that makes my body feel terrible, and comes with a sugary drink I’m not gonna be able to finish? I’d rather work 20 minutes for my healthier meal from home, and save the other 40 minutes of work 🙂

    1. Converting purchases to hours worked is a great trick as well. It often puts things in perspective and that usually all we need to stop ourselves from mindlessly spending.

  5. This would be especially good trick for anyone with credit card debt (which fortunately isn’t me anymore.) I did a similar exercise with my current car loan and it certainly motivated me to get it refinanced ASAP. I’m planning on keeping the payments the same, despite the reduced monthly payment a refinance would likely produce. My demon is tax debt…which isn’t huge in interest BUT wage garnishment or seizing of accounts is a REALLY GOOD motivators. Great post!!!

  6. That’s an awesome way to look at it – I can definitely see how that would help motivate you to pay it all off. When we were paying down our mortgage, we had gotten to the point where we would have been paying roughly $6 a day in interest, but even that makes me feel annoyed. Thanks for sharing your trick!

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