25 debt payoff goals, from your first extra payment to debt free

First debt payoff goals

First goals are about seeing the whole number and not making it bigger.

• List every debt with its balance, its rate and its minimum payment.
• Add up the total and put it where you will see it.
• Pay every minimum on time for 6 months.
• Add nothing to your card balance for 30 days.
• Save a first 500 for emergencies.

Payoff amount goals

Amount goals are totals paid off, and they only ever go one way.

• Pay off your smallest debt completely.
• Pay 100 extra every month for a year.
• Pay off 1,000 in 3 months.
• Pay off one credit card in full.
• Pay off 10,000 in a year. That is about 834 a month.

Debt snowball and avalanche goals

Method goals decide which debt gets the extra money, so you never have to decide again.

• Follow the snowball: put every extra payment on the smallest balance until it is gone.
• Follow the avalanche: put every extra payment on the highest interest rate first.
• Roll each finished payment into the next debt for a year.
• Put every bonus and refund toward debt this year.
• Make one extra payment every quarter.

Spending and income goals

Spending goals free up the money, and income goals add to it. Cooking at home is the classic one, and cooking goals turn it into a count. Earning more is a job for sales goals.

• Do a 30 day no spend month.
• Cancel one subscription a month for 3 months.
• Cook dinner at home 5 nights a week for 3 months.
• Earn 300 extra a month for 6 months.
• Sell 20 things you no longer use.

Debt payoff milestones

Milestones break one long goal into a few points worth marking.

• Reach 25 percent paid off.
• Reach 50 percent paid off.
• Be free of credit card debt by a date you choose.
• Be completely debt free by a date you choose.
• Move your old payment into savings for 12 months after the last one.

What is a good debt payoff goal?

A good debt payoff goal has a number and a date. A review of 35 years of goal research found that specific, hard goals lead to higher performance than being told to do your best. "Get out of debt" is a hope. "Pay off 10,000 by 31 December" tells you the monthly amount: about 834.

Small wins seem to matter here. A study of people in a debt settlement programme found that closing off individual accounts predicted who got rid of their debt, whatever the size of the accounts they closed. That is the idea behind the snowball method: clear the smallest debt first, then the next.

The avalanche method goes the other way and pays the highest interest rate first, which costs less in interest. Either one works as a goal, because either one gives you a next step. Breaking a goal into smaller ones is what both methods do. This is general information, not financial advice, so talk to a credit counsellor if you are struggling.

How to track debt payoff goals

Log every payment the day you make it. A review of 138 studies found that people who monitored their progress reached their goals more often, and that recording it beat keeping it in your head.

The amount paid off is a total that adds up toward the full balance. Days without spending are a day count, which is how a no spend challenge is tracked.

A balance going down is hard to feel. A picture that fills up with every payment shows the same thing going up, which is easier to look at every month.

Frequently asked questions

What are examples of debt payoff goals?

Pay off your smallest debt completely. Pay 100 extra every month for a year. Pay off 10,000 by 31 December. Be free of credit card debt by a date you choose. Each one has a number or a date.

What is the difference between the debt snowball and the debt avalanche?

The snowball pays the smallest balance first, so you finish one debt quickly. The avalanche pays the highest interest rate first, so you pay less interest overall. One study found that closing accounts predicted getting out of debt, which is the case for the snowball.

How do I set a debt payoff goal?

Add up what you owe, choose a date, and divide. 10,000 over 12 months is about 834 a month. If that is more than you can pay, move the date, not the method.