You've been diligently working to pay off that pesky credit card and get your finances in order. You've cut back on spending, quit eating out, and you drive for Uber and Lyft twice a month. Yet after all that hard work, you still didn't pay the card off within six months like you planned.
Missing a milestone can be disheartening and demotivating. But just because you didn't meet your debt payoff goal in the allotted time, doesn't mean it's time to quit. Consider this quote from Michael Jordan, arguably one of the greatest basketball players of all time:
"I've missed more than 9,000 shots in my career. I've lost almost 300 games. Twenty-six times, I've been trusted to take the game winning shot and missed. I've failed over and over and over again in my life. And this is why I succeed."
Failure and falling short are risks in any meaningful endeavor. Here are several things you can do to bounce back after missing your credit card payoff goal.
1. Forgive and forget
The first thing you must do is forgive yourself. Whatever role you played that made you miss your goal has to be acknowledged and forgiven.
You may have strayed from your budget a few times. You may have miscalculated how much you needed to pay. You could have missed entire payments. Whatever it is, you did it. Own it and make amends with yourself.
After you've taken responsibility for your role in the failure, move on. No need to cry over spilled milk. What's done is done. The quicker you can wipe it from your memory, the quicker you can regroup and move forward.
2. Consider the factors
The next thing you should do is to go back and look at all the things that impeded your progress. Were there unexpected emergencies or expenses that hindered you from paying the credit card off as planned? Did you miscalculate? Did you incur any fees? Did the repayment terms or interest rate change?
Also during this process, it is important to conduct a self-audit. You are the most important factor to paying off your credit card debt. Did you miss any payments? Did you spend money that wasn't planned? Were you disciplined? Was your goal reasonable for your situation?
Answering these questions will allow you to see what you did right and what you need to change moving forward. It allows you to assess your plan, your income, level of discipline, and other factors you may have been unaware of initially. Once you have these answers, you can tweak your process, set a new goal, and pay off that credit card.
3. Look on the bright side
There is a silver-lining to every dark cloud — you just have to find it. As it relates to your credit card debt, it's pretty easy to see. Just look at your credit card balance. Even though you didn't pay it off in full, you drastically reduced the balance and expedited the repayment time.
You've also saved yourself hundreds of dollars in interest and potential fees. You have made progress and moved yourself closer to financial freedom. You've also made progress toward improving your credit score. Your score may not reflect it at the moment, but as soon as you pay off the card, it will go up.
One of the greatest benefits of the process you've just endured is that you've improved as a person. You've developed more discipline, tenacity, and grit. You set a goal and worked to achieve it. You saw something you didn't like and you put a plan in place to intentionally change it. That should be celebrated.
4. Set SMART goals (re-evaluate your plan)
You didn't reach your repayment goal, but you are a lot further along than you were before you started. It's not time to quit. It's time to re-evaluate your plan and establish smaller SMART goals to get you there. Your goals should be:
5. Celebrate small wins
The brain is hard-wired to win. Research shows that whenever you win at something, dopamine receptors in your brain are increased. This in turn enhances intelligence, confidence, and feelings of happiness. It's called the "winner effect."
According to Ian Robertson, cognitive neuroscientist and author of The Winner Effect: The Neuroscience of Success and Failure, success and failure have more of an effect on humans than genetics and drugs.
Creating opportunities for small wins increases your odds of reaching long-term goals and staying motivated along the way. Pausing to celebrate a small victory — for instance, paying down your credit card by $200 — is a reminder that you are making progress.
6. Keep it moving
No matter how many times you get off track, pick yourself up, complete the first five steps, and begin again. Every payment gets you closer to your goal. Staying focused and committed is tough and you will slip up from time to time, but the key is to keep moving.
Each time you restart, you build a little bit more tenacity. Every time you fall and get back up, you win. Progress is about putting one foot in front of the other, over and over, month by month.
Even if you miss a payment or three, once you have the ability and opportunity to regroup and move forward, do it. Debt repayment is a slow and steady process. The process in and of itself — when done slowly and consistently — discourages you from incurring new debt. You not only pay off your current debt, but you reduce the likelihood of developing new debt.
7. Get a support system
Having people that support your goal, encourage you throughout the process, and hold you accountable is a sure way to keep you dedicated and focused. So, start reporting your progress to someone.
Accountability requires courage. When we hold ourselves accountable for something and don't follow through, our brain processes it as a loss. The brain hates to lose. It takes courage to make a commitment because there is always, looming in the distance, the opportunity to fail.
Write out your goal and your plan to reach it and give it to a friend. Have them check in with you every couple of months to see if you are hitting your smaller goals and sticking to your repayment plan. Celebrate with them if you are, or regroup and make the necessary adjustments if you are not.
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