It's official — the debt level in the United States is now the highest ever. Consumer debt reached $12.73 trillion dollars at the end of the first quarter of 2017, which is a tad higher than the $12.68 trillion debt owed before the 2008 recession and $149 billion more than Americans owed at the end of the fourth quarter of 2016.
Not all debt is bad, but the upward trend could be a sign that Americans are taking on more borrowing than they can afford, which could lead to the kind of loan defaults that sparked the Great Recession. What's different from a decade ago, however, is the type of loans we're getting. "Auto loan and credit card delinquency flows are now trending upwards, and those for student loans remain stubbornly high,” Donghoon Lee, a research officer at the New York Fed, said in a press release about the report.
“In the abstract, more debt signals optimism," Heather Boushey, the executive director and chief economist at the Washington Center for Equitable Growth, told the New York Times. "But in reality, families are using debt as a mechanism to pay for things their incomes don’t support."
If you owe your own share of the country's trillions in debt, you may be tired of feeling weighed down by obligations to lenders. If you're fed up with debt, try these tricks to supercharge your repayment.
1. Put psychology to work for you
The best way to pay off debt is to get really dedicated. “Being obsessive turns out to be a great way to pay off debt, because it means you focus," Jackie Beck told Daily Worth about paying off $147,000 in debt over nine years. You've got to train your brain to want to send that extra $100 to your creditor instead of spending it on dinner out.
The best way to stay motivated, according to psychological research: Pay off your smallest debts in full to maintain momentum. "Winning what are known as ‘small victories’ by paying off small debts first can give consumers a real boost in eventually paying off all their debts,” Texas A&M University researchers wrote in a study published in the Journal of Marketing Research.
Choosing an approach that gets you excited often means you'll pay everything off more quickly — including those bigger debts you work up. If you're not motivated, on the other hand, all your debts may keep growing, which is even worse.
2. Create accountability
The buddy system works: "Researchers found that women who biked alone experienced a decline in motivation over time, whereas those partnered with a virtual friend had no decrease in motivation," Live Science explains. When you involve a friend, you're accountable to someone else and don't want to let them down. This same approach can work when paying off debt.
If you keep others in the loop, you're much more likely to make real progress on debt repayment. "If we tap into our instinctive need to fit into a group by using an accountability buddy to reach our financial goals, then we’ll have a lot more motivation to reach those goals," Student Loan Hero suggested.
Find a friend who is also trying to pay off debt and set a monthly dinner date to discuss your progress, or consider starting a personal finance blog to share your debt repayment journey. "I wanted and needed to create a space where I could turn the negative energy and emotions related to my debt into something positive — into something that would keep me accountable in the debt payoff process," Melanie Lockert wrote in Dear Debt: A Story About Breaking Up With Debt.
When you share your progress with others, not only will you want to have positive progress to share, but your friend can also call you out if you make excuses.
3. Find a visual way to track your progress
Debt seems really abstract when it's just a lot of numbers on paper. Creating a real-world visual representation of your debt could make a big impact on your ability to repay it quickly.
"When you have a constant visual reminder, you are more likely to be committed to pay off the debts," Frank Kiong wrote in Its Now or Never: The Seven Key Strategies to Wealth Creation for Employees. "Remember, seeing is believing."
Having a tangible representation of your debt, and your payoff progress, is a great way to remain passionate about your debt repayment goals, as you'll see how far you've come and how far you have to go. This could be as simple as a chart on the fridge, or you could get more crafty with a debt repayment paper chain.
A reader of the blog Get Rich Slowly shared how she used visual reminders to help motivate herself to pay off $6,500 in credit card payments. "I made myself a literal paper chain of debt. I made each link worth $100 and each color group a thousand. Each time I dipped below an amount on a link, I could reward myself by cutting it off. I was so psyched each month when I could cut off more than one link!" Something similar might help motivate you.
Sign up for The Payoff — your weekly crash course on how to live your best financial life. Additionally, for all your burning money questions, check out Mic’s credit, savings, career, investing and health care hubs for more information — that pays off.