Becoming Debt-Free: Defining Big Goals

Step Two: Define Your Goal

You’re probably thinking, “That’s easy! My goal is to be debt free. Why is this even a step?” Hold your horses there! This is probably the most important determinant of how successful you will be in becoming debt-free! We need to take a few minutes and properly outline what the goal is. Well-defined problems have well-defined solutions and “I want to be debt-free” is not well-defined enough. Why? Here’s an example:

Overcoming Debt is Like Losing Weight

Every January 1, millions of people flock to their local gyms with the goal of “I will lose 20 pounds!” Then, inevitably, every January 8, most of these people have stopped going and have decided that next year will be different. What happened? They didn’t have a well-defined goal.

Why isn’t this a well defined goal? Either they lose the weight or they don’t, right? Not exactly. A well-defined goal has a clear meaning. Consider two possible interpretations of their goal:

  1. “I will lose 20 pounds by next week”
  2. “I will lose 20 pounds within the next two years and keep it off”

Interpretation (1) is possible, but the person will be miserable and will probably regain the weight by the following week since they’ve made a short-term goal with no plan for upkeep.

On the other hand, interpretation (2) does not have a short-term deadline. This is a long-term goal which allows for flexibility and gradual, small, virtually painless steps which will inevitably achieve the goal and ensure ongoing success.

Let’s apply this example to our debt-free journey.

Properly Defining the Goal

Now that we know “I want to be debt-free” is not well-defined, let’s figure out how to better define it. Everyone wants to be debt-free as soon as possible, but we need to find the happy medium between immediacy and sustainability. The faster we do it, the harder it will be to form good habits that keep debt away. Do it too gradually and we’ll get there, but it will be dragged out for too long. We want to find a plan that provides security, feasibility, and positive habit formation.

If you make the goal big enough, it’s hard to miss.


Based on what you know about your income and spending, pick a time horizon that you think is feasible. We’ll revisit this again after assessing our financial status in Step Three.

This is part of an ongoing series on becoming debt-free.


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