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The 5 Stages of Debt Repayment

It’s been over a year since I signed up for an $18,500 car loan. Since then I’ve rolled through so many emotions regarding this debt – because debt is an emotional thing. It shapes our lives, and it ties itself to our net worth and our self-worth. For me, it’s an incredibly public thing that opens me up to scrutiny.

Our attitudes towards our debts are not static, they’re ever-changing. At some point, you’ll attack your debt with unbridled enthusiasm, and at another point, you’ll feel resigned to be in debt forever. Our feelings towards our debts are usually tied to the remaining balance and our time to debt freedom. Now that I’ve finally paid off this particular debt, I’ve gone through every stage. I’ve gone through the phases before, and for me, they’re the same as they were three years ago when I was paying off my $40,000 student loan/car loan debt.

Stage 1: Acceptance

The final stage of grief is acceptance. When you have debt, it’s the first. You see, very few people buy a car, or a house, or take on thousands of dollars in credit card debt with the intent to immediately pay it off. Most of us muddle along for a year or two, content with making minimum payments before realizing how negatively this debt is affecting our finances.

This was the case when I was paying off my car loan this year. While I never made the minimum payments, I did muddle along making $1,000 payments for about the first six months. I was comfortable with the approximately two-year timeline to become debt free. I thought I would pay off my car in two years and that would be that. Of course, we know that’s not what happened because I quickly progressed to the next stage:

Stage 2: Fed Up

Everyone who eventually becomes debt free (and many who don’t) eventually reach the point where they are just fed the fuck up with their debts. They’re fed up with the minimum payments, the massive portion of their paycheque that’s going towards servicing the debt, and the boatloads of interest they’re paying every month.

I reached this point in June , about six months into the debt repayment process. I was dutifully paying off my debt every month, sending about $1,000 per month or so towards my car loan and paying around $50 per month in interest. I eventually got to a point where I was just fed up with this debt and its effect on my finances. I wasn’t able to adequately save for the things I wanted to do like renovate my house, yet despite a considerable chunk of my money going towards this debt, I was still miles away from paying it off.

When you reach this critical breaking point, the debt becomes too much, and it’s time to make a plan to pay it off.

Stage 3: Enthusiasm

Once you decide you are going to pay off your debt once and for all, it’s like a veil lifts. The sky is bluer and the sun is brighter. You’ve got a plan, and you are going to be debt free! This is the stage where you’re doing your calculations, making your projections, and arriving on a debt free date. This is the point in debt repayment where you send every last penny towards your debt, and you feel damn good doing it. Fantasies about what you’ll do with all of that money once you’re debt free will cloud your vision, and you’ll make plans for that magical life after debt.

As a veteran debt slayer, I dusted off my old spreadsheet back in June and made some projections. If I threw everything I had at my remaining $11,500 debt, I’d be debt free by the end of the year.

Stage 4: Utter Disgust

After I got my act together and started aggressively paying off my debt, I happily threw everything I had at my loan for several months. But around October, I started looking at my debt with disgust. I’d made so much progress (my loan sat at around $5,200 at this point), yet the finish line was still so far away.

It was at this point that I became disgusted with my debt. To me, my car loan was like that house guest that lingers far past when the other guests have left. Why are you still here?? was all I could think.

When you reach this point in your debt repayment journey, it will be tempting to give up. It will be appealing to think that you’ve made enough progress, you’ve made a big enough dent, that now is the time to stop. Don’t give in to those feelings. Stick to the plan; you’ll get there.

Stage 5: Desperation

The last few thousand dollars in a debt repayment journey are both the easiest and the hardest. You’re so close to being debt free that you can almost taste the beer you’re going to buy yourself in celebration. You’ll start hunting through your savings accounts looking for something – anything – extra to throw at your debt so you can become debt free a little bit sooner.

This happened to me in November. I still had $3,450 owing on my car loan, and I was so over it. I decided that it would be ok to raid my emergency fund and use those savings to pay off the car loan by the end of the year. I did it, and it felt great. At that point, I was so sick of paying off debt that throwing money into savings seemed so much better than paying off debt.

I paid off my car loan at the end of December , and I was finally able to feel the sweet relief that comes with debt freedom. It felt great. I finally felt free of that annoying monthly commitment that was eating into my income every month, and I was ready to start making plans for the new year.

If you’ve been trying to pay off your debt, but you keep getting stuck on one of these stages, know that you are not alone. So many Canadians start and stop their debt repayment journey without ever reaching the finish line.

If you need an extra boost to finish paying off your debt, try downloading my free debt repayment spreadsheet. Sometimes all you need is to see the numbers laid out, and that’s motivation enough to keep going.


  1. Jessica says:

    I feel like I’m going through these same stages with my saving goals! I’m at the fed up/throw everything at it phase, but it still takes forever. Great post!

    • Jordann says:

      Whatever you do, do not stop! You got this.

      In some ways, saving can feel harder than paying off debt, because at the end of it there’s just another savings goal.

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