How the Rubber Band Method Can Help You Get Out of Debt (2024)

I’m about to tell you something REALLY simple that can totally change your life.

It’s so simple that if I just tell you right out, you’ll probably roll your eyes and move on. But you shouldn’t.

So let me tell you a quick story first to set the stage…

I used to be a financial mess.

For years, I struggled to make ends meet. To pay off debt. To even just get my finances in some semblance of order.

Then I got divorced, and soon I was facing a job loss too. Things got worse. Basically, I was a mess.

I realized I’d better get my financial act together for my own sake and my son.

You know what happened? I started to actually focus on my money. I made it a priority instead of a wish.

When you make something a priority and work on it every day, you make progress.

Sometimes you make more progress than you might originally have imagined.

Yeah, I know. Focusing is easier said than done.

It’s easy to get sidetracked with the little details of life. Maybe you’ve got this big project you’re working on right now. You’re really busy. Or you or a family member get sick. Something very stressful happens. Or maybe you’re just tired and want to relax when you get done with work.

So while you WANT to get out of debt, you put things off till tomorrow.

Things like “Make a budget” or “Track my spending” or “Make an extra $50 to send to debt this week” kinda fall by the wayside.

What if you could be certain you were moving toward debt freedom everyday?

Wouldn’t it feel good to know that you’d done something positive? That you were getting closer to your goal?

And to do all that without it having to be this big huge deal that takes a ton of time and effort?

Enter the rubber band method.

It’s SUPER simple. (It was actually used differently as a parenting method, but it’s great for debt for several reasons.)

Here’s what you do. You put a rubber band on one of your wrists each morning when you brush your teeth. Pick a wrist and always start with the same one.

Then move that rubber band to your other wrist at any point before the end of the day by meeting one single condition.

How do you move the rubber band?

By doing something, ANYTHING, that will move you toward your goal of debt freedom. Even the littlest bit. You decide what that something is.

The key is to move that band each day so that you form a habit and make continual progress. (Even if you did multiple money-related things the previous day.)

It’s like a daily rubber band reminder of your biggest goal, and when you move it you’re essentially rewarding yourself for taking your daily step in the right direction.

Positive feedback and continual progress are a great combination. Soon you’ll be on your way to a habit of debt freedom.

Here are some sample actions you can use to move a rubber band:

Track your spending for the day, or even a single purchase.
Consider whether you want to continue spending that amount on that item, or whether you’d rather spend more or less.
Pay one or more of your monthly bills.
Automate a bill.
Enter the information for at least one debt into your debt snowball.
Send any extra amount toward your target debt.
Pick an expense you might want to reduce.
Make a call to cancel or reduce that expense.
Talk with a loved one or friend about something you’ll be able to do when you’re debt free
Celebrate the progress you’ve made so far (even if it’s just shouting “Woohoo!” and giving a fist pump like I used to do.)
List something for sale. (You can put the money you get toward debt, and you’ll have less clutter too.)
Add any amount to your emergency fund.
Decide not to buy something you don’t need.
Ask for a discount on something that you’re buying (even if it’s as small as a coffee) just to see if you get one this time.
Download this free budget form.
Fill out one or more items on the budget form.
Arrange a babysitter so you can talk to your spouse about why being debt free matters to you, and to find out how they feel.
Look at how far you’ve come already.
Bring your lunch instead of buying it (that’s a money success!)
Sign up for the (FREE) Debt Mindset Reset 7-day email course.
DO a Debt Mindset Reset action item for the day.
Look in the mirror and tell yourself “I only spend money I already have”. (This is a great one because you will ALWAYS have time to do it.)
Post a picture on your fridge or computer that symbolizes why you are working to get out of debt.
Look at that picture and think about how much it means to you.
Do anything at all that you feel is a step in the right direction.

You get the idea. The point is to pick something, do it, and move that rubber band each day!

So are you in? Comment below or share this post if so! (And move the band, because that counts as a step in the right direction too!)