This is the last of nine basic steps for setting a New Year Resolution to pay off debt.

In our series of posts on setting a New Year Resolution to reduce debt, we’ve covered basic steps you can take to get out of debt.  We’ve discussed how you can set goals, come up with a plan, and enlist the support of others in paying off debt.  But the most important step of all is to track your progress over time.

Only by staying on top of your situation over time can you hope to achieve your goal.  We have seen that without monitoring, the tendency is to overestimate progress or, even worse, move backward in your goal.

What’s the best way to monitor?  Simply utilize the debt reduction tracking system we discussed in an earlier post to track your progress.

1. Set up a spreadsheet or paper tracking system with a column for the following fields:  balance, APR, payment date, minimum payment, amount paid, and expiration date of any intro APRs.  Make sure you sum each column at the bottom to get total amount.  Create a separate sheet for each month going forward.  As a simple matter, you’ll have to pick whether to bucket accounts by month or payment due date.  I recommend that you track the accounts by the month in which the payment due date falls, as that’s more closely correlated to cash flow.
2. Create a summary sheet with space for your total debt and total credit card spending at the end of each month.  If you’re visual, create a graph.  If you don’t use excel, just use a ruler and create a manual one.

Track your total debt each month to monitor how you’re doing.  If you set up a SMART goal to for debt reduction , track your progress against that as well.

As you track your progress, you’ll find that things start to fall into place.  You’ll have the visibility to your financial habits and the feedback to adjust your behaviors to have greater success.

In closing, remember that 65% of people who profess to have a goal to reduce debt never put a plan into place.  Just by creating a plan to deal with your debt and starting to track your success, you’ll be significantly more likely to achieve lasting results on your goal.

Hope you’re having a great new year.

Scott Crawford is CEO of DebtGoal.com, a do-it-yourself system for getting out of debt and lowering your interest costs.  DebtGoal.com incorporates all of the techniques discussed in this post and can help users understand and get visibility to and manage their debt finances.

This is the seventh of nine basic steps for setting effective New Year’s goals to get out of debt.  You can share your debt resolution with others here.

In this series of posts, we’ve been covering the basic steps that you can take to get out of debt.  Most of these have been discrete actions taken because they have direct bearing on your finances.  Step 7 is different.

Regular readers of our blog know that we like to talk about the psychology of debt, and how that’s often used against us by lenders.

Here’s a psychological trick that you can use to your benefit:  tell friends about your goal.  Why?  Studies show that if you tell other people about your goal, you’re more likely to stick to it and have success.  Consider it positive peer pressure.

• A 1973 study by Pallak, Cook, and Sullivan asked people to minimize energy use.  Those who made a public commitment to do so and have their names published in the newspaper reduced their energy consumption by 10-20%.  Those who made a private commitment or no commitment did not reduce their consumption at all.
• A 2007 study by Richard Wiseman of over 3,000 people attempting to achieve new year’s resolutions found that for men, goal setting improved success by 22% and for women, 10% were more likely to be successful when they had the encouragement of others.

We love the second study.  When you tell other people, your chance of success goes up by 10%.  That’s a pretty good impact.

So this year, tell your friends about your goal and ask them to check in with you periodically to see how you’re doing with your goal.

Tune in for tomorrow’s post when we’ll discuss how your family and friends can help you be more successful.

See you then.

Hope you’re having a great new year.

Scott Crawford is CEO of DebtGoal.com, a do-it-yourself system for getting out of debt and lowering your interest costs.  DebtGoal.com incorporates all of the techniques discussed in this post and can help users understand and get visibility to and manage their debt finances.