What’s the first thing I do when I want to go somewhere? Type the address into Google Maps, of course!
I tell it my starting point and it shows me a few different routes to my destination and my projected travel time. When I’m ready to start my journey, I pick the route I want and I follow along as I’m traveling to make sure I get to my destination.
But if you don’t know the address you’re going to, or where you are starting from, Google Maps is pretty useless. You could decide to just wander around and hope you find the place, but who knows how long THAT would take, or if you will even get there?
Finances are the same way. If you don’t know the destination and where you are starting from, how can you plan the right route? And if you don’t know the route, how do you know if you are on track or just lost and going in circles?
Is it a destination, or just a dream?
We all have dreams, but a dream is not the same thing as a destination. You might dream about paying off debt, retiring early, buying a home, going back to school, starting a new business, or starting a family. But without details, they are only dreams.
If you want to turn a dream into a financial destination, you need to know:
- Where are you right now i.e. what is your starting point?
- What, specifically, is your end goal?
- If there are different options for getting there, which method will you choose?
- What are the steps to get from here to there?
- What is your timeline for doing it?
- What benchmarks can you set along the way so that you know you are on the right path?
An example: paying off credit card debt
Paying off credit card debt is a financial destination for many people. According to a 2025 study, of the people who have credit cards, 45% carry a balance for at least one month, and among cardholders with unpaid balances, the average total owed was $7,886. That would equal about $2,200 in interest every year (assuming a typical credit card interest rate of 28%). That means that if you carry that debt for 3 years, you will have basically paid twice for everything you bought with that card. That is a very good reason to want to pay it off!
But if paying off credit card debt is one of your dreams, how do you make that dream into a real financial destination?
Step 1: Where are you right now?
You can’t plan your route if you don’t know where you are starting from, so the first step is to make a list of all your credit cards, their balances, minimum payments, and interest rates. Then add it up. What is your total debt? How much are you paying in interest each month? What are your total minimum payments?
This is your starting point.
Step 2: What specifically is your end goal?
For credit card debt, your end goal is the total amount you want to pay off. But if you are actively using the cards it can get very confusing because that number keeps changing. That is why I recommend that people do one of two things:
- Option 1: Stop using all credit cards while you are in this debt payoff period. It keeps new purchases from making it confusing as to how much you are actually trying to pay off. It is also a great way to prove to yourself that you don’t NEED them to pay the bills. And if you are worried about losing points, know that if you are carrying a balance they are charging you interest from the day you make the purchase. No points can outweigh that!
- Option 2: Only use one or two cards that currently have no outstanding balance, and no matter what, pay the full balance on these cards every month. That is another way to keep new purchases separate from the old balances you are trying to pay off, while still being able to use a credit card.
When you are not mixing up new purchases with old balances it makes your end goal clearer, and that makes the whole journey much easier.
Step 3: What method will you use to get to your goal?
Most things have more than one way you can go about them, and credit card debt is no different.
You can plug all your current balances and interest rates into an online calculator along with how much you can put towards debt repayment, and it will give you a debt payoff plan and tell you the exact date that you will be debt free. I like this online calculator because it lets you compare two common debt payoff methods: the “snowball method” and the “avalanche method.”
Before you create your debt payoff plan you can try to lower some of your interest rates. One way is to just call your credit card companies and ask for a lower rate (there are a couple of different strategies for this). You can do a balance transfer to a lower-rate card, or you can get a loan (like a home equity loan or personal loan) at a lower interest rate and use that to pay off your cards.
If your debt is very large, you might consider closing the cards and trying to settle, using a non-profit debt management company to help you restructure things, or even filing for bankruptcy.
Some research, or a meeting with a financial coach like me, can help you figure out what the best method is for you.
Step 4: What steps will it take to get from here to there?
You know the goal, you know the method, now you need to know what the steps are for getting there.
Maybe you have decided to ask for overtime at work so you can put more money towards debt payoff. Getting the overtime, or coming up with a plan B if you can’t get any, will be one of your steps. Maybe you plan to apply for a home equity loan. Contacting different lenders and getting quotes will be a step. Or maybe you want to cook more meals at home so you can put some of your grocery money towards debt. In that case one of your steps might be setting aside time each week for meal planning/prepping.
Step 5: What is your timeline?
If you are using an online calculator, it will tell you exactly what year and month your debt will be paid off. But that timeframe can be shorter or longer depending on how much you are able to put towards debt payoff each month.
Also please note that it may seem like a good idea to make that debt payment as big as possible, but remember, you have to be able to DO this plan. If it includes a monthly payment that you really can’t afford, that will not work!
Give yourself a realistic amount of time, but don’t let it drag on too long. You want to get to this destination so that you can a) enjoy being there and b) start planning your next exciting financial destination!
Step 6: What benchmarks can you follow?
Paying off debt can sometimes take years, so you want to have some check-in points so that you know you are on the right track. And to give yourself opportunities to celebrate how far you have come on the journey to your financial destination.
For instance, maybe your goal is to have your lowest balance card fully paid off in 3 months. Put it on your calendar, and if in 3 months you have paid it off, celebrate! If not, try to find out what kept you from reaching that goal. Was the goal too ambitious? Was it some temporary bad luck? Or did you let other priorities get you off track?
- For ways to celebrate check out my article “22 Ways To Celebrate Milestones for Free or Cheap.”
- For ways to keep going when the going gets tough check out my article “A Pep Talk For Hard Times.”
Going back to the Google Maps analogy, noticing when you pass landmarks along the way can give you confidence that you are on the right track. But if you miss a landmark and realize you have taken a wrong turn, you may have to do some “recalculating!”
Financial coaching can help turn dreams into financial destinations.
I work with clients all the time to help turn their financial dreams into concrete, achievable, financial destinations. I work with singles and couples, I offer affordable rates, and a free 30-minute intro call. All coaching is over video calls so you can do it from the privacy of your own home. I do not sell financial products, just practical advice to put you in control of your finances.
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