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It’s common knowledge that debt simply isn’t good for your financial life, but there is no time more dangerous to have debt than in pre-retirement. The 15-20 years prior to retirement is go-time for your financial life. You have these two decades to get yourself set up for a successful retirement. The habits you make and break during this time will make or break your retirement. To pay off debt and set yourself up for a great retirement, follow this simple three-step plan.

1. Evaluate where you are.

Debt tends to go hand-in-hand with denial. It’s much easier to avoid knowing exactly how much you owe and how much longer you’ll have to pay, but facing reality is the only way out. Take the time to get to know your numbers. Your numbers may be startling, but that’s okay. Reality checks are good for your financial life.

First, tally up how much you are paying toward debt each month—including your mortgage, car payment, credit card, medical bills and any other consumer debt—and determine what percentage of your take-home pay you are spending on debt. For example, let’s say you bring home $4,000 a month and are spending $800 a month on your mortgage, plus $200 a month on credit card payments. In this case, you’d be spending 25 percent of your income on debt pay down.

This may be an upsetting percentage to you, but there is a silver lining. Paying off debt in pre-retirement actually helps decrease your dependence on your income. Your income will decrease in retirement, and adjusting to a new level of income is what most people struggle with the most in retirement.

2. Make a plan.

While the silver lining of debt in pre-retirement is a decreased dependence on your income, the silver lining only really works to your advantage if you actually make a plan to pay off your debt before you retire. So whether you are 10 years from retirement or two years from retirement—making a plan is your first priority.

There are two common ways to pay off debt: throwing extra money at every debt or trying to pay off high interest debt first, but there is a third option that works infinitely better than either of these. It’s called the Momentum Method. It’s very simple.

First, list out all your debts starting with the smallest balance debt first. The list will end with the highest balance debt. You will ignore interest rates and minimum payment amounts when creating this list. Does this go against all your instincts? Yes, but this method works. From there, begin paying the minimum on every debt (not a cent over!) except for the first debt on the list. You will begin to pay as much as you possibly can on the debt with the smallest balance. And guess what happens? This first debt will be paid off before you know it. What this does is create momentum. You’ll be excited about your progress, and it will spurn you on to knock out your next debt.

3. Cut expenses.

If you’re feeling discouraged by debt, it’s okay. Realizing you have a debt problem is a tough thing, BUT you have to take heart. You can do this! You now have a grip on your debt, and you have plan. Next you need to start cutting expenses.

Cutting expenses does two things for your financial life, it frees up money to put toward debt and it helps you live even further below your income level. The latter will be particularly helpful during retirement. Cutting expenses can be as simple as using less electricity and eating out less, and as drastic as canceling services and moving into a less expensive home. Cutting expenses is a behavior change. This means every day you have to fight the urge to spend. The good news is that behaviors are hard to develop, but once developed they are hard to break.

You want to retire, right? Turn this desire into a drive to pay off debt. Paying off your debt is one of the biggest hurdles pre-retirees face. The steps are simple: take stock of what you owe, make a plan, and pay off your debt. Your future (hopefully comfortably retired) self will thank you.

Peter Dunn, aka Pete the Planner, is an award-winning financial mind who has authored five books, hosts the popular Pete the Planner radio show and travels around the country offering financial education. His signature wit will have you laughing as you learn. For more from Peter, visit www.petetheplanner.com.