Have you made a decision to pay off your debt? Learn how to stay on course.
Ready to pay off debt?
Deciding to get out of debt finally can change your life. If you are willing to commit to stay the course and pay off your debt, your life will never be the same again.
Getting out of debt takes a little more than just paying off your credit cards. It can involve a long process and even years of changing your spending habits.
Here are ten mistakes people make when paying off debt, so you can prevent yourself from making the same ones!
Don't make these mistakes:
Mistake 1: Not addressing the real reason why you are in debt
Paying off debt is a great accomplishment. However, if you don’t address the reason why you got into debt, you will continue to find yourself in the same position time and time again. Address the reason you are in debt first, and make any necessary changes you need.
Mistake 2: Not having any money in savings
Your primary goal should be paying off your debt. However, if you don’t have any money in savings or even an emergency fund, you are setting yourself up for more debt down the road. Emergencies will happen, and you need to have something in savings to help get you through hard times.
Mistake 3: You don’t have a plan
You don’t have to have a 15 step plan to pay off your debt, but you should have something! Any plan is better than no plan at all.
Mistake 4: Paying off debt isn’t a priority
If you want to be serious about paying off your debt, you need to make it a priority. Any extra income should serve as extra payments, and you should be working to cut every penny so you can make extra payments.
Mistake 5: You’re still using credit cards
If you are paying off debt, you need to stop using your credit cards! Using credit cards or taking on more debt is only going to make your debt repayment longer and eliminate any progress you’ve made.
Mistake 6: You don’t change your spending habits
If you want to get out of debt, you need to change the spending habits that got you to this point. This might mean you can’t afford to eat out at restaurants or even go out with your friends for a few years, but once you are debt free, you can reinstate the habits you can afford to do.
Mistake 7: You don’t create a budget
If you don’t create a budget, you won’t have a plan for where your money should be going. Tracking your expenses is a great first step, but you need to tell your money where it should be going.
Mistake 8: You try to do this alone
If you are going to pay off your debt, especially if it is a lot of debt, you want to have a support system in place. This will not only help keep you strong when you’re feeling weak but keep the social aspect of your life even when you can’t afford to grab a coffee.
Mistake 9: You aren’t making debt payments first
Before you put any money into your account for yourself, set aside your debt payment money. Groceries and even gas are considered flexible budgets, and you should be treating your debt just as you would any bill.
Mistake 10: You don’t celebrate small victories
You don’t necessarily have to go to Disney World to celebrate, but when you pay off a large sum of debt, have a mini celebration! Have a little party with your family, do a small splurge activity, or find a way to celebrate your accomplishment.
Paying off debt isn’t easy, and mistakes along the way are to be expected. However, if you avoid these ten mistakes, you will not only be able to pay off your debt sooner, but it will be a much less stressful experience.