Money / Money Management

7 Mistakes People Make When Paying Off Debt

Paying off debt can make you feel all types of ways about the life you live. Going through all the stages of emotions every time you either pay off a bill. Some bill comes out of nowhere or you feel like you’re still drowning with no way to get ahead. Today, I want to share seven common mistakes people make when paying off debt.

No Plan Of Attack

When tackling debt the quickest way to feel as if you’re not going anywhere fast is to not have a plan of attack. You’re just throwing money at debt but not actually tackling the debt. When I started my journey for paying off debt the first thing I did was

  • Order my credit reports
  • Find errors + write letters about to them unions
  • List debt in lowest to highest level

Currently, utilzing my Debt Plan Tracker I can see all my debts in one place and know what is going on. I no longer feel like it has a hold on.

Not Living On A Budget

If you want to get out of debt you must live on a liveable budget. Living above your means is causing you absurds amounts of stress and what actually got you in place. I was taking out student loans to do whatever and now at thirty I am paying for it. Decided now you will do a zero budget, monthly budget, 60/30/10 budget or whatever fits your lifestyle. Just know you cant do what you were doing before and think you will get out ahead.

Sharing insight from what I have learned spending the last two years paying off consumer and student loan debt. | Imperfect Concepts #smallbusiness #blogging #money #studentloan

Snowball Effect Nonexistent

This was the best thing I ever learned from Dave Ramesy. It might seem redemial when you read about it but it was the aha moment to everything going on. Once, you organize all your debt and realize what you owe and to whom. You will paying the minimum balance on all debts but you attack the smallest to the largest in money size not interest. The problem people face is they are focused on attacking the interest on the debt. They need to focus on how they can pay it off quicker.

Working With A Partner

Too many people are hiding behind their debt with no help. One of the best things I could do for myself was share with my family, friends and audience. This has given me countless accountability and the ability to learn from others. Don’t go at paying off alone. Get a cheering squad around you.

Paying Extra On Debt

Just paying the minimum is not going to cut it. You will need to pay extra will doing the snowball effect on your debt. If some of your debt is extremely high and tightening your budget call the lenders asking for help. Saying can they lower your interest rate and payment.

Increasing Income

If you’re not up for a raise at your current job its time to think about adding work. Take on a part time job that brings in extra income. All extra income goes at the smallest and works its way up. Even if a real part time job is hard to find, you can create one with a side gig there are so many things you can do to bring in $1000 extra ever month.

Celebrate Wins

This is the part that people skip over that they need to remember. Celebrate every win that comes along with paying off debt. I have an account where I can treat myself. It might be going to movies and actually buying snacks. Or even buying something full price at Jcrew. Celebrate you are on the path to tackling your debt.

These are just some of the mistakes people make when paying off debts. You will be out of debt soon. Take it one step at a time.

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Imperfect Concepts is the premier destination for the creative women business owners looking for how to guides, tips, motivation & inspiration.

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