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InFinance

7 Mistakes You’re Making When Paying Down Your Debts

Before I started getting serious about paying down my debts, I was doing a bunch of these that I didn’t even realize were hurting me in the long run.  It took me quite some time to figure the whole thing out.  I remember when I used to just ignore my debts like that was going to make them go away.  I also wasn’t smart with the way that I accumulated debt. I was just trippin’ all across the board when it came to my debts.  For instance, I was allowing the interest to just pile up over the years which ultimately caused me to owe back a ton more than what I originally borrowed! Additionally, while in graduate school I would take out so much more extra on my loans so that I could use that money to live off of. At the time those refund checks were lit, but looking back it was not worth it one bit.

It’s important to get a handle on your debts sooner rather than later before they get out of control like mine was. Ignoring your debts does nothing but hurt you in the long run. Trust me I know this all too well from experience. Please don’t be like me! Once you’re able to get a handle on your debts, you will feel so much more at ease and confident about coming up with a game plan to eliminate them once and for all. I wanted to share with you a few mistakes that people often make when trying to pay off their debts so that you can be that much more successful from the jump.

Here’s 7 mistakes to stop making when working on paying down your debts:

1. Not being clear on your why. In order for you to be successful with paying off your debts, you have to know why you want to be debt free.  This is going to drive and motivate you until you reach the finish line.  If you are not clear, you will be more susceptible to getting off track at some point.  Getting out of debt has to be your priority, or else you won’t make any progress.

2. Not having a plan to slay those debts. How and when (strategies). This is something that I probably mention in almost all of my blog posts.  You HAVE to have a plan in place!  You need to create a detailed plan along with the actionable steps that you are going to take in order to get there.  How are you going to pay off your debts?  When do you want to be debt free by?  All of these things are important when it comes to you being successful. Additionally, you need to have a list of all of your debts to include the interest rates and minimum payments.

3. Not making a few sacrifices. Sis, you have to stop going shopping everyday if you want to work on becoming debt free.  You can’t go out with the ladies for happy hour every evening after work either.  You have to learn how to say no and make some sacrifices. This is where you have to remember your why. What are your main priorities here?  I’m not saying that you have to cut these things out completely, but have some self control.  Having self control and being disciplined is going to be the driving force of your debt payoff success.

4. Not paying extra on your debts. (focus on one debt at a time to put all extra into until it’s paid off) In order to really put a dent in your debt, you have to put down more than the minimum payment amount each month.  You should be putting as much as you can towards your debt and ideally focusing on one debt at a time.  By making an additional payment each month towards your principal you can decrease the amount of time it will take to payoff the debt and ultimately save money in the end.

5. Not paying towards the principal. You don’t want all of your money going towards interest only. You want to be putting as much as you can towards the principal of your debt, which is the amount that you originally borrowed.  This mistake right here can waste you a ton of money!

6. Piling on more debt. Like who are you trying to fool thinking that you’re going to be fine with creating even more debt while working towards becoming debt free? This is why having an emergency fund set up prior to attacking your debts is key.  That way, if something comes up unexpectedly that you have to come outta pocket for, you won’t have to swipe your credit card and tack on more debt.

7. You’re in denial. You don’t even know how much debt you actually have.  You avoid looking at your statements or checking your credit report.  Being in denial isn’t helping the situation; you still have debt that you are responsible for paying off.  Not acknowledging the debt isn’t going to make it magically disappear.  I get it though, I used to be in complete denial about my situation. Boy did I waste a lot of time (and money as interest kept piling up) because of it!

Paying down debt doesn’t have to be as hard as we often make it out to be. You just have to have a clear understanding of what you want to accomplish and what you need to do to make it happen. If you want something bad enough, you are willing to do whatever it takes to get it. How bad do you want it?

Now let’s talk about it.  Do you think you’re making any of these mistakes? What efforts are you putting forth to make sure that you’re attacking those debts? Sound off in the comments, I wanna hear from you!

P.S. If you thought that this was insanely awesome or made you think about someone that you know, please share this with them!


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