Many people struggle with getting out of debt and successfully staying out of debt. Does that sound like you? If so have you ever caught yourself thinking that there is no possible way out, or even a glimpse of light at the end of the tunnel? How about motivation, are you sick of being at full throttle determination one week and a few weeks later losing all motivation to continue?
This could be a result of making some detrimental mistakes while you’re trying to pay off debt. And chances are you may not even think you are making mistakes.
It can feel like your running a never-ending circle. Which is understandable it gets old and tiring being completely out of money at the end of every month. Which is a result of not having the correct knowledge to manage your money properly. And that means it is time to switch things up.
Don’t worry there is a bright light at the end of the tunnel. I have some very helpful tips for you to implement on your debt repayment journey.
I wholeheartedly believe that getting yourself out of debt is an essential step to gaining financial freedom, building wealth, and overall taking complete control of your finances.
And the first step is you must stop borrowing any more money cold turkey.
Once you make the conscious and well thought out decision to stop borrowing any more money you will be way more aware of the common mistakes that many people make on their debt repayment journey. This will help you avoid those same mistakes and you’ll be 10 steps ahead of where you thought you’d be.
If you find yourself doing any of the following things below, you need to stop immediately. And avid justifying any bad habits. Take it from someone who is currently tackling $50,000 of debt successfully. Below are the tips that I recommend you use to make debt repayment as simple and easy as possible.
Here Are The Mistakes You Should Avoid
1 | No Emergency Fund
Before you take on the daunting task of starting your debt repayment journey, you should first have a financial cushion. This cushion will be your emergency fund and should have an adequate amount.
This emergency fund will be a lifesaver for you in the event of an unexpected expense. You will have the ability to pay for it, and then replenish your emergency fund as opposed to adding to your debt.
The issue generally boils down to the fact that many people tend to act dumbfounded and have no idea what to do when unexpected expenses come up. I mean what is your plan if your car breaks down? Or your refrigerator stops working? Or you get hurt and have medical bills to pay?
I hate to be the one to tell you bad news, but the above types of things will almost always happen in life. So instead of reacting by putting expenses on credit cards when they do you should prepare ahead by putting together an emergency fund so you can avoid any possible financial stress.
Don’t make your self out to be the victim in the situation. When the reality is they happen to everyone. SO plan ahead and become prepared.
2 | Not Making Changes To Your Spending Habits
You can think you’re going to get out of debt and remain living the same lifestyle that got you into debt in the first place.
Many many people want to get out of debt, however very few are will to sacrifice and make the required changes to actually say good-bye to debt once and for all.
So you’re here, and you have committed to making the necessary changes. Now let me tell you what your greatest tool will be it is your income. If you are savvy enough and determined you will find a way to cut expenses and free up any income you can to throw as much money as you can to your debt.
That is essentially the key to successfully live well below your means and still enjoy your life. This will require motivation and hard choices. You will have to scale back on almost everything, your outings, your eating out, and your entertainment to name a few. You may be referred to as cheap for a while, but embrace it, it means you are getting out of debt and smashing your goals.
I suggest not overlooking your small expenses. No matter how small they still add up quickly over time.
So the next time you want to take the family through the drive-thru because it is easier than cooking remembers you will be spending upwards of $30 for a meal you could have made for $5-10 instead.
It is easy to get caught up but it is wise to remember that any progress no matter how small is still progress.
3 | You Don’t Have A Budget To Live By
If you don’t have a plan to tell your money where to go eventually your money will start to manage you.
Honestly, most of us know the feeling of not having any money left at the end of the month, the stress is enormous.
When you avoid tracking your spending habits you are in a way setting yourself up for overwhelming financial stress down the road. And if you are married you will be openly inviting money fights. Living by a budget does not have to be restrictive, it actually allows you to have some peace of mind that you are successfully sticking to a financial plan. It is actually possible for you to get a month ahead with your bills and expenses when you commit to a budget that works for you.
If you like the idea of starting a budget but have absolutely no clue how to get started my powerful budgeting email course will set you on the right path. And if you take it a step further and purchase my budgeting binder you will no doubt have all the tools to create a budget.
I created this binder and course just for people like you with great intentions but no idea how to put your goals into action.
Making the choice to live on a budget is a small decision but it can have a really huge impact on your financial future.
4 | You’re Still Using Credit Cards
Cut em up now!
Seriously those things deserve to be cut up. I don’t even care if you are paying them off each month or how many Airmiles points or cashback dollars you earn. Just cut them up now.
I guess the brutally honest truth is there are no rewards when you choose to use credit cards.
Get your head out of the clouds! Do you really think that an industry that is known for top their top marketing and research teams that invest literally millions of dollars into researching consumer behavior would actually be willing to hand you over anything for FREE?
Girl, you’re smart don’t fall for it.
Once you decide to break up with your credit cards once and for all, you will actually notice positive results in your finances and you will be seeing them clearer.
Essentially you will have learned to spend less, track your spending, and overall care more about where your money goes.
5 | Still Building Debt
This should be common sense but, I will still say it. If you are working on paying off your debt, you should at all costs avoid consuming or taking on any more debt.
I understand it will take self-control. After all, with all the propaganda out there the temptation to take on more debt is very high.
If you get into the rut that most people do it can be extremely challenging to climb out of.
That rut consists of attending school for 4-8 years that will only have you accumulating large sums of debt. It can be 10’s of thousands of dollars possibly even 100’s of thousands of student loans. And then you graduate and buy a car with large loans and maybe even a house that has you committed to a mortgage. Or maybe you are maxing out all of your credit cards while trying to get out on your feet and just hoping that one day you will get it all under control.
So do yourself a big favor and make a financial plan for your life.
When you decide to take on debt you literally in all senses become enslaved to your lender. It’s a vicious circle that you must break.
You take on more and more debt and then have to work harder and harder to pay back what you owe. Don’t let yourself get burnt out from the horrible cycle, it puts a strain on your marriage and your relationship suffers.
Make a financial plan that is all I got to say.
6 | Just Throwing Money At Your Debt Without A Plan
Paying off debt is almost always more successful when you work your way from the smallest debt to the largest. Just make sure you keep your motivation.
Many people think that the very best way to pay off debt is to do so from largest to smallest. Or some may be misinformed that paying off the debts with the highest interest rates is the right way to go with debt repayment.
Personally, I am using the pay the smallest to the largest method. And I am having success! Trust me it works because it helps you gain momentum and keep going ahead strong.
People often start debt repayment with a big splash with large sums. However, as you may know from your first-hand experience after a couple of weeks you can become discouraged. Feeling like you are facing a mountain of debt that you feel there is no way you can accomplish.
Whereas when you start with the smallest you will actually feel like you are accomplishing something.
If you are wanting to pay off the debt in a quick fashion and need a hand doing so you should grab My Powerful Budgeting Binder that includes excellent snowball debt repayment sheets to make the process easier for you.
In order to be completely effective and succeed you must have a plan.
7 | Don’t Know How-To Say No To Yourself
If you are serious about taking control over your finances you must be willing to actually give up things and make the required sacrifices.
And this applies specifically to debt. So what are you willing to give up for a secure financial future?
If you are really determined to pay off your debt in a quick as possible fashion, you will have to be willing to give up a lot. SO don’t be stubborn.
If it makes you feel better to think of it as delaying your gratification until you can afford it then do so. Do absolutely whatever you need to do so that you can mature financially.
8 | You’re Not Keeping A Record
If you actually want to be successful at paying off your debt then your debt repayment goals must be clear, measurable, and specific. Simply stated if your goals don’t meet those criteria then they are just dreams.
So realistic goals that will challenge you in great ways to be better. So set yourself weekly, monthly, and annual goals to stay on track.
I am currently paying off debt so I know first hand the struggle. What I do is keep a visual on the fridge and every time we make a big payment I fill it in to showcase our progress. This works very well for me because I love to clearly see how far we have come. And how much further we have to go.
9 | Giving Others Opinions To Much Weight
Don’t take advice from others that do not have a plan themselves.
Simply, if your broke friends are making fun of you for managing your money responsibly use this as vindication to knowing you are doing something right.
And whenever the topic of finances comes up in conversation most people all of a sudden feel they are trained, financial advisors. And they want you to listen to their opinions, and thoughts about YOUR financial decisions and your future.
Often times people will say certain things in the effort to make themselves feel better about the direction of their personal finances.
But if you truly want to become financially free you need to work on developing rich people’s habits. And on the other hand, if you want to continue being broke, then you’ll develop poor people’s habits.
So stop listening to your broke friends. Pave your own path.
If you are struggling currently on your debt repayment journey, you should know that it is absolutely okay! We have all struggled with our personal finances from time to time. It is a part of being human to struggle. Debt repayment is a journey with many ups and downs, there will be times where you feel completely defeated and times where you feel like you are conquering something huge. The most important thing is that you stay motivated.
The best thing you can do for yourself is not quit. You will feel amazing when you have accomplished your debt and seen it through.
You could be the debt repayment story that motivates others to conquer their debt.
Just keep these mistakes in front of your mind while you are on your journey to being debt-free.