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Home » News Articles » Common Debt Payoff Mistakes…Just Don’t Do It! (Pt 2)

You didn’t think I would forget the second part of the most common debt payoff mistakes, did you? Read on…

7. No Plan

To successfully get out of debt, you need a plan.

Very simple.

Throwing money at various debts is okay. However, with a plan, success happens FASTER. Knowing when a debt will be paid off with a plan is a HUGE motivation. You can SEE your progress.

8. Lack of Motivation

Speaking of motivation, it is HUGE when paying off debt. This common debt payoff mistake will make or break your success.

You need to keep your motivation going. One of the best ways is to plan milestone celebrations. They don’t have to be huge or costly.

Track your progress visually with a debt tracker.

9. Wicked Debt Cycle

The continuous debt cycle is harsh. This common debt payoff mistake is why so many try to pay off debt and fail over and over.

The debt cycle must be stopped to start paying off debt.

If not, then you pay off debt only to accumulate more debt in the process. Debt moves from one pocket to another. Thus, continuing the debt cycle.

STOP USING DEBT AS A METHOD OF PAYMENT. Period. Debt cannot be an option anymore. If you can’t afford to pay for the item in cash, then you do not need the item. Terminate this wicked debt cycle once and for all.

10. Unexpected Expense

New tires, new prescription eyeglasses, school related expenses…the list can go on and on.

Not really unexpected…but forgotten? Don’t fall into the trap. Start planning for those funds. Consider a miscellaneous fund of about 5% of your income as a start.

11. Knowing Spending Pitfalls

What causes YOUR spending of money?

Not knowing the spending pitfalls is a common debt payoff mistake and a huge distractor in saving money to reach financial freedom.

These habits have become so ingrained that most people don’t even realize it. Maybe it is a society push to spend money.

Maybe it’s a downfall of a Target run or Amazon online shopping? Coffee run?

By knowing your spending pitfalls, you can start consciously making changes. Then, pay off debt faster and then save more money.

Make a list of your impulse purchases in the last month? How much does it add up to? Of those purchases, were they needed? Do you regret any of them?

12. Lack of Budget

Most people don’t use a budget. However, studies have shown that millionaires do!

Do you budget? Or did you make one and forget about it?

Don’t fall into another common debt payoff mistake without creating a budget.

To succeed with money, you must know where your money is going. This is true across all income levels.

Create a budget that works for you. This aligns with making a plan for your money.

Most people budget and give up within the first month and then again in month three. Stick to your budget while paying off debt. Your focus: everything extra can be applied to the debt.

You CAN do it. Avoid these mistakes. Stay organized. Reward yourself.

You are NOT alone. Financial counselors can help review your budget and “coach” you through your debt payoff!

Portions excerpted from MoneyBliss.Org

Holli Lewandowski, Certified Credit Counselor, Educator, and Advocate