Are you trying to pay off debt? If so, congratulations! Paying off debt is a huge accomplishment, and it can be life-changing. However, if you’re not careful, you can make some common mistakes that can slow down your progress or even stop it altogether.
Luckily, Your Debt Expert have shone a light on some of the most common mistakes people make when they are paying off debt. Alongside helping others start their journey towards becoming debt-free, Your Debt Expert provide advice and information on everything from debt collection to setting up an IVA.
Check out the top mistakes below.
1. Not starting early enough
One of the biggest mistakes people make when trying to pay off debt is waiting too long to start. The sooner you start, the better off you’ll be. Interest accrues on debt, so the longer you wait to start paying it off, the more you’ll end up paying in the long run. However, making debt repayment a priority can be difficult, especially if you’re already struggling to make ends meet. That’s why it’s important to get creative and come up with a debt repayment plan that works for you.
2. Not making enough headway each month
Another common mistake people make is not paying enough towards their debt each month. A good rule of thumb is to try and pay double the minimum payment, but even if you can only afford to pay a little bit more, it will make a difference over time. debt snowball method, where you focus on paying off your smallest debt first and then move on to the next one. This can help you stay motivated and see progress each month, which can be key to keeping debt repayment a priority.
3. Not having a debt repayment plan
One of the most important things you can do when trying to pay off debt is to create a debt repayment plan. This will help you stay on track and make debt repayment a priority. Without a plan, it’s easy to get sidetracked and give up on your debt repayment goals. There are many different debt repayment methods out there, so find one that works for you and stick to it.
4. Not tracking your progress
Another common mistake people make is not tracking their progress. It’s important to know how much debt you’ve paid off and how much you have left to go. This information can help keep you motivated and on track. There are many different ways to track your debt repayment progress, so find one that works for you and use it regularly.
5. Not making extra payments
If you have the opportunity to make extra payments towards your debt, take advantage of it. Any extra money you can put towards debt will help reduce the amount you owe and shorten the repayment timeline. If you get a bonus at work or a tax refund, consider using that money to make an extra debt payment.
6. Not negotiating for lower interest rates
One way to save money on debt repayment is to negotiate for lower interest rates. This can be done by calling your creditors and asking for a lower rate. If you have good credit, you may be able to get a lower rate simply by threatening to take your business elsewhere. It’s always worth trying to negotiate, as even a small reduction in interest rates can save you money over time.
7. Not consolidating debt
If you have multiple debts with different interest rates, it can be helpful to consolidate them into one debt with a lower interest rate. This can save you money on interest and make debt repayment easier. There are many different ways to consolidate debt, so find one that works for you and get started.
8. Not staying motivated
One of the biggest mistakes people make when trying to pay off debt is not staying motivated. It’s easy to get discouraged when you’re in debt, but it’s important to keep your eye on the prize and remember that debt freedom is possible. There are many different ways to stay motivated during debt repayment, so find what works for you and stick with it. debt repayment is possible if you’re willing to make it a priority. By avoiding these common mistakes, you’ll be on your way to debt freedom in no time.
Debt repayment is a process that requires time, effort, and dedication. However, by avoiding these common mistakes, you can make debt repayment a priority and achieve your debt freedom goals.