Avoid These Common Mistakes to Get Out of Debt Faster

I'm in debt

Debt isn’t fun.

It’s stressful, overwhelming and keeps us up at night. In 2017, the American Psychological Association lists money as the second highest cause of stress. And although stress is part of our lives, money stress is something quite different.

Money is directly tied to our daily lives. Financial struggles mean late fees, risking our electricity being shut off, or struggling to pay for medication. It’s not just the difference between lobster or ramen noodles for dinner. It impacts the quality of our lives.

Now that we’re becoming more depressed by the second, it’s important to remember that we’re not alone. Everyone has money issues. While some problems are more challenging than others, there are some very common mistakes that we all make in our quest for financial freedom.

Waiting Too Long to Act

We waited too long to start climbing out of debt if we’re staring at imminent financial ruin or a catastrophic life-altering financial event (like your car or home is about to be repossessed). Yet, George R.R. Martin, author of A Game of Thrones, said:

“Most men would rather deny a hard truth than face it.”

No one loves accepting the truth of their financial situations. In fact, no one wants to deal with any negative situation. It’s the same principle that keeps folks off their scales because they don’t want to know their exact weight. If they don’t see the actual number, it’s not a reality. It’s not until they face something unavoidable, like a health scare or they can’t fit into their clothes, that they have to face the inevitable.

It’s the same thing with money problems. It’s easy to forget we’re facing a crisis when we put all our bills in a basket behind the couch. Then we’re slapped awake with a disconnection notice that needs to be paid yesterday. Although it’s not fun, facing our financial challenges now can help us prevent bigger problems down the road.

Ignoring Expert Help

Navigating the financial world is tough. Climbing out of debt takes more than a dream and a calculator. Since everyone’s situation is different, what works for a friend may not be the right plan for us. That’s why it’s crucial to find the right partner to help us get out of debt.

Finding the right expert help starts with understanding our exact challenge. We may face huge life decisions like whether or not to file bankruptcy. That’s not a decision that should be made on a whim or because our “cousin’s husband filed a few years ago and it’s all fine now”.

Maybe we’re deep into credit card debt and believe that consolidation is our best option. But that’s a guess based on a commercial or some pop-up ad. The good news is that many financial experts help for free or have low-cost options. For example, debt consolidation organizations can help design a debt-reducing plan. This isn’t the time to wing it or assume we know what we’re doing because expert help is just a phone call away.

Forgetting to Change Our Habits

We’re creatures of habit. We go to the same grocery stores, gas stations and playgrounds. We eat at the same restaurants and wear the same outfits. And we get caught up in the same patterns, even when it comes to our finances.

In The Power of Habit: Why We Do What We Do in Life and Business, author Charles Duhigg explains how habits work: cue, routine, reward. Let’s say we want to drink less coffee in the morning. The cue is waking up in the morning with a groggy feeling. Our routine includes heading into the kitchen in the morning and brewing coffee. The reward is a few cups of delicious and energizing caffeine. We have to disrupt something in that pattern to change the habit and altering this daily habit could be as easy as using a smaller coffee cup.

We’ll all have bad habits that led us to our current debt. And if we continue to do the exact same things over and over, we’ll end up with more financial challenges. The only way to get out of debt is to change our habits around money. This one takes some time to figure out, but an honest self-reflection will help us pinpoint our worst habits and where we may be able to change them.

Creating a Plan that Works for Us

None of this is easy, but it’s all doable.

We’ll need to make smart choices, change our habits and make getting out of debt a priority. We may have to deal with temporary stress to gain long-term financial freedom. We may stumble along the way, we can avoid many of these common mistakes with a little planning and committed focus.


Main Image Credit.

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