Making the decision to get out of debt can be life-changing. But it can also be frustrating and tempting to give up if you don’t see much progress. Just remember, you didn’t accrue the debt overnight and it’s not going to go away overnight, either. You’ll enjoy more success and less frustration if you can see your credit card balances steadily going down. Here are five things not to do when getting out of debt.
Adding More Debt
It might seem obvious, but it still has to be said. To successfully work your way out of debt, you have to stop adding to it. Switch to a cash-only lifestyle. You no longer have the option to “charge it.” If you can’t pay cash for something, don’t purchase it. It’s a great way to deepen your understanding of the difference between wants and needs.
Failing to Set Goals
Have you ever heard the expression: A goal without a plan is just a wish? It’s one thing to say you’re going to get out of debt, but if you don’t plan and set goals, you are much less likely to succeed. Set realistic goals and work out a plan to achieve them.
Paying Only the Minimum Amount Due
To make debt go away, you need to pay more than the minimum amount due every month, which often barely covers the interest that has accrued. If paying the minimum is all you can afford, consider Credit Counseling. This free service can help you evaluate your current situation and formulate a plan to move forward.
Ignoring the Budget
This goes hand-in-hand with goal setting. Ignoring – or worse yet, not even having – a budget is a sign you’re not fully committed to getting out of debt. If you aren’t keeping track of how much money is coming in, how much is going out and where it’s going, how can you determine how much you have to put toward paying down debt? Our Living Expenses Calculator can help you plan a realistic budget.
Not Asking for Help
Getting into debt was easy. Getting out of debt is not. Let friends and family know you’re actively trying to pay down your debt and that you may not have as much disposable income for shopping or other activities. Letting other people know what you’re trying to accomplish helps keep you accountable, and may inspire them to do it, too.