Dumping Your Debt? Watch Out for These Mistakes
Dumping Your Debt? Watch Out for These Mistakes
Making the decision to pay off all your debt and taking steps to do it is an amazing accomplishment. If you are in the process of dumping your debt, I applaud you! The path to debt freedom is not an easy one.
Most likely, you did not intentionally get into debt; it kind of “just happened,” so to speak. The opposite is true about dumping your debt. It won’t just happen. You have to be intentional about clawing your way out of it.
But, regardless of how you got to where you are today, and regardless of how you’re attacking your debt, there are some common pitfalls you may encounter during your debt-free journey — if you’re not aware of them.
Increase your chances of success by being mindful of these potential mistakes while dumping your debt.
Hiding Your Debt-Free Journey From Everyone
A typical mistake people make is not telling anyone that they are working to pay off their debt. This could stem from fear of the response they’ll receive, embarrassment about their situation, not being used to talking about money, the desire to keep things private, or all of the above.
Wanting to keep things under wraps is an understandable choice, but it is one that will have an adverse impact on the effectiveness of your debt-free journey.
When you hide the fact that you are dumping your debt from others, you cut yourself off from the built-in accountability that comes when people know what you are doing. You might be likely to fall back into old habits when you don’t have to worry about anyone saying, “Hey, I thought you were cutting back?” or “How are things going with paying off your debt?”
During the moments you feel tempted to give up (and you will have those moments), it will be incredibly easy to abandon your debt-free journey, since no one knew what you were doing in the first place.
Forget about being embarrassed; you are more likely hear, “Oh me too,” when sharing your challenges with living within your means, than to receive criticism. Don’t miss out on the support you’ll gain from those who understand.
Telling Everyone About Your Journey
Another common mistake people make when paying off debt, is telling everyone about what they’re doing. What? If hiding your journey from others isn’t good, how is sharing it with everyone a mistake too?
Well, you should definitely let people in on what you’re doing, but maybe not your ornery neighbor, your kid’s teacher, and the person in line behind you at the supermarket. Okay, there’s a little exaggeration there, but the point is, be wise with whom you do share your plans.
When you begin talking money with others, it’s natural for people to self-reflect on what’s going on in their own lives. Your choice may make them feel bad about their decisions, causing them to want to make you feel that what you’re doing is somehow wrong. Misery loves company, right?
They might choose to cast doubt on your plans, be insensitive to the changes you’re making, or be downright cynical.
So while sharing that you’re dumping your debt is a positive thing, be mindful of the people in your life that you should not tell like toxic friends or relatives who push their own agenda upon you.
But an easy mistake people make when paying off their debt is assuming that experiences, entertainment, and other enjoyable things need to be dumped right along with the debt. Not true.
Granted, you will need to tweak how you go about your fun (and being extravagant with your money will need to be delayed until you have some), but you still need to be intentional about living your life and enjoying it while you are paying off debt. You do not want to look back at your journey with regrets.
If your path to becoming debt-free is devoid of anything fun, you may give up on it altogether. So, be careful of making your debt-free journey so austere and rigid, that you’ll walk away from it. Find creative, low-cost, and free ways to enjoy yourself while dumping your debt.
• 3 Things NOT to Sacrifice When Paying Off Debt
Attempting to Achieve Other Big Financial Goals
If you are working on paying off your debt, then undoubtedly, you are putting a lot of time, focus, and energy towards that goal. Be careful of thwarting your efforts by taking on other significant financial tasks that will compete for that time, energy, focus, and most importantly, resources.
Like attempting to lose weight by doing too much too soon, if you try to do a million and one things with your money at the same time, you will likely give up on all of them. Becoming debt-free is an important financial step that builds a healthy and firm foundation so you can achieve other long-term goals, so beware of pursuing other objectives before that foundation is set.
Increase your chances of a successful debt-free journey, by focusing on it.
The last thing you want to do at the end of your debt-free journey is to turn around and see a trail of mistakes, unintentional sacrifices, and regret.
You’re traveling a road that is not common or seen as traditional in our culture, making the journey to becoming debt-free that much more challenging.
Being aware of these pitfalls and choosing to be intentional about countering them will help you lead a successful journey.