If you are trying to work your way out of debt and are not succeeding, it may be that you are making some of the most common mistakes. Even one simple mistake with your strategy to get out of debt can hold you back.
Here are the most common reasons why some people struggle to get out of debt and never seem to make any headway.
1. Lack of patience
In most cases it is going to take some time to get out of debt. It probably took you years to get into this situation and it may take some time to get out of debt. Patience is the key to your fight against debt. Once you realize that there is going to be sometime involved, you’ll be better off and can commit to getting out of debt for the long haul.
2. Goals not established
It is really hard to reach the goal of being debt-free if it has not been firmly established. The way to do this is to set pen to paper and write it down. There is something about writing down your goals that makes them more fixed, real and attainable. If you prefer to write them down on your computer, that will work as well. The idea is to just get it written down somewhere to make it more of a commitment.
The goal needs to have a deadline. Crunch some numbers and see when it would be possible to get your debt paid off. Don’t worry if it will take a while, the important thing is to get it done.
3. Not understanding credit card companies
A lot of people have the misguided notion that credit card companies will help them out if they have a problem paying off the balance. It would be nice if this was true, but the banks are only interested in their profits. Credit card companies are not going to offer you a hand if you have a hard time paying your bill. You have gotten into the situation on your own and you will have to take full responsibility for getting out of it.
4. Spending habits remain the same
If you really think about it, the problem that you are having with debt right now has come about due to poor spending habits. If you are not going to change these habits, how can you really expect to get out of debt? This is one of the first things that needs to be addressed when you’re having a problem with credit card debt.
If you are a shopaholic you will have to put your credit card away and not use it for any future spending. Using cash is a good way to stop debt and it is easy to get into the habit of using a debit card or money in your pocket to pay for items.
5. Getting rid of credit cards
It’s time to destroy your credit cards if you cannot handle them responsibly. This is a very common problem for a lot of people, so you don’t have to feel alone. There is a lot of temptation to spend and it can be very difficult to walk away from a good sale if you have a credit card available.
If you don’t want to get rid of your card but just want to put it away for a while, ask one of your friends or family members to hold onto it for you. That way, you won’t have instant access to your card and will only be able to use it in emergencies. Just make sure that you tell the person that is holding onto the card for you that you don’t want them to hand it over unless an emergency arises and you don’t have the funds to cover it.
Although these are all simple mistakes, they are quite often the major reasons why people remain in debt. Sometimes it just takes a simple reminder to get you back on track to becoming debt-free in the future.
Timothy Ng is an experienced personal finance writer, specialising in credit card comparison. Check out his guide to best credit cards where he will step you through the process of finding the best credit card.
- 10 Tips to Diminish Your Consumer Debt (debt-consolidation-2u.com)
- Debt Write Off Services from Attorneys (2011taxes.org)