Don’t Make These 5 Mistakes When Paying Down Debt
Paying down your debt seems pretty straight forward.
However, it involves much more than merely making monthly minimums or avoiding interest.
*** SPECIAL NOTE *** – If your credit cards, personal loans, or medical debts have become unmanageable and you owe over $20,000… then go here for debt relief. We can help!
Avoiding these 5 mistakes below can save you money and help you pay down your debt faster and more safely.
Mistake#1 – Adding New Debt
You may feel less anxious about taking on new debt as you pay down your current debt and see your accounts return closer to zero.
However, taking on debt as you pay it off is asking to shovel one pile of dirt out of a hole only to dump in another.
Not only are you perpetuating the problem you’re trying to solve, but you’re also hurting your credit score by opening new accounts.
Paying down your debt is a process that requires sacrifice and persistence.
If you’re struggling to make monthly payments on any of your loans, then it’s not a good idea to take on more debt.
Wait until you have a steady income, you’re able to make payments on time, and your credit score has been improving.
Mistake #2 – Keeping The Same Spending Habits
Your spending habits are likely what got you into more debt than you could handle.
Your financial situation will only become worse if you don’t make substantive changes to your budget.
Create a blueprint of your finances. Separate spending into fixed and variable, then determine what you can sacrifice and what can be reduced.
A handful of simple changes can snowball into a big difference.
Meal prep and make your coffee at home. Share subscription services with a friend or family member.
Find activities that don’t cost money, or try to negotiate your mobile service or car insurance.
Mistake #3 – Paying Down Debt Without An Emergency Fund
Depositing money into a savings account while you’re struggling to pay off your debt might seem like a bad idea, but it’s essential.
You won’t have the funds to weather a financial crisis if you give every dollar of your income to your creditors.
Imagine having little to no money and suddenly needing cash for a medical emergency or a car problem.
You’ll have to go even deeper into debt. Emergencies happen. It’s often better to pay off debt more slowly but more safely.
Mistake #4 – Paying Down Multiple Debts At Once
It may seem natural to spread your income around when paying off multiple debtors, but this leads to slow progress across accounts.
It’s better to continue paying the minimum on each debt while attacking your largest or highest-interest debts one after the other.
You could also consolidate your debt into one loan with a lower interest rate.
This approach simplifies the repayment process because you only have to deal with one creditor.
Mistake #5 – Not Working With Debt Experts
Working with professionals to settle your debt could save you a healthy sum of money.
Debt settlement companies take over communication with your creditors and negotiate a better deal for you.
Trust and experience are what make a good debt settlement company.
At Americor, we understand the unique financial challenges people are facing today.
As America’s trusted source for debt relief solutions, we aim to empower you with financial knowledge that can lead to informed decisions, whether it’s about savings, investments, or managing debt.
If your debt has become unmanageable and you have difficulty making your debt payments each month, then you should consider a FREE consultation call with one of our certified Debt Consultants, who can provide personalized debt relief advice tailored to your specific needs.
By taking proactive steps today, you can put an end to your financial stress and work towards a brighter financial future.
Remember, there is always hope for debt relief, and our team of experienced professionals are ready to guide you on your journey to regaining control of your finances.
For more information on Americor’s debt relief services, contact us today to see how we can help you eliminate your debts, and get on the fast-track to becoming completely debt-free!