Paying down debt can be very challenging, which is why you need to be focused on your financial goal and fully committed to achieving it. In a previous post, we looked at some of the most common mistakes that people can make when dealing with the burden of debt. Today, we will look at a few more mistakes that you want to be sure to avoid so that you are not derailed from you reaching your financial goal. 360 Credit Consulting knows that trying to avoid mistakes when you are working to get out of debt can be frustrating and overwhelming, and that is why we are here to help. Contact our office in Austin today and let us create a plan tailored to your specific needs so that you can get the credit score you deserve.
1. Tempting Yourself
You may not realize it, but you might be your own worst enemy when it comes to spending money that you shouldn’t. If you have signed up for emails that entice you to spend, then you are hurting your willpower to stick to your budget. It is relatively easy to see something that we like and purchase it within the span of a few minutes and keystrokes. This kind of spending is almost mindless because you probably get caught up looking at products that you like, yet don’t really need, and still purchase. Help yourself to avoid frivolous spending by unsubscribing from the emails that invite you to spend money and further damage your credit score.
2. Pay Only the Minimum
While you have to pay the minimum on your credit card bills, you should always aim to pay more than the minimum. How much more will depend on the budget that you have set for yourself. The reason you want to avoid paying the minimum is that the interest on your account is most likely accruing each month, which means that you will owe more than you actually spent to begin with. It also means that it will take longer for your credit score to improve. Depending on how high the interest rate is, you could actually pay more than twice what your actual expenditures were to begin with. The only exception to this rule is if you are making a lump sum payment to one credit card — then pay just the minimum on your other balances.
3. Skip Saving
It is easy to avoid saving money during this time because your sole focus is on paying off your debt. While this is an understandable mistake, you should avoid it at all costs. Instead of focusing on how you can’t afford to save, you should focus on the fact that you can’t afford not to. Building your savings will spare you from using credit cards in the future when things go wrong. There will always be expenses, and your savings can be the reason that you avoid going into debt and damaging your credit score again. When you sit down to plan your budget, be sure to include a section for savings. If it helps, you can think of it as a bill that needs to be paid each month. The amount you put into it should increase over time as you work your way out of debt.
Making mistakes is probably the reason why you are currently in debt. We want to help you avoid making more so that you can get out of debt and rebuild your credit score as quickly as possible. 360 Credit Consulting is here in Austin and ready to help you with all of your financial questions so that you can achieve the financial stability you deserve. Call today for your free credit analysis.