Okay,
so you have debt. It's frustrating sure, but it's not the end of the
world. Millions of people are in the same boat right now, and many of
them are steadily working their way toward being debt free. You can do
it too. No matter how you got into debt, you can make it out.
This post originally appeared on ReadyForZero.
Maybe you
bought a car on credit, maybe you paid for your education with student
loans, maybe you used credit cards at the mall one too many times.
Whatever the cause, that's all in the past. Now it's time to move
forward. But how?
As it turns
out, the key to reaching debt freedom is to avoid making these five
common mistakes that some people make with their debt:
They Don't Negotiate
It's
surprising how many people don't think to negotiate the terms of their
debt repayment. If you have credit card debt, it's one of the first
things you should try. Here's how: you start by calling up your credit
card company and asking for a lower interest rate. It sounds simple, but
lots of people never do this–and it can save you hundreds or thousands
of dollars in some cases. You can use this handy guide to lower interest rates to prepare before you make this call.
Here are
some other instances when it helps to negotiate: if you have medical
costs and can pay a fraction of the amount up front (in cash), try
negotiating for a lower payment. Certain health providers will agree
charge you a lower amount if you can pay with cash right at the
beginning. Read our complete guide to negotiating medical debt to learn more.
You should
also know that if you're struggling to make payments, there may be help
available if you ask for it. For example, federal student loans are
eligible for the Income-Based Repayment plan, which can drastically lower your monthly payments. And you can always ask for forbearance on student loans, car loans, or even credit cards.
They Think "Everyone Is Doing It"
One of the
ways people get into trouble with debt is by assuming that "everyone is
doing it." This can come from seeing your friends and family getting
themselves in debt or from going to the mall and seeing everyone buying
expensive clothes and gadgets with a swipe of the ol' credit card.
It can be tempting to think "I guess everyone else is in debt, so it's
okay if I am too." But that's an impediment to becoming debt free.
Instead, you should take on the belief that you will not be satisfied
until you have paid off every cent of your debt—no matter what anyone
else is doing.
They Assume They Can Pay Off Debt Without Having a Plan
Too many people think they can pay off debt without having a plan. But usually, you can't! We recommend using ReadyForZero
to make a personalized plan for paying off your debt and building
wealth. The reason this is so powerful is that you actually create a
plan to show you how much money to pay toward each of your loans and
credit cards every month. You also get email reminders sent to you from ReadyForZero that ensure you will not forget any payments. Don't make the mistake of failing to pay off debt because you never made a plan.
They Forget to Change Their Attitude
This can be
one of the hardest mistakes to make and one of the hardest to learn
from. The reason is that humans don't like change. For the most part,
we're comfortable with where we are right now. But for those of us in
debt, usually we have to change our attitude to change our outcome. We
have to start thinking in a new way and change how we look at money. The
best way to accomplish this is to proactively decide how you'll
incorporate new beliefs about your finances into your daily life.
They Juggle Other Priorities
When your
goal is to get out of debt, it's usually necessary to make it your #1
priority. Too often, other things—like convenience, new toys, travel,
etc.—can get in the way of your debt payoff. As fun as it is to take a
vacation or buy the latest tech gadget, these things slow down your debt
repayment and may keep you in debt indefinitely. You'll need to do
without these things and focus 100% on your debt if you want to pay it off as fast as possible. To help you keep your priorities straight, it's always a good idea to rely on a budget. And remember, your budget
should empower you to spend on the things that are important to you. If
becoming debt free is important, then you can make it a priority.
More at: http://lifehacker.com/5-big-mistakes-keeping-you-in-debt-and-how-to-overcome-1467734451
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