Financial Mistakes That Are Holding You Back

Paying back a loan and getting out of debt can be challenging at times. It doesn’t matter why you took the loan out in the first place, it was in the past and now you are attempting to pay back your debt and get yourself back in a position of being on even financial ground.

However, there are many things that hold you back and mistakes that you can make that will impede your progress. The truth is that getting out of debt is hard work and it enables making sacrifices and working hard. The extra money to pay off your loans will not simply come out of no-where, so you will need to either spend less or make more in order to make up the difference.

Most of the time, this frugal lifestyle means cancelling your cable TV subscription, rarely eating out in restaurants, not getting new furniture or clothes, not getting your hair done that often, not going on expensive holidays, having a strict food budget and more. Paying off debt is an exercise in delayed gratification. You might want to simply give in and spend money at the time, because the reward of being debt free is so far away and intangible. However, the only way you will reach your goal is to stick with it and be patient with your frugal lifestyle.

Are you making some serious mistakes in paying off your debt which are holding you back from accomplishing this goal? Here are some of the mistakes that you might be making which are slowing you down when getting out of debt:

Denying Your Debt

It is one thing to be completely oblivious to your financial situation and to have no idea how much debt you are in, which can be put down to ignorance. However, it is another thing to know that you are digging yourself into a deeper and deeper hole but to refuse to admit this to yourself.

Do you avoid checking your bank balance because you know that you will not like what you see? Have you been postponing making a budget because you don’t want to add up how much debt you actually have? It might be scary to face your debt head on, but this is the only way that you will be able to fix it. Until you can be honest with yourself, you won’t get anywhere.

Living in the Moment

What if you know how much debt you are in, but you still tell yourself that you deserve a new purse, a pedicure a new car or a tropical holiday? Many people are aware that they have a lot of money to pay off but they still convince themselves that they need a break and justify spending money on luxuries.
If you have this attitude, you will be always in debt. In order to achieve financial freedom when you are in debt, you need to be able to sacrifice a few of your comforts and luxuries. You can’t have everything that you enjoy in the moment without having to pay for it later.

Not Making a Clear Goal

When you don’t make a specific goal for paying off your debt, it is easy to continue putting it off until next month. You’ll tell yourself that you will pay off your debt after your friend’s wedding, then after your partner’s birthday, then after Christmas, etc. There will always be some situation which comes along when you can justify spending a bit more money and postponing your debt payment plans.

Instead, make a clear goal of when you will pay off your debt and how much you must pay per week or month to make it happen. Place your goal somewhere that you will see it often and remind yourself every time you look at it that you are committed to your goal. Track your progress, because seeing how far you have come along can be very rewarding.

These are just a few of the common mistakes that people make when they are trying to get themselves out of debt. If you are making any of these errors, you might want to adjust your habits in order to help yourself get out of debt and pay off your loans faster. 

Sarah Fox is a writer who often includes in her blog financial advice such as helpful tips on effective budgeting, saving money and the best ways to apply for a loan.

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