March 15th 2018 - Amanda Huinink
Being stuck in a cycle of debt can be mentally exhausting. Ensuring you have put together a solid plan to tackle your debt is a great step in the right direction. But we want to make sure you aren’t making some common mistakes that could be making your experience more difficult.
1) Continuing to spend the same way you always have. Just because you have made this great new plan to tackle your debt and consolidated all your credit cards into a monthly loan payment with a low interest rate loan, doesn’t mean that you should continue using your credit cards the same way you were before. That is exactly what got you into this financial mess in the first place. If you have put in place a new plan to tackle your debt, make sure you adjust your spending habits as well. Cut down on eating out, start bringing your own lunch & make your own coffee at home in the morning. Disconnect your credit cards from online shopping accounts and consider doing your groceries at a less expensive store like No Frills.
2) Not planning for the unexpected. It’s always a good idea to plan for the unexpected. Things like your car breaking down, having to replacing a furnace or air conditioner, a health emergency that is not covered or has high up-front costs. Things come up that we do not wish to happen and it’s important to have some money set aside to help ease the burden of those costs. The last thing you want to do after working so hard on paying off your debt is to have to ring your credit card back up again on something you hadn’t expected. Work into your budget a way to set aside a little bit of money each pay to be prepared for things that you cannot be plan for.
3) Not openly communicating with your spouse/partner. It’s great to put in place your new debt management plan, put away your credit cards and stop your unnecessary spending, but if your spouse or partner is continuing to spend the same way he or she was before, you will end up back in the same spot you started, or possibly even worse. Its very important to not only devise a plan that works for you, but also one that works best for your whole household, with everyone actively participating. Work on a plan together, talk about what things you are willing to give up, what you are willing to reduce your spending on and what things can be cut out completely.