Things You Should Never Do to Get Out of Debt
Getting out of debt is not a simple process, but there are certain things one should never do to pay down debt.
As infuriating and stressful as debt can be, it is important to remember you are not the first or last person in this situation. Millions of Americans are struggling with debt. While of course you’re eager to alleviate your financial debt it is important to ensure you never do the following:
1. Assume it Will Just Go Away
If you’re looking to resolve your debt, you have to be proactive in making steps towards paying it off. The longer you avoid your debt the more it will be accruing interest, and if ignored altogether, it could go into collections. You have to acknowledge your debt and make it a priority to pay it off as efficiently as possible. You cannot move forward in making changes to your financial situation without getting to the root of the problem. It is important to stay positive and remember that you can make changes and get out of debt once you decide to confront it head on.
2. Avoid Asking for Assistance
Getting out of debt is not easy, which is why it is important to be willing to ask for help. Not asking for help can hinder your chances at solving your debt problem as fast as possible. You may have gotten into debt by yourself, but no one is expecting you to get out of it on your own. Asking for help can give you new perspective and allow for you to make a better repayment plan. Getting out of debt is not something simply done, and asking for help can afford you many benefits!
3. Not Making Effective Lifestyle Changes
Debt didn’t just fall into your lap. There could be numerous reasons why you’re in debt, from a job layoff or medical issues, to plain old uncontrolled spending. Try to think of the main reasons you have gotten into debt. You may have not been so financially conscious in the past, but now is the time to turn it all around. Getting out of debt isn’t easy, there will be sacrifices you will have to make along the way but it will all be worth it in the end. Start by examining your spending habits and adjusting your budget to make debt repayment a priority.
4. Rob Peter to Pay Paul
While you might feel the pressure to get yourself out of debt as fast as possible, it’s rarely a good idea to tap into your savings to pay it off. Draining your 401(k) or any other type of long-term savings fund to pay off debt doesn’t solve your problem, instead it just changes the debt’s form. Instead of owing that money to a creditor, you now owe it to yourself and while that might sound easier, you’re only generating a new type of financial strain. For example, let’s say you pull some of the money out of your 401(k) to pay off credit card debt. You’ll now have to double, maybe even triple your monthly contributions to catch up before you hit retirement age. Not only that, but you’ll have lost out on the interest you’ve earned since you started contributing.
Being aware of what NOT to do while paying down debt can really help you along in your process. Now that you know some of the things to avoid, you are better prepared to start making a better effort towards resolving your financial situation. Remember it can and will get better once you create a successful plan and stay determined! At Tayne Law Group, we’re dedicated to helping people overcome the burden of their debt. From student loans and credit cards to medical bills and personal loans, we’ve seen it all! Call us today at 631-470-8204 for a free phone consultation.