12 mistakes I made while paying off debt (2024)

Paying off debt is one of the biggest financial challenges many people face on a daily basis.

Unfortunately, almost everyone makes mistakes while paying off debt. We have all been there!

Today’s post is by my friend Charissa – enjoy!

I must admit something. I was by no means a shining example oh how to best pay off debt! There were plenty of dumb and somewhat costly mistakes I made while paying off debt.

Regardless, the story ends well and I paid off $7,661 of debt while putting my hubby through school!

So, what mistakes did I make along the journey? Today I wanted to share 12 common mistakes I made during debt payoff so you can avoid them.

Related reading:

• 5 Step Plan to Live Debt Free
• How to Track Your Expenses
• Tips for a No Spend Day or Week or Month

12 mistakes I made while paying off debt

1. I did not follow a debt snowball.

A debt snowball involves taking your smallest debt and paying as much as possible until paid off, while paying minimum payments on the rest. Then, you add the first payment to the next debt.

When I got started, I jumped around and did not pay off debts in any particular order. Paying off smaller debts first would have kept my motivation high.

One helpful tool to learn more about the snowball method is Dave Ramsey’s book The Total Money Makeover.Using this method can be really motivating and inspire you to pay off debt.

Unfortunately, this is one of several mistakes I made while paying off debt.

2. I forgot to include necessary categories, like car repairs, in my budget.

Unexpected expenses pop up all the time. If you have a car, you probably already know this because maintenance and repairs can really add up.

I am always looking for ways to budget better. I like to use a planner to track all my expenses. You can use a free one like Google Calendar, or a paper planner like this one.

If you like to plan out your month using the cash method, a lot of people like to use these cash envelopes to sort out different expense categories. This is a great way to budget for monthly expenses.

When you’re paying off debt, it’s important to set aside money in your budget for unexpected yet necessary expenses. This lack of planning caused the 3rd mistake.

3. I kept charging on my credit card.

I added $1,000+ in charges before closing the card after paying everything else off. When you’re trying to pay off debt – especially credit card debt – this is a huge no-no.

You want to stop using credit card immediately so you don’t undo any progress you’ve already made.

It’s also a good idea to open a savings account and create an emergency fund.

You should consider using an accessible account like a high yield savings account.

This is a great way to earn interest on the money in your account and let it grow, all without doing anything extra like investing it or putting the money into a CD.

Every time you get paid or have extra income, try to add some money into this fund. Your future self will thank you!

4. I paid extra only on the car loan.

I had been paying more on my car loan before getting married and continued with the extra amount, but never increased the payments on other debts.

If I had been using the snowball method, I could have worked at paying this debt off faster.

5. I did not cut my lifestyle expenses much.

More mistakes I made while paying off debt were when my family and I would take trips, dine out, and buy whatever we wanted.

I fit monthly payments around lifestyle expenses instead of doing it the other way.

By doing this, I prevented myself from putting more money toward my debt in order to pay it off sooner.

Helpful Tip: Some expenses are quite necessary, so if you have to spend money regularly on something anyway, one way to earn free money is using Rakuten.

If you have to do any shopping online, you earn cash back on every purchase. I have made over $700 in the past couple of years just from shopping on this site. This is free money that is put into your PayPal account every three months!

Helpful Tip:Ibotta is another free cell phone app that can help you save so you can put more toward debt payoff.

You use it after you go grocery shopping and use your receipt. It’s basically a rebate app, so you can earn anywhere from 50 cents to $5 off everything you buy.

My favorite part about this app is that it’s not always brand specific, like a lot of coupons are. So you’ll be able to scan “any brand of bread” for 50 cents off, etc.

If you do coupon – you can STILL use Ibotta and get a rebate. For the diehard couponers out there, this will often result in getting an item for FREE. Crazy, right?

If you want to grab the Ibotta app and start making money off your grocery receipts, click here to get started. Here’s a $10 cash bonus when you scan your first item that you can deposit into your PayPal account!

6. I did not have a solid plan to attack my debt.

I tried to budget and pay off what I could, but did not detail a plan on how and when I wanted to pay everything off.

Simply put, I lacked an overall strategy.

Paying off debt can be exhausting and it helps to have a clear strategy and focus so don’t have to work so hard to figure out how you will round up your next payment and how much it will be for.

7. I never hustled to work more and bring in more income.

Even though I was stressed about money, I never wanted to work extra hours. I only started side hustling after becoming debt free. In reality, I should have side hustled to pay off my debt faster and stress less.

Helpful Tip: A side hustle can really help you make extra money and pay off debt faster. A side hustle doesn’t have to be a part time job for another employer.

Instead, a side hustle can range from taking on extra side work alongside your career or smaller, shorter tasks.

Related reading:

• How to get paid to play on Pinterest
• I started a homemade dog bakery!

8. My hubby and I did not work as a team to pay off our debt.

We were in agreement about getting out of debt; however we did not share the passion and hard work of paying everything off.

It’s best to get on the same page with your partner when you start paying off debt. Having each other’s support can be very crucial.

If you are single, try to find an accountability partner or a support group online.

9. I was spotty about budgeting.

I hated budgeting and panicked, thinking a budget showed how I failed with money so I avoided budgeting. This was one of the biggest mistakes I made while paying off debt.

As I adjusted my budget, I used a small budget journal to track all of my expenses. This really helped me see where my money was going each week.

10. I did not apply my raise as extra payment amounts on my debt.

I received a raise in our two-year battle with debt, but only increased lifestyle and paying cash for hubby’s tuition.

Paying cash for my husband’s tuition wasn’t necessarily a bad thing, but I also shouldn’t have used my pay raises as an excuse to inflate my lifestyle in other areas.

11. I was not mad at my debt.

Hatred towards debt brings a willingness to do anything necessary to pay off debt. One way to help deal with my feelings, track my progress and stay motivated was with this journal.

It’s a great way to write out financial goals, my list of bills, and crossing off debt. It also served as a great way to track my emotions about debt and how much better I felt as my debt decreased.

12. I did not have a clear picture of why I wanted to be debt free.

I only wanted to see my husband graduate with no loans. But now being debt free, I have the freedom to save for the future, give to others, and enjoy the fruits of my labor with no regrets.

Looking back, I wallowed in debt longer than I should have done.

Don’t make the same mistakes I made while paying off debt! Set a plan, use a budget, hustle, sacrifice while being furious with debt and you will be able to clean up your debts quickly.

Here are money saving tips to help you avoid the 12 mistakes I made while paying off debt

Paying off debt requires a laser-like focus, but that doesn’t mean you still can’t enjoy your life and do things affordably like travel.

If you’re on a longer debt repayment journey, you should consider taking breaks every now and then to decompress and plan a low-cost domestic vacation that won’t throw you off track from your end goal.

Tip #1: Celebrate every victory, big or small. Paying off a credit card or loan is a big achievement, but so is making an extra payment towards the principal.

Tip #2: One great way to earn extra income is to use cash back apps, especially because you can earn cash from the grocery store, big box stores and online shopping.

Tip #3:Starting a blog is one of the best ways to make extra money. I made over $13,000 in six months of blogging.

If you want to start a blog, Bluehost has the cheapest options to get started (that’s who I use).

Here’s a list of ideas to blog about and a tutorial on how to get started.

What mistakes did you make paying off debt?

Author: Charissa Quade became debt free while cash flowing her hubby’s education. She and her husband live in the beautiful Southwest desert of Arizona where Charissa uses her expertise in living debt free by following a shoestring budget to encourage others to take control of their finances. On her website, Cook With A Shoe, she shares tips on how to handle money well and takes the scary out of budgeting. Connect with Charissa on Face Book, Twitter, or Google +.