11 Debt Payoff Mistakes That You Need to Know

I can’t believe I paid off all my debt as fast as I did.

On paper it didn’t even seem possible.

As the sole provider on a self-employed, irregular income, plus the need to come up with thousands of dollars every 4 months for my husband’s tuition payment, I didn’t know how we’d pay all the bills on time.

And the debt.  

See my hubby and I started our marriage off with credit card debt, a car loan and student loans, right as I was entering into my slowest work period. Normal right?

And within a couple of weeks, after we came back from our honeymoon in San Diego, we ended up with $1,600 in car repairs.

Welcome to real life.

The squeeze on finances played through my head like a herd of elephants as sleep often eluded me.

20% of my income

$7,661 may not seem like a lot of debt. However, 20% of my entire annual income tied up in debt, crushed the breath right out of me. +

I watched my bank account like a hawk to pay my bills as soon as my check got deposited so I wouldn’t get hit with an overdraft fee. +

I scrambled to pick up enough jobs each week with my independent contract work. Frazzled, I spent hours combing the internet for ways to save money. +

Related: 11 Underused Ways to Reduce Household Expenses

Even back in college, when I had to make every nickel scream before it left my hands, I had never carried debt. +

Now, faced with debt everywhere I turned and the huge responsibility to make sure I earned enough money to keep the lights on, I carried a brick in my stomach. +

I wanted to see my hubby graduate debt free, which meant I had to figure out how to pay for school without taking on any more loans.+

And I had to find a way to get rid of the debt hanging over us like a dark cloud, choking my spirit. +

But there was one problem

I didn’t know what to do or how to do it. +

And the way the numbers looked on paper, I didn’t see how it would even be possible, with my $37,000 irregular income, the rising cost of tuition, and self-employed taxes. +

For a long time, I scrambled to come up with the cash for my hubby’s school so we didn’t have to borrow anymore money, but I didn’t focus my attention on paying off debt. +

I made plenty of mistakes

Many of the mistakes I made on my debt free journey came from ignorance. I didn’t know the right way to pay off debt or how it would be possible. +

But the biggest thing, I didn’t have hope it could be done, which resulted in zero motivation. +

Here are the mistakes I made while paying off debt. +

I didn’t know how

First, I didn’t follow a debt snowball, where you list your debts smallest to largest, paying minimums on everything except the smallest and attacking this one with vengeance. +

Instead, I focused on paying off the car loan balance as I had brought my car debt into our marriage and felt responsible to get rid of it as soon as I could.+

However, I know now, tackling the smallest debt first gives you quick emotional wins, like a big pat on the back to tell you, yes, you can pay off debt. You can see all the progress you’ve made and it will motivate you to continue knocking debts off one by one.  +

I wish I had known how important it is to have a clear reason why I needed to get out of debt, something to motivate me along the way. +

Take some time to dream of what you could do if you had no debt. Make this reason why visual and it will motivate you in incredible ways, while keeping you focused with laser intensity. +

Whatever your money dream of why you want to become debt free, print out a picture, stick it in the fridge and in your wallet. +

I love coloring in a picture to show how much progress I make each month, towards my savings goals. This visual tracker would have been so helpful while I was paying off my debt.+

Related: Hand drawn color pages to track your progress

We used the credit card to pay for a new catalytic converter on my husband’s car, because I forgot to include car repairs in my budget. Not the direction I wanted our debt to go. +

Now, with an older car, I’ve had to increase the amount I put aside each month for repairs. Even if I don’t use the money every month, it will go into savings, because I know at some point a repair will come up. +

My attempts at budgeting left a lot to be desired

At this time in my life, the word budget sent me into a panic.+

I thought a budget showed how I failed with money again. I’d put it off as long as possible, and when I did work on the huge mess, it took hours to resolve among bitter tears and gnashing of teeth.+

A year or so, after I got married, I found The Total Money Makeover. What a lifesaver! The book explained how to pay off debt in a simple and easy to understand way plus gave me ideas on how to budget. +

I now saw the possibility to live debt free with zero payments and that it could be a reality in my life. My mindset changed and I now wanted to get rid of all our debt as soon as I could. +

I had hope.

Related: See how I successfully structure my budget today

I struggled to keep up a lifestyle I couldn’t afford

But before this new found hope, we took two big trips across the country to visit family, instead of using the money to get out of debt even faster. +

While I enjoyed the visits, I couldn’t help but envision the stack of bills shoved into the mailbox at home.+

Any money I received as a bonus or part of a raise, we spent on lifestyle and didn’t throw it at the looming payments. +

Oh and I held onto the $2,000, which we had received from our wedding, as part security blanket or to do something fun. Isn’t that what you’re supposed to do with money gifts? +

The idea to add this chunk of money to help pay off debt didn’t even occur to me.+

However, if I had applied all of this extra money towards paying off debt, the gift to be debt free in a shorter period of time and to lose the stress with it, this would have been so worth it and a great use of our wedding money. +

I didn’t know how a simple side hustle would have helped me gain serious traction to destroy my debt. Even if I had sold things I no longer needed, every little bit would have made a difference.+

Easy way to earn extra money:  Ibotta is an app that allows you to earn cash back rewards from the grocery store and other retailers. You just scan your receipt and cash rewards is added to your account. Get a $10 bonus when you sign up here.

Related: Ways to earn money from home

Power of together

My hubby focused on school and didn’t know how to deal with an irregular income, to be honest neither did I, so I took over the finances and boy did I struggle. +

We didn’t talk much about money and never communicated about the desire to get out of debt, along with a plan on how to do so.+

If I had talked to my husband and included him on the process, it would have been much easier to manage and the stress would have been lessened. +

I know not everyone is married, and if you’re not, find someone who will walk alongside and encourage you on your debt free journey. Support like this has incredible value. +

Focused intensity

Scared and stressed, yes, but I never had an intensity of anger or hatred towards debt. I continued month after month with the bare minimum payment. +

When you include your emotions as you pay off debt - and come to a point where you say,+

‘No more! I’m done with debt and I’m going to do whatever it takes to get debt out of my life for good!’

You will make incredible progress in a short period of time. +

The power behind your words and emotions will be the catalyst to bust through the debt fast.+

You can do it!

You know what?

Even though I made mistake after mistake and on paper the numbers didn’t look like it was possible, 8 short months after reading The Total Money Makeover and 60 days shy of my second anniversary….+

….we clicked the button to submit the last student loan payment online of $89 and became debt free!+

And for the last 8 years, we have not gone back into debt even once. The sense of freedom and the peace has been indescribable.+

Such a huge weight has been lifted off my shoulders and I no longer fear money or budgets. Instead, I get excited when I talk about budgeting. +

So my friend, your story can have a happy end as well. You CAN pay off all your debt, even if you’ve made mistake after mistake, as I did. +

Your past doesn’t define your future. You can chose to do something different which will give you the result you want. +

Here’s what to do instead...+