Financial success is often unachievable for those with debt; at least that’s what those people think. There’s no sugar coating the fact that debt is detrimental to your financial success, but it doesn’t make financial success unattainable. In fact, you might be surprised just how easy it is to eliminate your debt and move onto financial success. However, you can’t do that if you’re not careful to avoid these debt traps.
When you have debt, the worst thing you can do is make only the minimum payment on your cards. Now, you might have to do this for some of your cards, but if you want to eliminate debt you must make the biggest payment possible each month. If you can’t afford to do this on all your debts, at least do it on the debt with the highest interest rate. Once that debt is paid off you can roll that payment over onto another debt and keep snowballing your financial mistakes until they’re paid off.
No Emergency Fund
Whether you have an emergency fund that you use to fund emergencies such as having nothing to wear to dinner tomorrow night or major medical bills, you can’t deplete it. First and foremost, not having something to wear is not an emergency. Secondly, emergencies are things that happen to everyone and you must have a separate savings account for those items. If you don’t, you’ll end up further and further into debt before too long. If you are forced to use your emergency fund for emergency purposes, at least do so knowing that you will work hard to replace the funds you used so that there’s always more.
Not Having a Plan
If you have no plan to pay off your debt and reach financial success, it’s a guaranteed surety that it will never happen. You absolutely must have a plan of action if you’re going to pay off your debts and live debt free for the rest of your life.
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