12 Mistakes I Made While Paying Off Debt

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!

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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:

Here were plenty of dumb mistakes I made while paying off debt. Regardless, the story ends well and I paid off $7,661 in total debt while putting my hubby through school!

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:

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.

Your Free Guide: Start a Blog Today!

Learn how I went from $0 to 6-figures in 1 year!

Get my best tips delivered to your inbox in bite-size, easy to follow steps over the next 7 days!

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 +.

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  1. This is an excellent read, I loved your transparency so thank you for sharing. I like that you said you didn’t side hustle because I didnt either but to be honest I think it helped me as it gave me more time to focus on budgeting. I loved reading these though, and found myself nodding along to one too many of them!

  2. Redburgandy73 says:

    Great article! I am lucky to have paid off my debt and now struggling to stay debt free… There’s not a lot of articles on the web of once your debt free and staying that way….Not a lot of support to be found… I am a person that does not have any social media so that makes it harder….

  3. Thanks for your sharing!It helps me a lot!!!
    Absolutely love it and i am expecting more from you.

  4. I was in the process of depression due to my husband’s debt. He was always in the casino and in just a night he has a 100k debt. I don’t know what to do about it on how to pay for it. I tried a lot to save and earn money. Even my savings in the past can’t pay for it. I might follow some of the lists on the article maybe it may help.

    1. Kristin Larsen says:

      Thanks for sharing your story, I will be thinking about you!

  5. Diane taber says:

    We are just starting to budgeting and are trying so hard.as we’ve just been managing on one wage and I’ve been looking for work and have not been able to find work.for ages as I find this to be a real pain when there’s people quite willing to work.and won’t take the time to either interview or even when they have all is they do is not even write to you and tell you that you didn’t get the job.as where’s the harm in giving you a letter.to say that you haven’t been selected. From the interview.as I find it really bad manners of them to do this.as it’s very bad of companies to do this to a person. Really is in bad taste.and I think well very badly done.when they do it.as I’ve been going everywhere for work so I can join the work force and help my husband to pay for all our debts and pay the bills.and get current with everything.as that’s what most of the Fiancial advisors say and are saying to do. So this is why I’m searching for work and won’t give up till I get something.and get back in work.

  6. I love how honest you are in this article Kristin! I definitely understand increasing expenses when getting a pay rise and being spotty in budgeting. When I got my pay rise last year, I took that as a sign that I could spend a little bit more each week on things I wanted (and not needed), while being super lazy with updating my budget and being strict on myself. Needless to say, I should’ve been putting that extra money towards my future bills (such as my car insurance, service, and registration costs – which I always forget to save up for).

    1. Kristin Larsen says:

      It’s so easy to increase spending due to a raise! I think in some instances it’s totally necessary (sometimes I felt like I went months foregoing things because I needed to) but there’s definitely a balance to figuring things out!

  7. I will suggest this for those of you with college loans. 1 Income Based Repayment- Loo on your computer . This may be a good idea for those o you that are married with smal children and both have loans. I believe that Clark Howard ( a radio person that deals with debt and finances) spoke about this. This may be good if your salary is low and your college debt is high. Make sure if you qualify( you may get a lower interest rate, some debt may be canceled completely9 that you r able to deal with an increase of taxes.2. See if you’re able to get your employer to pay part of your loan- Years ago hospitals did this for new nurses, schools did this for teachers in districts that were in need of new teachers. Spend some time on the computer to see what might be available. be careful of scams.

  8. This was a good read. I’ve been working towards debt free for a year now. In 6 weeks I will have paid off 9K in credit card debt (truck repair transferred to a 12 month interest free card) and will have my husbands car paid off in April 2017 (12K balance and 3 years ahead of schedule). We have one debt left after that, a luxury RV that we will pay off in August 2019…13 YEARS ahead of schedule. We are not extravagant people. We own a small modest home (2/2) in a very small town out in the country. We chose this house because it was a fixer-upper so it didn’t cost much and the taxes were cheap. We are blue colored workers so we don’t make very much compared to larger cities but we still manage to live well below our means. I’ve been researching the quickest ways to become debt free but I’ve not come across a list of what not to do. This is brilliant. Thanks!

    1. I am so impressed Vix! This is awesome. I LOVE that you have a luxury RV – that is a goal someday. Congrats on becoming debt free, you are crushing it!

  9. Comment by: Stephen Walker

    You should always seek to reduce the term of any repayments to minimise interest charges.

    Using credit cards is always the short cut to bankruptcy.

  10. Love all this super useful insight! I’m currently working on paying down some major debts I accumulated while jobless and these are so great! 😀 Thanks for sharing your struggles and victories.

    Lauren Jade

    1. Thanks Lauren! Good luck!

  11. There’s a line between “every penny at debt” and “not living in the meantime.” Definitely you have to live within reduced/little means to pay it off, but it will help your sanity to have a small amount of “fun” money. Otherwise, you can get a “why bother, I’m miserable and broke, might as well be happy and broke.” If you have a small amount for something you really enjoy (even if it’s the equivalent of a Happy Meal every other month) it gives you something to look forward to besides more being broke.

    1. Agreed! You have to have some flexibility!

  12. Holly C Anderson says:

    I was debt free forever- had a good paying job as a bartender early in life. I got out and started a construction company in the building boom doing high end remodling. I didn’t get out in time though and went through all my company’s savings. I went back to school trying to find a career in computer science before getting sick and not even finishing my bachelors. Now I can’t work and have a ton of student debt. Medical bills are killing me. Oh well, it happens. My husband and I do own our home outright though because we downsized and we don’t have a car payment….

    1. Holly – so many of my friends were hit hard during the recession and were in the design/construction field, including myself and my boyfriend. My boyfriend at the time and I both lost our jobs at the same time and it took a long time to recover. I wouldn’t wish that stress on anyone. I can completely relate to what you went through!

  13. How would you form a budget for a variable income?

  14. Thanks so much for this! I’m receiving my bonus and tax return checks any day now. I’m trying to use them as best as possible. I’m just terrible at budgeting. I just don’t want any debt and I never want to be in this position again. It’s so hard. This is so inspiring tho!

    Mel | http://www.thegossipdarling.com

  15. Thank you soooo much for this! I’m receiving my bonus and tax return checks any day know and I’m trying to determine how best to use it. I have major credit card debt and I want them gone! The problem is…I’m terrible at budgeting and don’t want to be in this mess again. This post is super helpful tho! I’m trying to limit my mistakes 🙂

    Mel | http://www.thegossipdarling.com

  16. One additional comment to your snowball plan is, when making out a list of credit card balance, be sure to put the credit cards with the HIGHEST INTEREST at the top of the list.

    1. That’s a GREAT tip! Interest can add up so fast!

  17. It seems I’m making basically all of these mistakes. Especially number one. I’ve been focusing on one of our debts with the highest monthly interest charge. So I should be focusing on the smallest debt just to get it gone? We definitely need to get a bit more serious and organized about our debt RIGHT AWAY.

    1. Venassa, it possibly depends on your mindset. If you need motivation, then maybe paying off small debts is better to give you a sense of achievement and keep you going, which is Dave Ramsay’s position. However, if you don’t need that, then stick with what you’re doing, which is the best way to debt snowball – pay off the debts with the highest interest first. It’s not much help to pay off $100 at 8% if you’ve got $1000 at 30% still outstanding. This is the tactic recommended on the UK website Moneysavingexpert – it’s more efficient and faster, if you can stick to it. Where possible, consolidate debts to (unsecured!) loans with lower interest rates as well, and even take advantage of 0% credit card deals, but only if you’re certain you can pay them off in time. Also, keep an eye on those interest rates – sometimes banks will see minimum payments as a sign that the customer’ s in trouble, so they’ll increase the rate (crazy, huh?).

  18. How did you correct #8, getting your hubby on board also? We will do great for a few months and then it becomes an issue between us. He would either live for today instead of paying off debt with saved money.

  19. Since January , I have had a gazelle like focus to pay off our debt, I am babysitting my grandloves and trying to find a second job to work so I can throw extra money to the debt we currently have. We are 56 and I have applied at other jobs, at least 10! Haven’t heard back from anyone, I guess my age is working against me. Do you have any suggestions that would help me be able to pay off debt quicker. We owe approximately 55,000. We have paid off about 5,000 so far.

    1. Hi Jan! Congrats on starting to crush you debt. I think finding an extra job is hard at any age. Have you thought about house sitting or pet sitting? Companies like Rover are great for this! If you have computer skills, you might want to consider becoming a Virtual Assisant online. If you craft, places like Etsy are great as well. Good luck!!

  20. Just found this article on Pinterest – good stuff!

    Paying debts off in order has been hard for me. I’ve paid off some debts that I was making monthly payments on instead of dealing with some medical bills that were on the fringe and I was not making payments on.

    My goal this year is to deal with those fringe debts and do the snowball right!

    Thanks for the encouragement and best to you!

  21. Just found this article on Pinterest – good stuff!
    Paying debts off in order has been hard for me. I’ve paid off some debts that I was making monthly payments on instead of dealing with some medical bills that were on the fringe and I was not making payments on.

    My goal this year is to deal with those fringe debts and do the snowball right!

    Best to you!

  22. I learned that if you have bad debt in collections and hitting your credit score badly, you can not only negotiate a settlement with the company, but also a date that they will remove the account from your credit report. And get all settlements in writing before paying anything.

    1. That’s a GREAT tip Sara. Thanks for sharing this!

  23. This is a great post! It’s true that paying one thing off at a time will make you feel like you’re accomplishing more. I also think extra income is a great way to make it happen if you have time. I feel like I’m working 2 jobs between the blog/freelancing and my day job but all the extra income I’m making should go towards that.

    1. Dia, I can totally relate with the the day job and blogging! Especially since it took me MONTHS to earn any money from blogging 🙂

  24. This is great. My husband and I are beginning this journey and I found this post to be super helpful!!! Thanks for sharing.

    1. Charissa’s first point references Dave Ramsey’s book “Total Money Makeover” – he also has a class called “Financial Peace University” that is taught online or at many local churches. I’d advise you to look into it if you need motivation. It’s amazing how much you can save once you know where your money is going. Best of luck to you and your husband!

      1. Hey Jamie! I’ve heard amazing things about this course and have thought about signing up. Now that I’m here in Nashville – where his company is based – I bet this class is available. Thanks for reminding me to look into this!

  25. My biggest budgeting mistakes were:

    a) getting BACK into debt after climbing out of it

    b) not getting started paying it back sooner the second time around

    Working hard on getting debt free NOW and STAYING debt free in the future!

    1. It’s so easy to get back into debt once you are in the clear, I totally understand that!

    2. It sounds like you have had it with debt and won’t go back again, Marla. The longer I am out of debt, the less I want things which would cause me to go back into debt. Keep up the good work!

  26. Those are all good tips to pass along to people paying down debt. I had this issue back in the early 2000’s, but luckily I had kind of a plan that actually worked. Regarding your #1, what I did instead was put more money towards paying off the cards with the highest interest rate first, no matter what the open balance was. Luckily, I hadn’t been using the cards with the highest rates as much in my attempt to save on fees, so they got paid off pretty quickly. But the feeling one gets after paying off a card… wow! 🙂

    1. Hi Mitch, congrats on paying off your debt. It really is an amazing feeling!

  27. Congratulations Charissa on posting here! Living debt free is quite the feeling of freedom and worth every effort made in order to make it happen. I remember my parents drilling into my head to not buy anything unless I could afford it with cash. Of course, I grew up in a time when there were no credit cards and, thankfully we never got into debt too deep. By the time credit cards came into our lives, we kind of had it figured out. Not to say there haven’t been oh so lean years because there were. But, living within your means allows you to tap into your creativeness sometimes in order to figure out how to get that thing you want. Often, in that journey you come to find that you really didn’t want it that badly after all…and that is a good thing.

    Nice job on sharing from your life experience. I love your transparency…

    1. Thank you for stopping by Linda!

    2. Thank you Linda! Becoming (and staying) debt free was one of the best things I have done in my life and I love not having any payments whatsoever.
      It sounds like you have very wise parents and the mindset of not buying anything until you have the cash to pay for it is so valuable. I agree about creativity coming into play to have enough to pay for a certain item. Currently I am on a kick to sell the things I am cleaning out of my house on Craigslist as a way to bring in some extra money (plus getting rid of things I don’t need!).

  28. Holly Craw says:

    I love hearing about people developing great strategies for getting out of debt! I am convinced that college loans are some of the hardest to pay down, especially when the low interest and the longer payback time seem so innocuous.

    I recently learned that working for a non-profit or government agency for 10 years while making your regular monthly payments gives you the option to have the remainder of the school debt forgiven. That is one way to not have the debt looming over your head if you haven’t been able to bring it down to a manageable size.

    1. You have a great point, Holly, about working somewhere that has a loan pay back program as a great way to get rid of student loan debt. Plus you will get experience and be able to earn an income along the way.

      I have known some Physician Assistants who only had to work in a rural setting for 3 years before getting their loans paid for, so I think it would vary based on your degree and where you work.

      Thank you for commenting!

  29. I can see several mistakes you listed in our own way of living and attempting to pay off debt. Especially number 10 and 11! I have a sneaky suspicion that number 11 is uber important in getting things accomplished.

    Thanks for sharing your list!

    1. Tennille, I would agree with your ‘sneaky suspicion’ that getting mad at your debt is very important. When you become so frustrated about something and it makes you mad, suddenly there is an overwhelming desire to get that problem out of your life for good and you are willing to make sacrifices so that the debt/problem can leave your life as quickly as possible.

      However, hopefully you realized from this list that it is possible to clean up your debt while making mistakes, it just takes longer. Keep working on paying off your debt, and let me know when you finish!

  30. Well we certainly aren’t done paying off debt and are actually taking out some additional loans for our masters degrees, but I think one thing that people should do is focus on interest rates. We have some private loans from our undergrad and the loan is at a pretty high percentage (in the 6-7% range). Because we both are going to grad school slowly, we qualify for more federal loans than we need. Well, if we weren’t thinking straight we’d just pay back the amount we don’t need. In reality we are benefiting greatly from NOT paying back those loans and instead utilizing them (they are around 3%) to get rid of any loans we have at a higher interest rate. It will literally save thousands over time and allow us to pursue investing goals.

    1. DC, how nice that you are able to start paying down on the larger interest loans and able to save money from not paying so much in interest.

      I have found paying off debt is more about changing personal behaviors rather than the math. If it was all about the math, none of us would acquire the debt in the first place. When someone is laser focused on cleaning up their debt in a short time and willing to sacrifice to do so, the interest amount becomes almost irrelevant by the time the debt is paid off. Thanks for sharing your example.

  31. Great, albeit tough, lessons learned. Hopefully some other folks can learn from what you’ve shared here.
    I wouldn’t worry too much about the debt snowball one, though. There are many other, better, ways to pay off debt!

    1. If one person could learn from my mistakes and not do the same thing, then the mistakes will be worth it. I agree that there are a lot of successful ways to pay off debt. However, I have seen how a debt snowball really works with motivation to continue paying off debt, victories along the way, and a change in attitude towards debt which is why I like it so much. Thanks!

  32. I love your transparency here. I fight the whole budget thing as well, and have always viewed it as a very in-your-face way to showcase failures. Thanks for a better perspective!

    1. Amy, you are welcome. I had to find my ‘Why’ for budgeting before it became much easier, and envision what my life could look like without payments and what I wanted to accomplish in life. I then realized that a budget could be used as a tool to obtain those goals. Thanks for your comment!

  33. Thank you Andrea. That is great that you only have student loans left! Keep working on them and you will pay them off! Maybe you can avoid making ALL of the same mistakes that I made. Let me know when you have paid them off!

    Chonce- You are so right about the mindset struggle, especially with student loans being a ‘good debt’! I am much more passionate about being debt free now than when I was paying off debt. I think you are totally awesome with wanting to pay off your debt early and ignoring the people who people who think it can’t be done. I would love to hear when you make the last payment.

  34. This is a good list of things to avoid doing as you strive to pay down debt. I know for me, it was a mindset struggle. My student loan repayment term is 10 years and when I brought up the idea of paying it off early everyone around me seemed confused and told me I had plenty of time to pay off my debt. But if I would have listened to them I would be stuck paying off a ton of extra and avoidable interest so I think it’s important to act with urgency when you want to pay off debt and make it a priority because the quicker you pay it off, the better!

  35. Great post, Charissa! I am still on the journey to being debt free (only student loans remain!) and have made some of the same mistakes. It’s encouraging to know that, while you might have prolonged the process, you still reached your goal. 🙂

  36. Kristin, Thank you for allowing me to share this post with you and your readers!!

    1. Thanks Charissa for a great post!

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