• Skip to main content
  • Skip to primary sidebar

One More Million

Early Retirement, Financial Independence, Passive Income, Blogging Tips

  • Home
  • Passive Income
  • Financial freedom
  • Recommended Products
  • About Jay Sharma
You are here: Home / Save Money / Debt Free / Paying Off Debt – 7 Unexpected habits leading you to Debt Hell

Last Modified: January 4, 2020 Jay Sharma Leave a Comment

Paying Off Debt – 7 Unexpected habits leading you to Debt Hell

Paying off debt isn’t easy and if you are wondering why your debt just keeps increasing even though you are trying to pay it down hard. You have fallen into the debt hell and probably because of some bad financial habits. Once you get into debt hell it is really hard to come out of it.

paying off debt

7 Bad Financial Habits – preventing you from paying off debt

  1. Spending more money than you earn: This simply means you are making less money than what you are spending. This is one of the biggest reasons preventing you from paying off debt. There are only two ways to get out of this – Either reduce your expenses to fit in your income or increase your income to cover your expenses. Everyone wants to increase their income but it generally is more difficult than reducing your expenses. Track every single expense of yours and identify the things that can go.
  2. Spending money that you don’t’ have: I have come across so many people who take up big mortgages and auto loans in the anticipation of that promotion, big bonus check, inheritance. Don’t do it till you actually have the money that you are trying to spend. Simple rule if you can touch the money that you are paying it’s not yours.
  3. Not paying off the credit card(s) in full every month: Credit card fees and interests (vary from 14-36% or higher) are astronomically high and can rack up really fast. At times you might be tempted to only make the minimum payment but keep in mind that banks will charge interest over interest as well and your bill will keep going month after month. Best advice – make the credit card payments in full every month so you don’t incur fees or interest charges and still can collect those miles and reward points. If you are someone who has trouble making the full payment every month I think you are prone to error #1 or #1 or both. You should stop using the credit card right now and start paying cash.
  4. Carrying too much balance on high-interest credit cards: If you are like the majority you probably have some balance on your credit card, pay it as fast as you can and stop using credit cards today.
  5. Paying debts without thinking of the right order: Many people don’t realize that there is a right order to pay your debts. The rule is pretty simple – pay the highest interest debt first. So before you start thinking of paying off your student loans or mortgages pay off that balance on the credit card doesn’t matter how big or small it is.
  6. Failure to pay yourself first: I bet you have said or heard someone say I am trying to save money but I just can’t. Nothing is left at the end of the month. This is the wrong approach to saving money. The right way is to start paying off debt first, then pay yourself, spend what is remaining.
  7. Not checking your credit reports regularly: This might not sound like a bad habit but not knowing your credit can cost you a fortune when you apply for that mortgage or auto loan.

I hope this list of bad habits is helpful and will help you get back on the right path to financial freedom and becoming debt-free. I strongly believe paying off your debt is the first step towards FIRE but mind you all debt isn’t bad. Having good debt can accelerate your journey to FIRE and achieve financial freedom. If you are interested you can also read the book – How to be Debt Free

If you have any other habit that you would like to add to the list please share it in comments.

Related Articles

Tweet
Share
Share
Pin
Share
0 Shares

Written by Jay Sharma · Categorized: Debt Free

Disclosure: I have partnered with several merchants including Amazon and some of the links are referral links for which I may get a referral fee . Opinions, reviews, analyses & recommendations are mine alone, and have not been reviewed, endorsed or approved by any of these merchants. You can read my full disclosure policy

About Jay Sharma

Jay is a tech geek turned into a marketing ninja and entrepreneur and is keenly passionate about educating people about financial independence and how to run a successful online business.

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Primary Sidebar

About the Author

Hello, my name is Jay Sharma. I am a Personal Finance Enthusiast, Blogger, and Entrepreneur.

I will show you how you can save money and earn extra moneyby investing in dividend stocks, starting a money making blog, rental income, or an online business.

I love educating people about financial independence and how to run a successful online business. I am willing to share my experiences with my readers via this blog. Just bear in mind you need more than one way to make extra money to reach financial freedom and early retirement.

Read More ...

Get my newsletter

We help creative entrepreneurs build their financial freedom by focusing on 4 key elements of a successful journey — earn, save, invest and repeat.

Follow us on Social Media

Best Financial Freedom Resources

  • List of Recommended FIRE Books here
  • Manage your cashflows using free tools like Personal Capital or Mint
  • Learn How to Start your Blog

Popular Posts

How to Start a Blog That Makes Money – Start to Finish (Updated)?How to Start a Blog That Makes Money – Start to Finish (Updated)?
How to Setup Author Tracking in WordPressHow to Setup Author Tracking in WordPress
Passive Income Streams – What, Why and HowPassive Income Streams – What, Why and How

Latest Posts

  • Don’t Bust Your Budget – Best Ways to Save Money on Groceries
  • How Much Money Do I Need to Retire in India
  • 31 Best Side Hustle Ideas to Make Money ($1000+) – Easy Side Income Guide
  • 7 Best Financial Decisions So Far
  • Don’t Cut Your Credit Card Before You Read This
Early Retirement, Financial Independence, Passive Income, Blogging Tips
  • Privacy Policy
  • Affiliate Disclosure Policy
  • Terms and Conditions
  • Contact Jay Sharma