When one makes a decision to get out of debt, rarely is the road traveled smoothly. As we see from the many success stories Deacon has featured, a debt payoff journey nearly always comes with setbacks along the way. So what is the best way to deal with those setbacks? Here are some tips.
Dealing With Setbacks in Your Debt Payoff Journey
Setbacks can come in a number of ways when trying to pay off debt. There are unexpected expenses that pop up, a reduction in income due to job changes, a simple tumble off the wagon of frugal living, or a myriad of other reasons as to why your debt payoff journey can get off course. No matter what your setback, there are ways to help get back on track and get back to the business of working to be debt free. The important part when dealing with setbacks in your journey is that you deal with them and don’t let those setbacks get the best of you, or cause you to give up on your goal of reaching debt freedom.
Perspective is Vital
When experiencing a setback on your debt payoff journey, it’s important to keep a logical perspective and to remember that this is a normal part of getting out of debt. So if and when a setback occurs, brush yourself off, pick yourself up, solve the problem and move forward. Don’t allow doubt and discouragement to tempt you to give up on your journey of being debt free. Instead, use those setbacks to show your money who’s boss, and work even harder to overcome the setbacks and move forward toward reaching your goals. Keeping a positive and big-picture perspective as you work to get out of debt will go a long way in ensuring that make it to the finish line of debt free.
The Importance of a Plan
When it comes to dealing with setbacks, having a plan in place beforehand is of the utmost importance. If you’re working to reach debt freedom without a specific plan and specific goals in place, it’ll be much more difficult to deal with any setbacks that might come your way. However, with a specific plan in place (i.e. I’m going to pay “this much” extra toward debt each month, by cutting “these” expenses so that I reach my debt free goal date of _________ on time) your chances of keeping on track, in spite of potential setbacks, increases exponentially.
The Value of an Emergency Fund
It’s a vital step as one works to pay off debt to have an emergency fund in place, even if it’s a small one, to help avoid getting off track when a setback to paying off debt occurs. Even a smaller emergency fund of $500 or $1,000 will ensure that you have some cash on hand to cover unexpected expenses or repairs that have the potential to derail your debt payoff journey. Before you begin aggressively paying off your debt, make sure you have a little cash set aside to cover any financial roadblocks that may come your way.
As we learn from reading the debt success stories on this blog, nearly every journey to debt freedom has its setbacks. However, it’s not the setbacks themselves that pull you away from debt freedom, but how you deal with those setbacks that makes the difference between success and failure on the road to debt free.
What setbacks have you had as you work to reach the goals you set? What’s your best tip for dealing with setbacks?
Refinance Your Student Loans or Credit Card Debt
With the average credit card interest rate around 15%, this could save you a ton of money over the long haul. SoFi will refinance your credit card debt to as low as 5.99% so that you can pay your debt off even faster. Use this link to get $100 cash back if you get approved. They also refinance student loans to as low as 2.355% APR.
Have a Lower Credit Score?
Check out Credible instead as they are able to help people refinance to a lower rate that don’t have great credit.