Remember These Four Things When Paying Off Debt


If your credit score and debt are out of control, it can feel like your situation will never improve. It’s hard to see the light at the end of the tunnel when creditors blow up your phone every five minutes. It’s a scary situation, but it’s important to believe in your ability to get rid of debt.

Just about everyone has their own credit story. If you confide in a trusted friend or read personal finance experiences online, you’ll see that your situation is actually pretty common. This isn’t meant to downplay the seriousness of your situation, but rather offer hope and encouragement. If you need an example of a success story, go online and check out Vicki’s credit story on

In her testimonial video, she talks about how her financial world was flipped upside down after her husband came down with a serious illness. He was unable to provide for the family; and although Vicki found work, it wasn’t enough to keep up with bills and medical expenses.

It doesn’t matter how responsible you are with money today, it only takes one job loss or medical emergency to ruin your finances. Digging yourself out of a hole requires a positive attitude and optimism. It’s not the best situation to be in, but it’s certainly not the worst.

If you can remember the following four tips, recovering from a financial disaster and improving your financial outlook will be a lot easier.


1. You’re doing better than a lot of people

If you have zero cash in savings and you’ve maxed out your credit cards, you might beat yourself up and wonder how you managed to get yourself in this situation. But even if you’ve made careless mistakes in the past with your money and credit, the fact that you recognize your mistakes and you’re taking steps to improve your situation proves you’re doing better than a lot of people.

Some people never take steps to recover from financial ruin. Instead, they make excuses for their behavior or accept a life of living paycheck-to-paycheck and being behind on their bills. There is, however, a better way. If you’re sick and tired of worrying about money, and if you’re tired of creditors calling your house, cell phone, or work around the clock, now’s the time to take action. Credit matters, and getting proactive about your money and fixing your credit brings peace of mind and a sense of accomplishment.


2. It’s a valuable learning experience

Life is about trial and error. We make mistakes and we learn from our mistakes. Although too much debt and a low credit score wasn’t the plan for your life, you can’t erase the past or rewind the hands of time. What you can do is recognize where you went wrong and resolve to make better decisions.

Not only can you learn from your mistakes, you can use your personal experience to teach your children good money and credit management at a young age so they don’t go down the same path. And with your newfound knowledge, you can educate or offer advice to friends and family to help them make smarter choices in their financial life.


3. Realize that setbacks might happen

On your journey toward a debt-free life and a better credit score, everything won’t go perfectly. Sometimes, you’ll be caught between a rock and a hard place. Your debt reduction efforts might be going well, but then you face an unexpected expense. This can be as simple as a car or home repair. If you don’t have enough cash, using a credit card might be the only alternative. This can be discouraging and feel as if you’re taking one step forward and two steps backwards. Just know that setbacks are going to happen. The best thing you can do is continue on your path toward recovery and don’t let setbacks discourage you.


4. You have to sacrifice something

Most people get themselves into credit and debt trouble because they live above their means and spend cash they don’t have. If you want to erase your debt and improve your credit score, it goes without saying that you have to sacrifice something.

Adjusting your lifestyle isn’t easy, but imagine how much you can save by entertaining yourself at home, cooking your meals at home, shopping less and downsizing to a smaller house in order to make ends meet.

Debt is a pain in the neck and it can keep you awake at night. Recovery won’t be easy, but any sacrifice you make will be well worth the effort. Getting rid of debt and improving your credit score helps you qualify for car loans, mortgages, etc. And without debt hanging over your head, you will have more disposable cash to build your emergency savings account for future unforeseen hits.


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