Avoid Overburdening the Budget When Paying Off Debt
Paying off your debt will always be stressful. However, if you set up an overzealous plan to pay it off, you risk your ability to pay other expenses.
As personal finance site Three Thrifty Guys explains, it’s clear that paying off your debts as quickly as possible is a good idea. On the other hand, it’s easy to overwhelm yourself with an aggressive payment plan. If you pay so much to pay off debt that you risk paying other bills, you may hurt yourself more than you help:
At the beginning of my marriage, we had a lot of credit card debt and student loans. This was a big hindrance to our ability to do a lot of things. With good intentions, I quickly tried to pay as much as possible with our credit cards after just one month of marriage. During the second month, I had to pay the rent, and we had less rent than it was supposed to.
My wife and I tried to cash all our change and transfer pennies from savings accounts to our initial check. By the 1st of the next month, we only have $ 4.14 left after paying the rent. It was a very stressful time at the beginning of our marriage. However, only I could blame. I was not a good financial manager knowing what accounts we had left over the coming weeks. All because of my good intentions to pay off the debt.
If you’ve set up a debt repayment plan and you end up running out of money in other accounts, you may need to mitigate it. Yes, it will take you longer to pay off debt, but reducing the strain on your budget can help you stay afloat in other areas. The next time you need to pay your regular bill, it won’t be unnecessarily difficult. And hopefully the next time you have an emergency, you won’t be screwed up enough to panic.
Are your financial decisions more or less stressful? | Three thrifty guys