Paying off debt is always going to be a stressful affair. If you set up an overzealous plan to pay it off, though, you could risk your ability to pay off other expenses.
Photo by Firesam.
As personal finance site Three Thrifty Guys explains, it’s obviously a good idea to pay off debt as fast as possible. On the other hand, it’s easy to over burden yourself with an aggressive pay off plan. If you’re paying so much towards your debt that you risk your other bill payments, you can hurt yourself more than you’re helping:
Early on in my marriage we had a lot of credit card debt and student loan debt. It was a big inhibitor in our ability to do a lot of things. In a good nature attempt I quickly tried to pay as much as we could possibly towards our credit cards after just one month of marriage. Come month two I had to pay our rent, and we had less than our due rent.
My wife and I scrambled to cash in all of our change and move pennies around from savings accounts to our primary checking. By the 1st of the coming month we had just $US4.14 ($5) left after we paid our rent. This was a super stressful time early in our marriage. However, I could only be the one to blame. I wasn’t a good financial steward in knowing what bills we had left in the coming weeks. All brought on by my good intentions to pay off debt.
If you set up a plan to pay down debt and you end up running out of money for other bills, you might need to tone it down. Yes, you’ll take longer to pay off debt, but reducing the stress on your budget can help you stay afloat in other areas. The next time you need to pay a regular bill, it won’t be unnecessarily hard. And the next time you have an emergency, hopefully you won’t be so screwed you need to panic.
Are Your Financial Decisions Creating More or Less Stress? [Three Thrifty Guys]
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