10 Mistakes I Made While Paying Off $20,000 of Debt

Getting out of debt is a journey filled with highs and lows, and let me tell you—I made plenty of mistakes along the way. Paying off $20,000 of debt was no small feat, and while I’m proud of what I accomplished, there are so many things I wish I had done differently. If you’re on your own debt-free journey, I hope sharing my biggest mistakes will help you avoid the same pitfalls and reach financial freedom a little faster (and with a lot less stress).

1. Ignoring My Budget for Too Long

For the longest time, I thought budgets were just too restrictive. I wanted the freedom to spend without feeling guilty, so I avoided making one altogether. The problem? Without a budget, I had no clue where my money was actually going. I would get paid, cover my bills, and then the rest would just disappear. No plan, no savings, just a cycle of living paycheck to paycheck.

When I finally sat down and tracked my spending, I was shocked. I had no idea how much I was spending on little things like takeout, Amazon orders, and random Target runs. It wasn’t that I didn’t have enough money to pay off debt—it was that I wasn’t managing what I had. Once I made a budget, I realized I had more money to put toward my debt than I thought.

The best part? My budget didn’t have to be restrictive. Instead of seeing it as a set of rules, I started looking at it as a plan for my financial goals. I still gave myself spending money, but now I was in control. If you’re avoiding making a budget because it feels overwhelming, trust me—it’s one of the most powerful tools for getting out of debt.

2. Only Making Minimum Payments

For way too long, I convinced myself that making the minimum payments was enough. I figured as long as I wasn’t missing a payment, I was doing okay. But the reality was, I was barely making a dent in my debt. Those minimum payments were mostly going toward interest, meaning my actual balance wasn’t moving much at all.

It wasn’t until I did the math that I realized how much money I was throwing away. I looked at my credit card statement and saw that if I only made the minimum payments, it would take me years to pay off my balance—and I’d end up paying thousands more in interest. That was a wake-up call.

I started finding ways to put extra money toward my debt, even if it was just $50 or $100 more each month. I cut back on little things like eating out and subscription services, and that extra money went straight to my highest-interest debt. It made such a difference! The more I paid, the less interest I owed, and that motivated me to keep going.

If you’re only making the minimum payments, I totally get it—sometimes that’s all you can afford. But if you can find any extra money to throw at your debt, even small amounts, it can save you so much time and money in the long run.

3. Not Building an Emergency Fund First

When I first started paying off debt, I thought every spare dollar should go toward my balances. I mean, the faster I paid it off, the better, right? But what I didn’t realize was that without an emergency fund, I was setting myself up for failure.

Life happens. Cars break down, medical bills pop up, unexpected expenses always find a way to appear. And since I had no savings, guess what I did every time an emergency came up? I pulled out my credit card. It felt like I was stuck in a cycle—every time I made progress, something would happen, and I’d be right back where I started.

Eventually, I realized I needed a financial cushion. I started by saving just $500, then worked my way up to $1,000. Having that emergency fund gave me so much peace of mind. When my car needed new tires, I could pay for it without racking up more debt. It was a game-changer.

If I could do it all over again, I would have saved up a small emergency fund before aggressively paying off debt. It’s not about saving a ton of money—it’s about giving yourself a safety net so you don’t have to rely on credit cards every time life throws a curveball.

4. Trying to Pay Off Debt Too Aggressively

Once I finally got serious about paying off my debt, I went all in. I cut out everything “unnecessary”—no eating out, no fun purchases, no social outings that cost money. I threw every extra dollar I had toward my debt, convinced that the faster I paid it off, the better. And while I did make progress, I also completely burned myself out.

At first, I was super motivated. Seeing my balances drop felt amazing, and I thought I could keep up the intensity forever. But after a few months, I started feeling deprived. I was saying no to everything, and it felt like my life revolved around nothing but working and paying off debt. Eventually, I got so frustrated that I gave up and splurged on things I had been denying myself—undoing months of hard work.

The truth is, paying off debt is a marathon, not a sprint. You have to find a balance between being disciplined and still enjoying your life. If you go too extreme, you risk burnout and giving up completely. I learned that it’s okay to budget for fun, as long as it’s done intentionally. Instead of cutting out everything, I started allowing myself small indulgences—a coffee here and there, an affordable date night, or a little treat now and then.

Looking back, I wish I had approached my debt-free journey with more patience and flexibility. It’s okay to take a slower approach if it means you can actually stick with it long-term. Paying off debt isn’t just about numbers—it’s about creating a sustainable financial lifestyle.

5. Relying on Credit Cards for ‘Emergencies’

For years, I told myself that my credit card was my “emergency fund.” Anytime an unexpected expense popped up, I’d swipe my card and promise myself I’d pay it off quickly. But of course, that never happened. More often than not, those emergency charges just sat there, accumulating interest.

The problem was that I didn’t actually have an emergency plan. I wasn’t preparing for these expenses—I was just reacting to them when they happened. And since credit cards were so easy to use, I fell into the trap of thinking, “I’ll figure it out later.” Spoiler alert: I didn’t.

Once I realized how much extra debt I was adding by relying on my credit cards, I knew I had to change my approach. I started setting aside a little money each month for emergencies, even if it was just $20 or $50 at first. Over time, that small fund grew, and eventually, I had enough to cover most unexpected expenses without reaching for my credit card.

If you’re using credit cards as a backup plan, I totally understand—it’s easy to do. But if you can start putting even a tiny amount of money into a real emergency fund, you’ll thank yourself later. Having actual savings to fall back on is so much better than depending on debt.

6. Not Tracking My Spending

I used to think I had a pretty good idea of where my money was going. I mean, I wasn’t buying super expensive things, and I wasn’t a shopaholic—so I assumed I was being responsible. But when I finally sat down and tracked every dollar, I was shocked.

Little expenses add up fast. That $5 coffee here, the random Amazon orders, the “quick Target trip” that somehow turned into $100… it was all adding up to hundreds of dollars a month. And the worst part? I had no idea. I wasn’t intentionally wasting money, but because I wasn’t tracking it, I had no control over my spending habits.

Once I started tracking my spending, everything changed. I finally saw where my money was actually going, and it became easier to make adjustments. I didn’t have to completely cut out fun spending—I just had to be mindful of it. If I wanted to treat myself, I made sure it was within my budget instead of just swiping my card and hoping for the best.

If you’re not tracking your spending yet, I highly recommend trying it for one month. Even if you don’t change anything at first, just being aware of your habits can be eye-opening. Knowledge is power, and knowing exactly where your money goes will help you make better financial decisions.

7. Not Negotiating My Interest Rates

For the longest time, I just accepted my credit card interest rates as they were. I figured there was no way to change them, so I didn’t even try. But one day, out of curiosity, I called my credit card company and asked if they could lower my rate. To my surprise, they actually did.

It turns out, many credit card companies are willing to lower your interest rate if you have a good payment history or if you’re willing to ask. I wish I had done this so much sooner because even a small decrease in interest can make a huge difference when you’re trying to pay off debt.

Another thing I learned is that transferring balances to a 0% interest credit card can also be a great option. I eventually did this with one of my higher-interest cards, and it helped me pay off my balance faster without extra interest piling up. Of course, you have to be careful and read the fine print, but it can be a great tool if used wisely.

If you haven’t tried negotiating your interest rates yet, give it a shot. Worst case, they say no—but best case, you could save hundreds or even thousands of dollars in interest.

8. Falling for Quick-Fix Debt Solutions

When I was feeling overwhelmed by my debt, I started looking for “easy” solutions—and let me tell you, there are a lot of predatory companies out there promising quick fixes. I was tempted by debt consolidation companies, balance transfers with hidden fees, and even sketchy “debt relief” programs that promised to wipe out my debt entirely (spoiler: they didn’t).

One of my biggest mistakes was jumping into a balance transfer offer without fully understanding it. The 0% interest rate sounded amazing, but I didn’t realize there was a hefty transfer fee attached. On top of that, the 0% rate expired after a certain time, and the new interest rate was even higher than my original credit card. Because I didn’t read the fine print, I ended up paying more than I would have if I had just focused on making extra payments on my existing debt.

I also almost signed up for a debt consolidation loan, thinking it would magically fix my financial problems. Luckily, I did some research before committing, and I realized that while consolidation can be helpful for some people, it doesn’t actually erase your debt—it just moves it around. Plus, many of these loans come with fees and high interest rates if you’re not careful.

The truth is, there’s no shortcut to paying off debt. If something sounds too good to be true, it probably is. I wasted so much time looking for “hacks” when I should have just been focusing on consistent, smart money habits.

9. Not Adjusting My Lifestyle Enough

At first, I thought I could pay off my debt without really changing my spending habits. I told myself I just needed to be more “mindful,” but I didn’t actually cut out any unnecessary expenses. I kept dining out, shopping when I was stressed, and treating myself “just this once” way too often. Unsurprisingly, my progress was painfully slow.

It wasn’t until I got really honest with myself that I started to see real results. I downsized my lifestyle—I canceled unnecessary subscriptions, cooked at home more, and stopped justifying impulse purchases. I even switched to a cheaper phone plan and cut my grocery bill by shopping smarter. Little changes like that added up fast.

The key was finding ways to cut back without feeling miserable. Instead of quitting coffee altogether, I made it at home. Instead of saying no to every social event, I suggested cheaper alternatives like picnics or game nights. Once I found a sustainable way to live more frugally, everything felt easier, and my debt payoff finally picked up speed.

If you’re struggling to make progress, take a real look at your lifestyle. I promise there are places where you can cut back without sacrificing happiness. Once I shifted my mindset from “I’m giving up things” to “I’m gaining financial freedom,” it became so much easier to stay motivated.

10. Giving Up Too Easily and Starting Over

Debt payoff isn’t linear. Some months, I made huge progress. Other months, unexpected expenses set me back. And sometimes, I just felt exhausted and gave up completely—only to start over a few months later. The stop-and-start cycle cost me so much time and money.

There were moments when I got discouraged and thought, “What’s the point?” I made a big payment, then an emergency drained my savings, and I felt like I was back to square one. I convinced myself that I’d never get out of debt, so I might as well enjoy my money now. That mindset led me to splurging on things I didn’t need and undoing my progress.

The biggest shift for me was realizing that progress isn’t about perfection—it’s about consistency. It’s okay to have setbacks. It’s okay to take a break if you need to. What matters is that you keep going. Once I let go of the all-or-nothing mentality and focused on making small, steady improvements, everything changed.

If you’re feeling discouraged, please don’t quit. Even slow progress is progress. Every extra dollar you put toward your debt gets you one step closer to financial freedom. And trust me—when you finally make that last payment, it’s worth every struggle.

Paying off $20,000 of debt wasn’t easy, but it taught me some of the most valuable lessons of my life. Every mistake I made along the way helped me grow—not just financially, but emotionally, too. I learned that debt isn’t just about numbers on a statement; it’s about habits, mindset, and the way we approach money in our daily lives.

If I could go back and do it again, I wouldn’t strive for perfection—I’d strive for consistency. I’d remind myself that progress isn’t always fast, but as long as I kept moving forward, I was winning. The little sacrifices, the mindset shifts, and the moments of self-discipline all added up in ways I never expected. And now, on the other side of it, I can say with certainty that it was worth it.

If you’re working on paying off debt, don’t be too hard on yourself. There will be setbacks, unexpected expenses, and moments when you feel like giving up. But keep going. Your future self will thank you for every step you take today.

Financial freedom isn’t just about being debt-free—it’s about having control over your money and, more importantly, your life. No matter where you are in your journey, know that you have the power to change your financial future. You got this! 💕

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