The Biggest Debt Payoff Mistake People Make When They’re Already Stressed About Money
Money troubles have already cranked the dial on your stress levels. Your inbox and mailbox feel like nuclear test sites, and you’re bracing for the next bill to drop. As you try to repair the financial damage, you naturally prioritize paying down your debt. Unfortunately, that urgency can leave you vulnerable to a major debt payoff mistake: acting too fast without a plan.
When it comes to debt payoff, it turns out slow and steady — or at least methodical — wins the race. Moving too quickly and without a smart, structured plan can actually compound your money woes when you’re already stressed. To understand why hasty decisions are the biggest debt payoff mistake you can make, MoneyLion turned to the experts.
Acting Too Fast Means Acting Without a Plan
When you’re overwhelmed by financial obligations — especially debt — you want to get out of the hole as fast as possible. But making scattered or inconsistent payments can feel like digging out with teaspoons. It’s emotionally satisfying but rarely effective, according to Reid Zeisling, CEO of Gain Servicing.
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Zeisling is blunt: When people pay whatever feels most urgent in the moment just to feel like they’ve done something, they fail to develop a real plan for their overall financial situation.
“That often means missing opportunities to negotiate or using high-interest credit to keep accounts current, but it’s all a facade for so many,” he said.
Acting Without a Plan Can Get You Stuck in Your Emotions
Letting an adrenaline rush guide your decisions can mean operating from raw emotion instead of logic. Zeisling says when stress narrows your focus, you may skip steps that could meaningfully reduce your debt burden, such as reviewing statements carefully, disputing charges, appealing to creditors or requesting assistance.
“People also avoid opening bills or making calls. Bills stink, especially in health care,” he said. “[But it’s] totally normal for anxiety to spike, which really just delays action until options shrink. That is when expensive shortcuts start to look like the only way out.”
When You’re Stuck in Your Emotions, You Can Burn Out
It’s easy to feel frustrated when you’re quickly tossing money at debt, only for balances to barely budge. While Julien Brault, founder of MooseMoney, understands this frustration, it’s often the predictable outcome when you don’t have a plan.
“Financially, interest continues to compound, balances barely move and people stay stuck making payments for years longer than expected,” he said. “Emotionally, it creates burnout. People feel like they're doing everything right but seeing no progress, which often leads to giving up and avoiding their finances altogether.”
Developing a specific plan around your debt can help you tackle high-interest balances while tracking progress based on clear benchmarks — not just your mood. For instance, the avalanche method encourages paying off debt with the highest interest rate first, which can minimize total interest paid over time.
Conversely, the snowball method asks you to rank debts from smallest to largest balance and pay minimums on all but the smallest, which you prioritize paying off as quickly as possible. Once that debt is gone, you “snowball” its payment into the next smallest — creating momentum that keeps you hopeful, motivated and engaged.
When You’re Burned Out, You Forget Your Other Financial Needs
Getting stuck in a cycle of quick payments followed by burnout can leave you unprepared for other financial needs. Remember that emergency fund? If you’re not regularly contributing even a small amount, something like a car repair can wipe you out — leaving you in an even worse position to repay debt.
Brault says that after identifying which debts to focus on first and choosing a strategy, you need to prioritize building a basic emergency cushion.
“The first step is to take a step back and list all the debts clearly in order to choose a single target,” he said. “The next step is to build a small buffer so unexpected expenses do not derail the plan. Once progress is made on one account, stress levels drop and better decisions follow.”
The Bottom Line
When you’re already worried about money, debt is the last thing you want to face. But if anxiety gets the better of you and pushes you to act rashly, you’re making a costly mistake. Slowing down, catching your breath and making a plan is the best way to ease both your worries and your debt.
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This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal, or tax advice.
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