Credit card fees and the interest that comes with them can actually cost American years of their lives. Not only that but paying only the minimum monthly payment, which only causes more trouble as time goes on and even trying to keep track of everything that you owe is also costing you more than you know. 

The problem is that there’s no short-term solution to debt. Most people find themselves struggling for years and years trying to get out of debt in any way they can, but it’s just not that easy because there are some very big problems that we’re all facing. 

Maxed Out Credit Cards and Minimum Payments

Do you find yourself maxing out your credit cards? This can be a huge problem for anyone, because it makes it extremely difficult to ever pay off your balance. Also, if you ever have a big emergency you don’t have any way that you can pay for it because your cards have no more available room.

Next on the list of problems with this, you’re decreasing your credit rating. That’s because as you max out your cards your credit utilization is going to increase and you’re going to end up with a lower credit score. And we’re not done yet.

Making only the minimum payment means that you’re going to be paying on that card for years. That’s because the minimum payment is designed to keep you paying interest for as long as possible. The longer you pay on that debt the more the credit card company is making off of you and that’s definitely not doing you any favors.

Not Knowing What You’re Getting into

Far too many people find themselves struggling with debt because they really don’t know what they’re doing. Sure, you think you know how you’re spending your money and you think you’re doing a good job at it, but what you’re really doing is making some bad decisions to spend excessively on credit cards or to take out loans that charge exorbitant amounts of interest. And you probably don’t know how to get out of that debt.

The snowball method is one option when you find yourself in debt. With this method, you start paying as much money as you possibly can toward the debt with the smallest balance. Then, when you pay it off, you’re going to be able to transfer all of that money toward the next smallest balance. Keep in mind that you’re going to have to pay at least the minimum on all of your other debts at the same time or you’ll end up in even bigger trouble down the road. 

The avalanche approach is one that actually works in a similar way but instead of looking for the smallest balance to start with you’re going to start with the highest interest rate. Overall, this one is going to save you the most money, but it’s also going to take more time for you to start seeing results, which is why some people don’t really like to use this method. It can be a little harder to stick to because you’re paying a whole lot of money and seeing very little to nothing in return. 

Make sure you’re still paying at least the minimum balance on all of your other debts while you’re doing this or you could find yourself in even more serious trouble. With the avalanche method you pay off the highest interest card or debt and then you move on to the next highest and keep working your way through. The snowball method means moving from the smallest balance up through to the highest. 

Not Knowing What You Spend

If you don’t know what you’re spending you’re definitely setting yourself up for trouble. After all, how are you supposed to create a budget if you don’t know where your money is even going? You need a budget to make sure that you can pay all of the expenses that go along with your family and your household and you need to have a spending plan to figure it out. 

What you need to do is figure out where all of your money is going in a month and that means tracking all of your spendings. You need to know where you spend a lot and where you’re doing okay. You also need to know the money that’s coming into your household so that you can accurately allocate that money and make sure that it’s going where it needs to.

When you have a budget and a plan in place to take care of these things you’re actually going to find that you have more money for your own personal spending than you might have thought, and you’re going to feel a whole lot less guilty about spending that money. You just need to make sure that you’re doing the tracking to start with. 

Not Bringing in More Money

Generally, you’re going to be spending the money that you bring in each month and that means there’s not a whole lot of extra available for things like paying down your debt. That means you may need to make some changes and some dramatic ones if you’re hoping to make a big dent in your debt and your current expenses. You may need to actually get a second source of income to help you. 

Look for a side job that you could take on that will help you to bring in some extra money. That money can then go directly to paying off the debts that you’ve incurred so you can make sure that you’re putting a little bit more toward the problem. You’ll find that your debt actually starts to go down a whole lot faster when you have that extra source of income, as long as you don’t change your spending to match it. 

Not Being Willing to Cut Back

Sometimes you just need to find areas where you can stop spending. If you’re currently in debt it’s important that you do whatever you can to get out of debt quickly. It’s going to be a never-ending cycle if you don’t. Because if you stay in debt you’ll find that you just keep adding more and more debt onto your problems and that means you never get back out.

In order to actually make a change in your life and start paying off the debt, however, you’re going to need to make some sacrifices. You’re going to need to get another source of income as we already mentioned and you’re likely going to have to cut back on some of the things that you enjoy doing so that you can save more money. It’s not going to be easy, but it’s definitely going to be the only way that you can actually make some changes and improvements in your life.

No one is saying that it’s going to be simple for you to get yourself out of debt and start making the changes necessary to improve your life. In fact, it’s likely going to be one of the hardest things you’ve ever done. But if you’re willing to put in the work and you’re willing to do whatever it takes to push yourself you absolutely can be one of the few that gets themselves out of debt and gets on with living their life.

This is a guest post by Baruch Silvermann. He is a personal finance expert, investor for more than 15 years, digital marketer and founder of The Smart Investor. But above all, he is passionate about teaching people how to manage their money and helping millions on their journey to a better financial future.