What is a common mistake individuals make when managing debt?

Not making at least the minimum payments on debts is a significant mistake individuals often make when managing their debt because it can lead to a series of negative consequences. When minimum payments are missed, it typically results in late fees and interest rate increases. This can cause the total amount owed to rise significantly, making it much more challenging to manage and pay off the debt over time. Additionally, failing to make timely payments can negatively impact one's credit score, leading to a reduced ability to borrow in the future or obtain favorable interest rates.

Establishing a habit of making at least the minimum payment is crucial for maintaining a good credit history and avoiding additional penalties. While individuals often attempt to prioritize other financial commitments, neglecting the minimum payment obligations can exacerbate their overall financial situation, creating a cycle of increasing debt and financial instability. Managing debt effectively requires consistent payment habits, hence why this specific mistake can be detrimental to financial health.