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Becoming debt-free would be amazing. Think of all the money you’d free up to buy all those things you’ve been wanting. All those trips your family could take. That sense of relief… like a weight that’s fallen off your shoulders.
Sooo nice, right?
Except you will never be debt-free.
Ouch. That’s harsh. But just paying off your debt won’t make you debt-free for long, just the same way that crash diet won’t help you keep the weight off for long either.
You see, all that debt sitting on your shoulders didn’t just land there overnight and without reason. Unless you get down to the ROOT of WHY you have debt, you will never be able to stay debt-free.
I hear you… “I’m in debt because of hospital bills!” “I needed the money to fix the car!” “I had to spend it because…”
Here's the thing: life will always happen. There will always be another obstacle in the way and another unexpected expense. So let’s go deeper.
Here’s 5 reasons you’re in debt, and what to do about it
You aren't Tracking Your Expenses
This is super common, especially amongst the more comfortable middle-class. You feel like you’ll have money coming in, and aren’t super concerned about ordering another $14 cocktail at the bar.
Except by the end of the month, you’re just a touch short for some of the bills, so you just charge what you can to a card, pay the minimum balance, and shrug. You’ll get to it next month. Except, nothing changes, and more debt piles up.
The solution for this is actually simple. You need a budget. A good solid budget like this one can help you spread out your income so you can enjoy what you love while having enough for your living expenses. It can even help you to pay off your debt fast! Win-win!
You don't have any savings
Experts recommend that you have at least 3 months of living expenses set aside for emergencies. Unsurprisingly, most people don’t or can't do this.
This works when things are fine. But if you lose your job or face any kind of major unexpected expense (uh.. hello COVID-19 unemployment hell), you are going to find yourself deeply in debt almost overnight.
The best way to remedy this is.. you guessed it… you need some savings! Check out this guide for growing your savings crazy fast, and save yourself some headaches.
you don't have a rainy day fund
Or you don’t even know what that is. Uh oh! Look, everyone has a few of those big expenses that rear their ugly heads once in a long while and wallop the daylights out of your bank account.
I’m talking about buying new tires for your car, replacing that old AC unit, paying your HOA dues, or even just paying for the holidays. Did you put those Christmas presents (or Hanukkah or whatever you celebrate) on a credit card to pay off later?
Whelp… looks like you need a rainy day fund. Learn all about what that is and how it can literally save you from debt forever right here.
You keep a credit card for emergencies only
It makes sense to do this, right? It’s like a loan you can tap into at any time if your kid breaks an arm or you get laid off or whatever. That $5,000 or even $10,000 credit limit is way more than you have in the bank at any given time, and can bail you out of most any situation. Right?
That $5,000-$10,000 on your emergency credit card is also subject to an outrageous interest rate to the tune of 16%-25%! Pretty hard to pay off debt when the interest alone is crushing you. You should only be using credit cards to reap the benefits and perks of the cards… not to pay for things you can’t afford.
you aren't making paying off debt a priority
Yep. This is a thing. Are you just paying what you can towards your debt every month? Sometimes just the minimum, sometimes more?
Meanwhile, that crazy interest rate is just demolishing your attempts to get the balance down. Sooooo frustrating right?!
I hear you. If you aren’t actually making paying off debt a priority then it just won’t happen. The system is designed to keep you in debt - banks love those interest payments! Here’s a proven strategy to pay off your debt crazy fast that you can get started on right now!
No one likes being in debt. If you’re ready to get rid of debt PERMANENTLY, then you need to take a good look at your spending and savings habits. Dig down and get to the root of the problem, then overcome it!
Now it’s your turn! Leave a comment down below and let me know why you can’t escape debt, and what you’re going to do about it.