This ” Debt Reasons: Why You’re Still In Debt? ” post describes the reasons a person still is in a debt situation. Some of these reasons are easy to understand and some are the ones that people exactly know but fail to accept they exist. This post contains affiliate links/ads. See disclosure policy.
My family has been debt free for almost a year now. When I first started my blog, our success story in erasing my debt in under 3 years and saving over $70K at the same time were the main focal points of my blog. As a matter of fact, I received and am still receiving a lot of messages congratulating me on our success.
Since the first day of blogging, I have come to realize that a lot of people do want to get out of debt. Unfortunately, many of them don’t know where to start.
Some people told me their monthly expenses are more than their take-home income. Some of them got laid off and don’t have enough to even satisfy their basic needs.
The stories go on and on and on.
Personally, the best way to get out of debt is to take a step back and look at your situation (i.e. how you manage your finances). You need to understand what you are doing and not doing before you even make other financial steps.
This is what I did when I finally told myself I wanted to get out of debt. It definitely worked.
Debt Reasons: Why You’re Still In Debt?
Here are some of the reasons that many people are still in debt even when they have done so many actions in the past to get rid of it.
Treat credit cards like they’re your own money.
It is tempting to use your credit card especially when you see a big available balance in your credit card account. It is also tempting to use it when you know you are not required to pay off the balance right away.
Remember credit cards are not your money. They are essentially borrowed money that you have to pay back. One of the worst things about using credit cards and not paying them in full is that you incur interest and possibly late penalty (if you don’t pay the minimum charge by the due date).
I have seen a lot of people who fell into the trap of using their credit cards like they’re free money. Please don’t fall into this trap.
I recommend that you stay away from using your credit cards. Cut them, freeze them, hide them, or do something else with them but just don’t use them. If you do need to use them, it is best to use them wisely.
Credit cards can be your best friend (i.e. airline points, rewards, and cash back) and are not always that bad. The bad thing is how you treat these credit cards.
Think you have more time.
When you are young, you think that you have years ahead of you to get rid of your debts.
Make no mistake. As we grow older, our responsibilities change and these responsibilities include financial responsibilities. Many will embark into the life of building a family, go overseas to do Samaritan work, buy a new house, etc.
If you are in debt and doesn’t have a plan on when and how to solve it, you may or will have a harder time getting rid of your debt when you have more responsibilities later on in life.
The best time to tackle your debt situation is today. Not only will you be paying less in interests and penalties, you are also helping yourself to be financially ready when the time comes for you to leap and take bigger responsibilities.
Feel like you’ll never get out of the situation.
When I was in deep debt, one of the things I told myself was that I didn’t think that my situation would become better. Yes, I said that to myself but I didn’t let that thought to overcome my desire and need to be financially free out of debt.
Remember that no matter what financial dilemma you are facing, there are and will be solutions to them.
There are debt consolidations, personal loans, debt assistance, among others you can avail to help you solve your financial problems. One of the best things you can do now is start or learn how to become more financially disciplined and willing to sacrifice now so you can have a better tomorrow.
Live above your means.
One of the reasons that may cause you to be debt-ridden is that you continuously live above your means.
Live within your means. Live frugally because there is nothing wrong with it.
Don’t feel bad if you see a lot of your friends with better gadgets, nicer cars, etc. Don’t keep up with the Joneses.
My wife and I live way below our means when we were paying our debt. As a result we were able to pay our debt faster than we expected. Now, we have a better life and we save more every month than ever.
Don’t be afraid to pause your luxurious life for a moment. Think for a better future.
The positive effect of being frugal is that once it’s embedded in you, you can’t help but be frugal for most of the time and the thought of going back to a luxurious life may not even cross your mind anymore.
Be complacent with what you have.
No matter how you try to fix your finances, if your income is always less than your expenses, you will never get out of debt.
Aside from trimming your expenses, you need to be more proactive and chase for other opportunities to earn more so you can pay your debt and, possibly, save more.
When we were paying our debt, I had a couple of side hustles. I was refinishing pieces of furniture and selling them for profit. I was helping apartment renters move in or out their stuff for a fee.
Sometimes, no matter how you cut down your expenses, your income may not be enough. When this happens, finding additional income-generating opportunities is what you need to do.
Here are some of side hustles that can help you save more money and pay your debt faster:
- Start a blog. One of the reasons our family is able to save a lot is because of the income I earn from blogging. I have made over $25,000 in 9 months as a new blogger. Yes, I made that money in less than a year as a newbie blogger. If you ever want to start your own blog, you can check this tutorial out. You can start your blog for as low as $3.95/month with so many benefits attached to that cost.
- Answer surveys. My wife and I have earned more than $2,000 a year just by taking surveys. Most survey sites are free to join and can help you earn money right away. I recommend you try MyPoints, Opinion Outpost, Vindale Research, Inbox Pays, VIP Voice, Nielsen Digital, Survey Club, and Harris Poll Online. Please check here for more surveys. I recommend you sign up for as many sites as you want so you have better chances of earning more.
- Register to survey sites. While I have noted the survey sites above, there are some sites that will automatically give you bonus just for signing up. Please see this link for more information.
- Invest as early as possible. Always remember that time is money. This means that the early you invest, the greater chance your money will grow into a big amount later on. While there’s not guarantee in investing, it is always better to start early even when you only start with just a couple of dollars. One investment platform I recommend is Acorn. Now, you can invest as little as $0.01 through Acorns. Acorns will roundup your purchase and invest your spare change.
- Shop to earn more money. Sounds crazy, right? When I say shop, I mean use shopping rewards programs when you shop for your necessities. There are also other survey-like shopping opportunities where you can earn money by trying products for FREE. I recommend you try ShopTracker, Cash Fusion, etc. Please visit this link for more sites.
- Find a job. You can always try to find a part-time job to supplement your income. You can find jobs through different sites such as Snagjob, Indeed, and LinkedIn.
- Sell unused items. If you have some clothes and other products that you no longer need or use, you can always sell them for some cash. You can either do it via Craigslist or you can talk to your friends who want to buy your things for a discount.
As with expenses, these are some of the ways that helped my family in the past and has continuously helped us in reducing our monthly bills:
- Talk to your bill collectors. I wanted to say to pay your bills on time but that’s not always possible. The next, best thing you can do is communicate with your bill collectors and request for some payment arrangement. You’ll never know what arrangements and deals may have for you.
- Cut your cable. If you are reading this email, then, that means you have internet. Some cable companies offer free streaming on their sites. If you are not into that, you can always check Hulu, Netflix, Sling, and other platforms, which cost less than a month’s cable bill. If you want an ever better solution, you can opt for Jeestream. It states on its website that you won’t have to pay ever again when you have Jeestream. It’s worth a shot.
- Read my posts here. I do have a ton of tips and tricks on how to save money. Most, if not all, are something that my family has done in the past or still doing currently. Here are some post you might want to check out: