The total household debt – mortgages, student loans, car loans, credit card – surpassed $13 trillion last year, according to the New York Fed. Why do so many people have so much debt? In today’s society, it’s an enigma if you can get through life without accruing any debt. It’s just a part of life… right?
It doesn’t have to be. Many people are choosing to rent instead of taking out a mortgage. And others are opting not to use credit cards or pay for everything with cash. But what about the 80% of Americans still in debt today? Why do people choose to stay in debt?
Here are a few reasons why many people stay in debt:
1. They’re keeping up with appearances
Theodore Roosevelt once said, “Comparison is the thief of joy.” That’s exactly how it is when it comes to finances. If you’re constantly trying to keep up with the Joneses, you’re obsession will likely lead to financial ruin. So don’t compare your finances to your neighbor’s. For all you know, they may be in a worse financial situation than you are.
2. They don’t know how to get out of debt
Sometimes people have been in debt for so long that it seems impossible to get out of debt now. Some people don’t know where to even start. But the best way to start is to make the decision to get out of debt now. Then find a useful tool, like RentPlusMoney, to help you get started on your path to financial freedom.
3. They don’t see a problem with having debt
Everyone else is in debt, so why does it matter if you are too? If you don’t see a problem with the situation, you won’t have the desire to make a change. Imagine what life would be like without any debt. Imagine the freedom from no longer being financially tied down. While it’s true that you can have a good life with debt, imagine how much better life would be without the weight of debt holding you down.
4. They aren’t making enough income
Most of the time, it’s not a matter of how much you make as much as how much you spend. That’s where a good budget comes into play. However, there may be some cases where you really don’t make enough money to survive. In these cases, it might be helpful to look into creating additional income. Picking up a side job can help you pay off bills or improve your emergency savings plan.
5. They don’t budget
Roughly 40% of adults have a budget that they follow, according to the National Foundation for Credit. That means 60% of Americans still don’t have a budget. If you don’t keep track of your finances, it’ll be ten times harder to get out of debt. A budget will help you choose where to put your money instead of wondering where it went.
6. They don’t communicate
Sometimes financial problems are caused by miscommunication – especially between spouses. If you and your spouse aren’t on the same page when it comes to finances, it can lead to a lot of financial problems. It’s important to be on the same page. Spouses need to talk to each other about their finances and work together to pay off debt.
7. They aren’t willing to make sacrifices
Paying off debt requires a lot of hard work and effort. It won’t just happen overnight. It’ll take months, likely even years, of sacrifice to achieve financial freedom. Sometimes this can seem like a daunting task. But if you’re not willing to put forth the effort, you won’t be able to reap the rewards.
Debt is a serious problem that many people are struggling with today. Debt can cause many restrictions in your life as well as many heartaches. Debt is one of the leading causes of stress in life. Start your journey towards financial freedom by working towards paying off your debt today. It may seem like a long journey, but every worthwhile goal starts with the first step.