Have you been wanting to get out of debt for some time, but can’t seem to make any progress?
It’s no secret that paying off debt is definitely not a walk in the park. It’s much easier to get into debt than it is to get out.
If you feel like you’ve reached a lull lately when it comes to paying off your debt, there may be quite a few reasons why you can’t seem to reach your goals.
Here are 5 reasons why you’re not able to get out of debt and how to overcome them.
1. You Aren’t Ready
In order to successfully pay off debt, you need to be in the right mindset. In other words, you need to be extremely motivated and determined so you can overcome even the roughest parts of your journey.
When you’re ready to do anything in life, your chances of succeeding will be much better than if you’re forcing yourself to make a change or you’re just not in it 100%.
One thing I always say is that you need to get really mad about your current situation in order to pay off your debt. If you’re sick of living paycheck to paycheck or having bill collectors eat up all your hard-earned money, you’ll use that frustration as motivation to get out of debt.
If you’re okay with making the minimum payments on your student loans for the next few years because it means you can rent a nicer apartment, then you should start by being honest with yourself.
It’s okay to not be ready to go full force in terms of paying off your debt. I personally slowed down after a year of aggressive debt payoff to save more, then I recently picked back up with extra payments.
It’s okay to take a break or shift your focus when you’re not feeling motivated. The key is to be completely honest and know what you want.
2. You Aren’t Making Any Sacrifices
Paying off debt often requires that you do something to change your current lifestyle. If your current lifestyle and spending decisions got you into debt in the first place, you’ll need to make some conscious changes to speed up the process of getting out of debt.
This often involves making a sacrifice by giving up an expense or pricey habit.
While I ended up moving to a cheaper apartment in order to save money so I could pay off my debt faster, I don’t think everyone has to make a huge sacrifice in order to see positive results. It’s best to make a list of the what you’re willing to give up and what you don’t want to go without in order to become debt free.
You might want to give up going to the mall every weekend or buying lunch at work. Whatever you choose to sacrifice no matter how big or small is up to you but it will play a crucial role in your debt payoff journey.
3. You Aren’t Making Debt Payoff a Priority
How bad do you want to pay off your debt? If you’re serious, you’ll make debt payoff a priority over many other financial goals.
It may not always feel right, but you can’t do everything at once especially when it comes to your finances.
I’ve had to slow down on saving, retirement contributions, travel and other important goals for the sake of paying off my student loans.
I always prioritize debt payments each month by setting up automatic withdrawals and making debt payments early in the month.
I purposely budget extra money to put toward my debt each month. I try to make extra payments early in the month so I don’t end up using the money for anything else but I have pretty good discipline.
My student loan payment is due toward the end of the month so sometimes I have to hold on to the money for my extra payment for more than 3 weeks and I usually tell myself that the money isn’t mine.
I don’t even view it as income because I’m so focused on putting it toward my debt and seeing a lower balance on my next monthly statement.
While you can’t make everything a priority, it’s important to prioritize your top goal for the time being to see the best results.
4. You Don’t Have a Backup Savings Plan
Let’s say you’re doing a good job with your debt payments and you’re on track to meet your goal.
Then, something happens and you’re faced with an expense you weren’t prepared for.You need money quickly but you don’t have it since all your extra income has been tied up in debt payments.
In this case, you may resort to using a credit card or taking out a loan to cover the emergency expense. Doing this can, in turn, set you back quite a bit.
Don’t feel bad if this sounds like you. An overwhelming amount of Americans admit they wouldn’t be able to handle a $400 emergency if they needed to. They just don’t have the savings to support unexpected expenses.
It’s sad because unexpected expenses are apart of everyday life. You can’t really escape them so if you keep wondering why you can’t seem to catch a break, start saving more money to build up your emergency fund.
Depending on how long it will take you to pay off your debt, it’s risky to put every penny you have toward debt without having a solid savings cushion to fall back on.
Maxing out your credit card for an emergency will just defeat the purpose and erase all the progress you made during the month.
Instead, set a savings goal and try to hit it before you start aggressively paying off your debt and making sacrifices to free up more of your money.
Some financial experts like Dave Ramsey recommend setting at least $1,000 aside before paying off your debt but I’d advise setting aside even more.
I personally feel better by having 1-3 months worth of expenses set aside while I’m paying off debt in case anything ever happened to me, my family, my health, or my income.
When you start saving more money, you might feel like you’re neglecting your debt at first but you’re doing the exact opposite. You’ll be building up a cash buffer to protect you from getting into more debt or slowing down your momentum.
Avoid These Common Mistakes In Order to Become Debt Free
If any of these things are holding you back from paying off debt, follow the actionable tips stated above to overcome these setbacks.
Reassess your values and determine why you are actually trying to pay off your debt. Get organized, stay motivated and set some savings aside before you build up momentum.
Have you ever experienced any of these issues while on your debt repayment journey? How did you overcome them?
Chonce is a freelance writer who’s obsessed with frugality and passionate about helping others increase their savings rate, eliminate debt, and work toward financial stability. She chronicles her journey to becoming debt-free on her blog, mydebtepiphany.com.
