People everywhere are caught up in a borrow-and-spend cycle that keeps them forever awash in debt. However, it is possible to break this cycle. Why then do so many people fall into debt and never recover?
There are a variety of reasons why people remain trapped by debt. To make sure it doesn’t happen to you, avoid making the following mistakes.
Not Consolidating Your Debts
If you have multiple loans and credit card debt, the payments and interest fees can get out of control. To better manage your debt, it’s best to consolidate your debt with a loan from a company like Lending Arch to have a lower interest rate and reduce your total debt. You may also be able to pay it off faster this way.
Being Unwilling to Sacrifice
Getting out of debt requires that you have enough money to pay down your debt and afford living costs. Oftentimes, to accomplish this, you need to make certain sacrifices. For instance, you may have to give up dining out three nights a week. Doing so will save you money so you can afford your debt payments and basic necessities. However, if you’re unwilling to make these sacrifices, you’ll find it difficult to get out of debt.
Feeling Obligated to Keep up Appearances
The dreaded mindset of “keeping up with the Joneses.” Believing that you have to buy new things continually, so people think you’re well off, can make it impossible for you to get out of debt. The truth is that you’ll need to be frugal to break the borrow-spend cycle. It may be embarrassing, but the consequences of never recovering from your debt are much more serious than not having the latest doohickey.
Having an Addiction to “Stuff”
A lot of people who find themselves in debt are in love with material things. The more they have, the more confident and powerful they feel, and they can never get enough to feel satisfied. As a result, they will continue to accrue debt, making it harder for them to recover. Usually, the only way out is to seek therapeutic help to overcome this addiction. Once you’ve stopped adding to your debt, you should work with a debt counselor to come up with a strategy for paying down your debts.
Losing Hope
If you’re struggling under a mountain of debt, it can feel like there’s no way out. You’re making minimum payments month after month, but the mountain isn’t getting any smaller. As a result, you may feel hopeless and throw in the towel. Unfortunately, giving up won’t solve anything. Thousands of people get out of the borrow-spend cycle every year, and you can do it too. You just need to seek out appropriate help.
Not Making Getting Out of Debt a Priority
You may have good intentions, but you keep putting off getting out of debt. For instance, maybe you make a promise every month to make a budget, but you never do. Unfortunately, paying off debt isn’t a lot of fun. It’s work. However, the end result is worth it, so stop procrastinating.
Dealing with a Spouse Who Isn’t on the Same Page
If you and your spouse aren’t seeing eye to eye on your money situation, it can be nearly impossible to get out of debt. For example, if one of you isn’t keen on spending less, you will have a lot of trouble reducing your debt. That’s why it’s important to remember that you share the debt and need to work together to get out of it.
Summary
Dealing with debt is no fun, but it’s a problem that can’t be ignored. Some reasons why people fall into debt and never recover include not consolidating their debts, being unwilling to sacrifice, and feeling obliged to keep up with the Joneses. Furthermore, people can be addicted to buying things. They can also have lost hope and given up, or else chosen not to make getting out of debt a priority. Lastly, if their spouse isn’t on board with getting out of debt, this may be why they are still trapped in a borrow-spend cycle.
