7 Excuses for Why You’re Still in Debt

While we are our riding camels in the Gobi Desert we wanted to provide you with some valuable information on finance and getting out of debt. The following article is from the team over at Money Crashers which outlines how David Bakke managed to climb out of $30k in credit card debt and the lessons he learned in the process. Check out more personal finance tips at Money Crashers.

Due to a lot of bad spending choices I made when I was younger, I had at one point amassed roughly $30,000 in credit card debt. Why I fell into such debt is for another discussion, but the reasons why I stayed in debt for so long can be summed up in one word: excuses.

It’s a fact of life that no one is going to manage your finances for you, and the sooner you grasp that concept, the better off you’ll be. There are very few instances where circumstances completely beyond your control are the main factors as to why you’re still in debt.

Excuses People Make to Stay in Debt

1. Saving Money Is too Hard

Depending upon your level of debt and your current spending habits, this may be true. However, let me be clear: You will never get out of debt unless you can find ways to save money in your everyday life. And while forgoing some of your most common expenses (such as clothing or entertainment) may be difficult, why not look into ways that you can save money which will have little to no effect on your personal life?

Eliminate Landline Telephone. If you look at it objectively, you’ll find that your landline is likely an unnecessary expense in your life. Use your cell phone, Skype, VoIP, or Gmail phone instead.
Review Monthly Bills. Banks have a tendency to sneak unnecessary charges into your account statements, such as maintenance fees and so forth. If you find these, either request that they be removed from your statement, or find a bank that doesn’t charge them – Ally Bank is a good option you can look into. You should review all other monthly bills for hidden charges as well.
Research a Mortgage Refinance. Rates are at all-time lows, and you could likely shave a tidy sum off your monthly mortgage payment.
Save on Groceries. It takes very little time to clip coupons to reduce your monthly grocery bill. Partner these coupons with double coupon days at your local supermarket, and stock up when you find an item that you frequently use at a great price.

2. I’ve Never Been Good at Saving Money

My response to this would simply be, “Neither was I.” Once again, maintaining a healthy personal financial portfolio is solely up to you. If you’re not good at saving money, than make an effort to change your habits.

Identify the daily spending purchases that you can eliminate, such as eating out for lunch, until you’re debt-free. There’s nothing wrong with brown-bagging it to work for a while. If you spend money every day on a cup of coffee at the convenience store, buy a coffee maker and brew it at home. You should ask yourself one simple question every time you reach for your wallet: Do I really need this?

3. Credit Card Debt Is a Way of Life

This is the worst mindset you can have regarding your personal finances, and I learned the hard way that many Americans should not use credit cards. It is a money myth that I subscribed to for years, and when my debt level was at its highest, I was paying nearly $375 per month to my credit cards in interest alone. It took several years to completely eliminate all forms of debt from my life, but when I did, that $375 became money that stayed in my bank account each month. This translated into an annual savings of $4,500 that I could spend as I wished.

It will take a great deal of sacrifice on your part to pay off credit card debt. However, the positive effect being debt-free will have on your life will be worth the effort.

4. I Don’t Know Where to Start

This isn’t really a problem – you can start anywhere. Begin by making a budget. Write down on a piece of paper everything you spend in one month. Next to that, write down how much you make each month. If you are spending more than you make, then you’ll never get out of debt. It is important to control your spending by sticking to a budget and eliminating unnecessary expenditures to keep your spending level beneath your monthly income.

5. I Don’t Have the Time

We are all busy in our daily lives, but you must prioritize, so place it at the top of your list to focus on your debts. For instance, if you currently watch a few hours of television per day, then you absolutely do have time to fix your finances. Forgo the TV for a few nights until you get a firm grip on your financial situation and know what you need to do to save.

6. It’s My Spouse’s Fault

It’s likely that this is merely another excuse to avoid taking control of your own actions and situation. However, if your spouse truly is more responsible for your financial woes than you are, then it’s time to have a frank discussion and formulate a joint plan to become debt-free. If you never had “the money talk” with your spouse, then have it now. Agree on specific money-saving measures and set goals for yourselves as a couple.

Someone has to take the bull by the horns regarding your finances, and sometimes there will be tough decisions to make. If both parties fully understand that there is light at the end of the tunnel, then doing what you need to do in the short term should not be an issue.

7. I Don’t Make Enough Money

While this may very well be a valid point, let me point out that there are two ways to get out of debt: Decrease spending, or increase income. If you truly cannot figure out how to get your spending below your monthly income, then you need to figure out ways to increase revenue.

There are many things that you can do at work to bring in more money, such as volunteering for overtime, taking on more responsibilities, asking for a raise, or, in some cases, just showing up for work on time. If you must clock in each morning and are fifteen minutes late to work three times a week, you can put almost $600 in your pocket (at a wage of $15 per hour) just by being prompt.

Additionally, consider utilizing your free time to generate income. Sell your unused or unwanted items around the house on the Internet, or better yet, start your own business. Identify a key talent and figure out how to turn it into a money-making venture.

Final Thoughts

Once you’ve finally solved your debt issues, the next question might be, “What do I do now?” First and foremost, don’t ever fall into debt again. Once you see how much additional money is in your pocket once you’re debt-free, I doubt you will have difficulty keeping your spending habits in check.

Next, keep the momentum going. Although I didn’t necessarily need to, I continued to practice many of the money-saving methods I utilized to get out of debt, even after I paid off my last balance. This will allow you to focus on your next set of financial challenges, such as planning for retirement.

What tips can you suggest for getting out of debt? Have you successfully eliminated a great deal of debt in your life?