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6 Reasons You are Still in the Debt Cycle

Overview: The first step to breaking out of the debt cycle is to know WHY it’s happening. Here are 6 possible reasons. You can change your habits today!

I am NOT a debt success story — YET.  Don’t you sometimes get discouraged reading all the stories of people who paid off a gazillion dollars in less than three months, and you’re like, “I’ve been working at this for YEARS now and don’t seem to be getting anywhere”?  I know I do.  But the first step to getting out of the debt cycle — the pattern of paying down debt and then building it up again — is to know the reasons why we’re stuck there.

The first step to breaking out of the debt cycle is to know WHY it's happening. Here are 6 possible reasons. You can change your habits today!

Obviously there are some perhaps unavoidable reasons why we end up struggling with debt.  There may have been a job loss or income reduction, or perhaps a medical emergency.  I get that these situations are usually unexpected and can really cause problems for our financial picture. But I’m not talking about those today.

Today I’m talking about why we go into debt or struggle to pay off debt when we truly do have enough money to get by. We don’t have any huge bills or unexpected financial obligations; yet we still have trouble living within our means. Our debt payments have become stupidly large. We can still pay them — sometimes barely — but if we didn’t have them, life would be sa-weet.  For some reason, though, we just can’t seem to get out of that debt cycle.  I think this is a pretty common situation.

Why are we stuck in the debt cycle?

I know that in my case, it’s a combination of habits/attitudes.  In fact, I’ve exhibited every one of the following behaviors at one time or another.  See if you can find yourself in any of these repeating debt cycle scenarios:

1) Seeing spending money as a cure for depression. Usually I don’t go out and spend a bunch, but a new top from Loft’s clearance rack is really a great pick-me-up!  At least temporarily…  I rationalize the guilt by claiming that the price is so good; but for that very reason it can be difficult to stop at just one… so yea.  My mom used to have a saying that when you were out of money, that’s when you should go out and buy a hat. Yikes! Obviously doing this is very short-sighted. If the money is in the clothing column of the budget, then fine. But in my case it most often is not (what’s a clothing column?). So what eventually happens is the feeling of depression is actually made WORSE, because now there is less money to pay for what is truly needed.  It can become a never-ending spiral.

2) Justifying current spending with a future windfall.  Can you say “I can buy this with my credit card in March because in April I will pay it off with my tax refund”??? We’ve all done it. But then what happens in April? There are other uses for the refund money, and the credit card is only requiring the $25 minimum payment… sigh.

3) No savings. This is because we spend everything we make. We live right AT our means, not below them. Then when an “emergency” comes up (more on this in #4), we use the credit card to pay for it.

4) Thinking I need it NOW.  This refers to our definition of an “emergency.” Most things we really can wait for; we just don’t think we can. We don’t want to do the hard work of doing without.  Like when the clothes washer breaks.  We could go to the laundromat for awhile, but that seems too difficult.  It’s easier (and more fun, let’s admit it) to break out the plastic and get a new washer.

5) Not wanting people to know I can’t afford it. This is not quite the same as keeping up with the Joneses.  For me that’s not much of a motivator anymore.  But sometimes in group situations, like when the kids are involved in an activity that has costs involved, or when all the ladies are getting together for an outing, I don’t want to be different.  Everyone else is coughing up the dough, so I do too. Even if it means I am only able to pay half the electric bill this month.  You know I’m not the only one who does this…

6) I think I (or my kids) deserve it. I grew up with a certain standard of living. In the back of my mind, I still feel like that’s what I deserve. Especially at my age – my parents were living a certain way by now, so I should be, too, right?  Or I don’t want my kids to miss out on an experience I think they should have, so I make it happen, even though the money is just not there.  How silly is that?  The truth is that no one deserves to spend more than they make. We’ve lost hold of the principle of contentment.

Identifying the habits and attitudes that keep us in the debt cycle is crucial to finding our way out of it.  These are the ones that have plagued me over the years.  The next step is to come up with solutions to address them.  Most of the time, I’m betting that “Just Say No” is probably a great default policy, lol!

Which spending attitudes do you struggle with?

About the author

Ann Karako

Ann has been homeschooling for 20+ years and has graduated four children (one more to go). She believes that EVERY mom can CONFIDENTLY, COMPETENTLY -- and even CONTENTEDLY -- provide the COMPLETE high school education that her teen needs. Ann's website, AnnieandEverything.com, offers information, resources, and virtual hugs to help homeschool moms do just that. 

Ann has written Cure the Fear of Homeschooling High School: A Step-by-Step Manual for Research & Planning and Save Your Sanity While Homeschooling High School: Practical Principles for a Firm Foundation. She also founded the popular Facebook group called It's Not that Hard to Homeschool High School, which now has over 27K members; and recently she started the It's Not That Hard to Homeschool High School Podcast.

She and her family, including two dogs and three cats, live in rural Missouri.

6 Comments

    • EXACTLY, Erin! The debt free life is the better one, but we look short-sightedly at what’s in front of us rather than what would be best down the road. Learn from my mistakes, peeps!! 🙂

  • I see this so much with my in-laws they are really struggling the debt cycle and use a lot of these reasonings to perpetuate the situation. Its hard for us to watch knowing the happiness being debt free has brought us.

  • When my husband and I first got married right out of college, we had 56K in debt and to snazzy pieces of paper on the wall to show for it. At our first jobs, we didn’t make enough to pay back student loans AND living expenses too.

    It took both of us joining the US Army (loan repayment) and 4 years, but we got ourselves out of debt. It was a lot of work and we made do with one car for almost 6 years.

    We both had to grow up quickly because we couldn’t expect financial help from our parents–none could give it! I’m happy to say that we’be been completely debt free for about 7 years now. We’ve got an emergency fund and my husband’s retirement gets regular contributions.

    I am currently a SAHM and a homeschooler. We can’t live “rich” on a single military income and we don’t own a home because we move roughly every 3 years, but we are still able to live below our means enough to save every month. We have enough wiggle room to eat out a few times a month and see a movie from time to time, but even that can add up if we take a family of four.

    It’s so nice to own our two vehicles free and clear. We can use a portion of our savings to travel about twice a year (usually home to visit family), but sometimes for a nice vacation. We have freedom now to make our money work for US rather than feeling like a debt slave.

    I want to encourage you that it is so worth getting there and staying there! I will never live in a mansion or drive an expensive car, but it makes me feel rich to not owe anything beyond gas, groceries, electric, and phone/internet! Makes budgeting so much simpler too. Believe me, you won’t regret it for one moment!

    Cheers!

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I’m Ann (aka Annie), a veteran homeschool mom of five. I believe YOU can do this homeschool high school thing!
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