Why do we stay in debt? It’s a fair question to ask. And it’s a question for which many people do not have an easy answer. There are a number of factors that keep us in debt.

But pinpointing which of those behaviors is keeping you in that holding pattern is a great jumping off point for improving your financial well-being. With that in mind, I have collected a list of five common practices that keep us in debt and deter us from achieving financial freedom.

Getting Out of Debt Takes a Backseat to (Seemingly) More Pressing Issues

This is very common. We often think of getting out of debt as a nice idea or something we will do when we’re older. But there is rarely a convenient time to stop accruing unsecured debt and living within your means. If you want to be debt free, you must make getting out of debt a high priority and stop getting trapped in the endless cycle of paying the monthly minimum and accruing new charges. Paying the minimum required balance barely covers interest and fees. It also tends to inhibit progress because if you feel like you aren’t getting anywhere with your plan to pay off your balances, it’s much easier to continue utilizing your cards when it isn’t absolutely necessary. Even if money is tight, chances are that you can pay more than the minimum and abstain from racking up new charges. It’s about creating new habits and getting out of the rut you are stuck in.

People Don’t Adhere to a Budget

Make a budget and stick to it. Those are seven of the most important words of advice I can impart. It doesn’t matter what your income bracket. People save more and spend less when they know where their money is going. If you aren’t accountable for what you spend, you have no incentive to manage your money wisely. But if you know you will have to answer for your spending (even if it’s to yourself when you reconcile your budget) you are far more likely to make smart choices. If you’re not sure where to start with establishing a budget, have a look at my post on that very subject right here. (link)

Keeping Up with the Joneses

As silly as it is, we often stay in debt because we want to have the latest and greatest and we want people to think we’re successful. But if you can overcome that urge to appear successful by any means necessary, you can channel your efforts into paying off outstanding balances and living a more authentic life.

Lack of Shared Priorities Around Finances

Not being on the same page as your partner about finances can be a huge obstacle to financial well-being. If you are spending responsibly but your partner is out of control, all of your efforts are for naught. Creating a budget as a couple ensures that both parties are bought in and committed to doing what it takes to achieve financial stability. 

Credit Card Debt is a Vicious Cycle

I’ve touched on this before. But credit cards are designed to keep you captive. They come in handy in the case of an emergency but using them without paying off the balance at the end of the month establishes a pattern that can be very difficult to get yourself out of. If you are only paying the monthly minimum and accruing new charges each month, you could be in debt for the rest of your life. Credit cards are useful in the case of an emergency where you have no other alternative. But using them to buy things you couldn’t otherwise afford has lasting consequences that can haunt you for years to come.