Getting out of debt is a lot like losing weight. It takes discipline, work, laser focus, and planning. Technically, it’s not hard. You just have to pay back what you owe and not create any more debt in the process.
Sounds easy enough, right? So, why is it so hard to get out of debt? The problem is that we all tend to give up on things too quickly. Let’s go back to my original example: losing weight. To lose weight, you must eat right and burn calories…basically.
But, often, depending on how much weight you must lose, you may have to keep up your pace for a long time. That’s why we give up and call it quits. Sure, we can stick with anything for a little while. We can run a sprint but it’s the marathon that takes determination and grit.
I’m going to help you nail this down once and for all. So, the next time you feel like you hit a wall on your debt-free journey and you ask yourself, “Why is it so hard to get out of debt?” you can go back to the basics and remind yourself of what you’re fighting for.
To get out of debt, you must plan.
Why is it so Hard to Get Out of Debt?#1: You Must Make a Plan (and planning can be a drag)
Just like building a house, losing weight, or writing an essay (or a blog article!), you must plan. Sure, you can just start without a plan, but you will soon lose focus and end up wasting a lot of time.
When we were building our debt free dream home (Big House in the Woods), we drew extensive plans. Not only did we draw blueprints for the floor plan, but we also indicated where we wanted all our plumbing fixtures, electrical outlets, light fixtures, and phone lines. We left no detail out.
If you’re going to do something, then you might as well do it right.
Steps to Get Out of Debt (The “Get Out of Debt Plan”)
If you want to get out of debt then you need a Get Out of Debt Plan!
Step 1: Determine where all your money is going
If you don’t know where your spending leaks are and where you are wasting money, then you can’t plug those leaks and redirect that money toward your debt.
Step 2: Classify your expenses
I talked about this extensively in “How to Become Debt-Free.”
After you determine what you are spending your money on every month, you must classify those into three categories: necessary, things to cut back on, and things to cut out. Read more here.
Step 3: Create a Budget
I know, I know. So many people think budgets are boring and hard to stick with. However, we found it to be so much fun and very easy to stick with. Sticking with our budget while we were paying off debt, was like a game to us. We wanted to keep our expenses low and meet our goals. We wanted to pay our mortgage off at rocket speed just to prove to ourselves and everyone else that it could be done!
View your budget as a challenge, not a hindrance.
Step 4: Choose a Debt Payoff Method
There are three methods to choose from: Debt Snowball Method, Debt Avalanche Method, and Debt Scattered Thunderstorm Method. (I made that last one up myself and it’s the one I used to pay off my student loans.)
Read about them here and choose the best one for you.
Step 5: Get Started!
Follow the plan you laid out, have fun, and stay focused!
Side Note: Which Option Makes it Easier to get Out of Debt?
Dave Ramsey likes the Debt Snowball Method. Personally, I like the Debt Avalanche Method.
This method is the opposite of the Debt Snowball Method. Instead of paying off the debt with the smallest total amount owed, you will pay off the debt with the highest interest rate first. This method will help you save hundreds of dollars in interest payments.
Here is how it works:
- List all of your debts in order according to their interest rate.
- Each month, you will pay the minimum payment on each debt. However, you will attack the debt with the highest interest rate with vengeance. Make the minimum payment PLUS as much extra as you can.
- Once you finish paying the debt with the highest interest rate in full, cross it off your list.
- Then, attack the next debt with the second highest interest rate.
- Work your way down your list until you are debt free!
Why is it so Hard to Get Out of Debt?#2: Most People Fail to Stick with It
How many times have you laid out your plans then, before you knew it, you were already derailed? What is that quote about “the best-laid plans?”
Hold on. I’ll Google it…. Ok, here it is.
It’s from “To a Mouse” by Robert Burns. It’s translated as “the best-laid plans of mice and men often go awry.”
Yes, that can be true, but you must keep it to an extreme minimum.
Here’s the deal. When you’ve made plans to get out of debt, you cannot afford to let yourself get derailed because every time you do, it means your journey will get longer.
When we were paying off our first and only mortgage, we posted our monthly expense sheets on the front of our fridge so we could constantly refer to them and stay on track.
We were working hard to pay our mortgage off as quickly as possible and we were in no mood to set ourselves back.
We were ready to be done with debt forever and hit the open ocean on our first cruise.
And we did! We stuck to our plan and paid our mortgage off in 13 months. From that moment on, we have been completely debt-free and mortgage-free.
Why is it so Hard to Get Out of Debt?#3: Delayed Gratification is Hard
Delayed gratification can be hard and people don’t like life to be hard.
As little children, we all wanted all the good things in life NOW and that doesn’t change much when we become adults. We don’t just grow out of it. We must teach ourselves to do better.
So, when you ask yourself, “Why is it so hard to get out of debt?” the answer usually lies here…delayed gratification. It takes planning and will power to save for that vacation instead of putting it on your credit card.
It requires determination to tell yourself that you’re doing to pay off your debt before you go shopping for a new wardrobe.
It takes grit to say, “You know what, I’m not there yet but I will be. I’ll delay my rewards until my debts are paid and I can truly feel free!”
This brings me to my next point…
Why is it so Hard to Get Out of Debt?#4: Telling Yourself No is ALSO Hard
Most of the time, the reason why people end up in debt is that they didn’t tell themselves no sooner. They wanted new furniture, a bigger house, new shoes, and a new phone. So, they made a way. They charged it and now they have a big hole to climb out of.
If they had only seen all those shiny new things and made a better choice to not spend their money on them, then they would be in a better financial position now.
The biggest secret I can share with you about becoming financially free is to change your mindset about money. Stop feeling sad and throwing yourself a pity party when you deny yourself a purchase. Look at it another way.
Hold your head high and feel empowered when you tell yourself no because making a wise financial decision is never something to feel sad about. You aren’t missing out. You are the one getting ahead.
You are the one getting out of debt and planning a better future for yourself.
Why is it so Hard to Get Out of Debt?#5: Everyone Else is Living Large
So, here you are following your debt-payoff plan, saving money, skipping restaurants, window shopping and not buying while everyone else is living large.
THEY are buying brand new cars. THEY are posting pictures of their 10th expensive latte for the week on social media. THEY are taking selfies in the bathroom mirror with their new outfit on (what’s with that anyway??).
It can be difficult to keep your focus during this time. Just remember that you can’t buy happiness.
Sure, that outfit you want to buy looks cute, but soon it will be in the heap at the bottom of your closet with the cute outfit you bought several months ago.
That’s just how it goes. This brings me to my next point…
Why is it so Hard to Get Out of Debt?#6: Getting out of Debt Can Take a While
Paying off your debt may take a long time and you must remember what you are working for.
Write your goals down and post them where you will see them often, so you can remind yourself of them when you feel sidetracked. Remember, you want to get out of debt, save money, and hopefully retire early.
Remind yourself that you know it may take years to pay off your debt and you are prepared for that. It’s ok.
If you stick to your plan, stay focused, do not add anymore debt along the way, and you will achieve your goals!
Why is it so Hard to Get Out of Debt?#7: Many People Don’t Cut Back Enough
Here is a fact: you can’t get out of debt quickly if you still have cable…or if you’re eating out…or if you’re buying brand new cars. I’m sorry. It’s true.
Why is it so Hard to Get Out of Debt?#8: Unexpected Expenses May Arise
Things happen. Your washing machine breaks or your car needs new tires. Do not get discouraged when this happens!
If you have an emergency fund (and you should since it’s step #1 in your debt-free journey), then you have planned for this!
Why is it so Hard to Get Out of Debt?#9: You Need Support
It’s no lie that the debt-free journey can be an overwhelming one. It’s like you’re standing at the foot of a mountain and trying to figure out the easiest and quickest way up. What you need is a debt blog written by someone who has been at the foot of that mountain.
Maybe you’re asking yourself,
“Why is it so hard to get out of debt?”
“I feel like I’m drowning in debt.”
“I just want to know how to become debt free.”
“I need debt advice.”
You need someone who has been up that mountain before and knows what the view from the top looks like. You need someone who has already taken the ride down the other side and knows about the joyous debt free life on the other side.
Well, you’re in luck. We have been debt-free and mortgage-free since we were 25. We’ve seen the view from the top and I promise you that it’s worth the climb up! I pour all of my knowledge and experience into this debt blog to make your journey easier.
So, what should you do? You need to join my email list (and get 5 Money Saving Hacks to get your Bank Account Growing TODAY). so you will be the first to know about each new article. Then, read this: How to Become Debt-Free.
Why is it Hard to Get Out of Debt if You Only Pay the Minimum?
When we were paying off our first and only mortgage, we made as many mortgage payments a month as we could.
One month, we made 13 mortgage payments at once!
Now, our monthly mortgage was low on purpose. We intentionally bought a house well below our means so that we could pay it off quickly.
If we had only paid the minimum mortgage payment each month, it would have take us 15 years to pay it off.
It is hard to get out of debt if you only pay the minimum because most of that payment goes to your interest. Your principal balance isn’t shrinking much. You end up working your tail off and getting nowhere.
It’s always best to make more than one payment each month.
You can do this!
We have been debt-free and mortgage-free since we were 25. Been there, done that.
I’m here to help you on your debt-free journey! I hope you’ll stick around because this is the best debt blog out there!
Feel free to leave me a comment. I would love to hear from you!
Keep your chin up!
All the best,