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Five Reasons Why You are Still in Debt

Debt is one of the most common causes of stress in our daily lives. Many of us have debt and, unfortunately, we struggle to pay it off. Obtaining credit has become so easy for many people, so when the opportunity comes to increase your limit, it is hard to say no.  This can affect every aspect of our lives and our well-being.

Because the issue of debt is so common, it is easy for people to write it off and avoid the problem entirely. We keep spending money as we normally would, but the debt just keeps getting bigger and soon, we run out of options. If you have been trying to dig yourself out of the debt hole but are still not making any progress, you might be making some mistakes that you don’t even realize. Here are some reasons why you might still be in debt, and how you can fix them.

You have multiple lines of credit

When one credit card is maxed out, or you have used up all the funds from your previous loan, it is easy to run out and get another one instead of freeing up space on the first line of credit that you had. Try paying off the credit cards or loans with the smallest balances to eliminate some of your debt. You could also look into transferring the balances to one line of credit, which has become a sound option for a lot of people.

You are only making minimum payments

Although this is progress, it does not help you in paying off your debt. These minimum payments are designed to make you think that you are making a dent in your debt when in reality you are probably only paying off the interest that you have accrued over the last month. Make real progress by paying off as much as you can each month, above the minimum payment whenever possible.

You think you still have plenty of time to pay off your debt

Due dates and extensions are a few other things that give us false hope when it comes to our credit card debt. Your debt isn’t going anywhere, so you don’t need to worry about it until you are really financially stable, right? Another myth, you will never be financially stable until you get your debt under control. In reality, the longer you put off payments, the more money you will throw away on interest. Start today, no matter what your financial standing is.

You use your credit card for non-essential things

Many people use credit cards to treat themselves to expensive items that they cannot afford, but think that they deserve. Although you do deserve nice things, you really do not need as much as you think you do. Adopt a new practice of only using your credit cards for emergencies.

You do not have a debt pay-off budget

You may have had a budget that has worked well in the past, but when you are looking to seriously pay off large debts, you need to create a new budget that will work around it. Treat your debt payments as expenses and put them into the budget every month. This will ensure that you will make consistent payments and get your debt paid off quickly.



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