The Top Ten Reasons Why People Stay in Debt


Are you in debt? If so, you are not alone. Millions of Americans are in debt, and millions will remain that way for years to come. The good news is that you do not have to be one of them. There are numerous reasons why people get – and stay – in debt. If any of these reasons resonate with you, take that as a sign that it is time to get to work: anyone can get out of debt with the right mindset, tools, and resources.  

Here are the top ten reasons why people stay entrenched in debt.

1. They are not on the same page as their partners

One of the most common reasons people cannot get out of debt is a difficult partner or spouse. Financial discord among partners can cause a multitude of problems, including the inability to get out of debt. Managing money can be stressful, especially when you and your partner do not see eye to eye. Instead of arguing about money and debt, some couples choose to ignore it and remain in debt. Instead of becoming one of these perpetually in debt couples, talk to your partner about why getting out of debt is so important to you and discuss strategies so you can overcome your debt together.

2. They do not know how to get out of debt

Some people stay in debt simply because they have no clue how to get out of it. It is easy to get into debt and to remain in debt, but without the proper tools or education, it is not so easy to get out of it. Many Americans are financially illiterate and do not know where to start. If you are struggling with debt but do not understand the basics of credit cards, loans, interest rates, bank fees, etc., there is help out there for you. From the best debt relief companies to nonprofit debt counseling organizations, you have options. You simply need to avail yourself of them.

3. Being in debt feels normal to them

For some people, carrying debt feels normal. Perhaps, growing up, their parents were always in debt, and they took it as a fact of life. When being in debt is the norm, not the exception, it can be hard to get motivated to get out of it. But when you realize that you do not have to be in debt just because everyone else around you is, then you can open yourself up to a life of financial freedom.

4. They fail to budget

People who do not budget tend to get into debt quickly and stay there. This is because they are generally far more likely to overspend than those who have a solid budget in place. Without a plan for where your money is going each month, it becomes easy to lose track of it and spend way too much, thus keeping you in debt or, worse, digging you even further into a hole.

5. They refuse to make sacrifices 

Once you get into debt, it takes real effort to get out of it. Those who refuse to make any sacrifices with their spending tend to stay in debt and have no chance of getting out anytime soon. Are you willing to give up certain luxuries like eating out, cable TV, or living without roommates? If not, you might be destined for a life of debt. However, if you can make some changes now, you will set yourself up for a debt-free future.

6. They are unemployed or underemployed

Those who are unemployed or underemployed often struggle to rid themselves of debt. Anytime hours or a paycheck are cut, it can lead to a reliance on credit cards to pay bills. From there, it can be a struggle just to keep up with bills, let alone make a dent in debt payment. If you are unemployed or underemployed, try not to rely on credit cards to tide you over until you can find more employment, as this will make it that much harder to get out of debt even once you do find more employment. Instead, cut back on expenses wherever possible, and find ways to side hustle to earn extra income.

7. They only make minimum payments on their credit cards

An overwhelming number of consumers carry credit card debt, which has some of the highest interest rates of all types of debt. People who carry high balances on their credit cards and only pay the minimum amounts every month will face balances that just keep growing and growing. If you cannot pay off your balance in full every month, at least try to pay off more than the minimum amount whenever you can. Otherwise, you will find it very difficult to break the debt cycle.

8. They pay lots of late fees

A fee here or there might seem manageable enough, but these fees can really rack up over time. Many people who consistently make late payments and are consistently charged fees will have a tough time getting out of debt. Wasting money that could be used to pay down debt on fees is just another reason people stay in debt.

9. They live beyond their means

Those who use debt to buy things they cannot afford often find themselves in debt for the long-term. Whether it is using credit cards to purchase items they do not have cash for or getting a mortgage on a home they cannot afford, those who live beyond their means have a hard time ever getting out of debt. To avoid this pitfall, do not use your credit card as a crutch – it should only be used to pay for things that you will be able to pay for, in full, at the end of the month.

10. They try to keep up with the Joneses

Lastly, people who try to keep up with the Joneses (aka, their wealthy neighbors or friends) tend to get into debt and remain there. There is always someone else to compare yourself to; always someone else who has more. Those who fall into the trap of trying to keep up appearances and keep up with others (who may or may not also be in debt!) are likely to remain in debt themselves until they stop trying to compete and start living within their means. 

Living debt free

Debt-free living may seem like an unattainable standard, but it doesn’t have to be. With a few small lifestyle choices and mindset shifts, you can set yourself on a path to financial freedom.