Why Can’t I Get Out of Debt?

Continuing with the theme from last week’s post, when I discussed the coming of the dreaded Christmas credit card bills, comes the big question. Why can’t I get out of debt? I don’t like that I’m in debt. I know life would be easier if I got out of debt. I know that I could be doing so much more in my life if I did get out of debt. But I still don’t get out of debt. Why?

For a certain subset of people in debt, it’s purely an information problem. Some people just don’t know how to do it. Once shown the way, they take the steps necessary & get out of debt. It’s not easy for anyone, but this group, once they know how, they do it. I have had a few clients like this, and they’re pretty easy clients. I provide them information & suggest new habits and new strategies, help them build a plan and they pretty much just work the plan & are successful. Sounds easy, right? Well, unfortunately, it’s not that easy for many.

While information is a factor, it’s not the only factor. So, the subset of people who only lack information, is a small subset. For everyone else, the reasons are more complicated. In past posts, I’ve discussed other things that hold people back. So, if you’d like to read those posts, click here or here. But today, I’d like to discuss something that’s very common that holds many people back. It’s called fear.

Once the word fear comes out, the instant reaction from some is to deny that they’re afraid. But when people are overwhelmed, when people are feeling attacked by their spouse, when they’re feeling hopeless, when they’re feeling like they might lose something important to them, what they’re experiencing is fear. And once someone is feeling fear, they’re not going to be making rational decisions. In fact, with fear, and the irrational decisions that follow, the mistakes may compound making the debt even worse.

Most of us are familiar with the fight or flight response to fear. When we’re afraid, we often fight. We lash out. We argue with our spouse & blame them. We get angry. Maybe we yell & try to shut down the discussion. Or, maybe we resort to flight. We just run from our debt & try to avoid talking about it or thinking about it. We put our heads in the sand and hope it goes away. Problem is, none of these reactions get us out of debt. In fact, it’s the opposite. If we get angry and blame our spouse, the credit card company, the system or the world, then that’s the opposite of solving the problem. And quite obviously, hiding from the problem doesn’t work well either. Being ignorant or pretending to be ignorant does nothing to solve the problem.

So, what do we do when we’re afraid and not making rational decisions? The first step is to acknowledge that we’re afraid & that we’re either fighting or fleeing from the problem. Then we dig into what’s causing the fear. Are we feeling overwhelmed? Are we afraid of having to give up something, maybe a car or lifestyle? Is it fear of change and what might be required of us? Once we understand that better, we can start figuring out what might make us less afraid.

Often, fear is based on fear of the unknown. We don’t know what we might have to do if we try to get out of debt. We don’t know how it will impact our lives. We don’t even know if it’s possible (and seems, to us, likely that it may be impossible). So, getting rid of the unknowns is very important. Having a concrete idea of the exact problem, such as specifically how much debt actually exists, plus a plan to get out of that debt helps calm the fears. The general idea that we need to start budgeting and setting goals is not very helpful. But having a concrete budget, concrete goals (supported by the budget) and a concrete plan calms the fears. The unknown is now known. I now know my situation, I have a plan, and if I follow the plan, I get out of debt in 18 months.

There are many other factors that can be impacting your debt situation. But whether you’re a person who just needs good information & better habits to succeed, or whether you’ve feeling overwhelmed and fearful, a financial coach can help guide you through the process of building a plan, setting goals & learning how to budget. Then you can get past the fear & simply work your plan, get out of debt and live the life you want to live.

If you’d like to find out more about Financial Coaching & whether it’s a fit for you, click here to setup a Complementary Consultation. It’s 2023! Why let another year go by while the debts keep piling up?

You can enter your email below to subscribe to my weekly posts.