12 Lies People In Debt Tell Themselves
Are you aware of the lies people in debt tell themselves? Maybe you are guilty of doing this, too. I think all of us, at one time or another, have tried to rationalize reasons for going into debt, but it’s a slippery slope to be on.
We are currently living in a time when Americans have more debt than ever before. The average American household has over $100,000 of debt, which includes student loans, car loans, credit card debt and mortgages.
Debt has become so “normalized” in our society that many people don’t even see it as a problem…And that’s a BIG problem. Many of us feel that debt is necessary, or even good, in certain circumstances, so that’s how we start to justify why we are in debt when really, there is no good debt.
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12 Lies People In Debt Tell Themselves
Here are 12 lies people in debt tell themselves that are keeping them in debt and what to do to turn things around.
“Everyone Has Debt”
Well, when you say it that way, it sounds like your saying “it’s ok because everyone else is doing it.” Or maybe you feel it’s “normal” because everyone is doing it. This is the Keeping up with the Joneses mentality and more often than not, the Joneses are drowning in debt. Sure, they may have a big house, expensive cars, Louis Vuitton handbags and look really great on the outside, but the reality is they’re drowning in payments and barely getting by.
The truth is, not everyone has debt and It doesn’t have to be a way of life. I’m sure when you were younger, you remember your Mom saying, “Well, if everyone was jumping off a cliff, would you do it too?” Of course not! This is the same mentality here. Just because everyone else is doing it doesn’t mean you have to.
“I’ll Never Have Any Fun!”
It’s a myth that frugal people don’t get to have fun. That couldn’t be further from the truth. The difference between a frugal person and a spendthrift is a frugal person plans out their purchases. Impulse spending is a no-no. You can take that vacation, but don’t have the buy-now-pay-later mindset. Plan for it and save. Take the credit card/loan option off the table. That’s what has gotten you into debt to start with.
Value simple pleasures in life. Your children aren’t going to remember what toys you gave them for birthdays or holidays. They will remember the time you spent with them. Fun doesn’t have to be expensive and living life to the fullest is not measured in dollars and cents. You can pay off debt and still have fun all while sleeping well at night.
“Getting Out Of Debt Is Impossible”
It’s heartbreaking to hear someone say this. It’s almost like they’ve given up before they’ve even started. Everyone’s situation is different, but the common thread is it is possible for anyone to get out of debt. You just need to devise a plan and stick to it. Your plan may need to include a budget, so you know where ALL of your money is going. You may need to reduce as many expenses as possible or find creative ways to bring in more income . This may also include telling yourself and/or your family “no”, while you’re trying to get out of debt.
“I’ve Never Been Any Good With Money/Budgeting”
Well, my friends, this is one of the biggest excuses I hear. Not being good with money or budgeting is a choice. Now days, if you have an internet connection and can read, you can learn how to be somewhat good at personal finance. Sure, it may take you a little time to get in the swing of things. It takes about 3 months of consistency to get your budget right. You need to be willing to put in some time and learn how budgeting works.
While there are many methods to tackle learning to budget, the key principle is to spend less than you make, try to increase your income and put the difference toward your debt. Stop lying to yourself and making excuses. You CAN be good with money if you really want to be.
“I Don’t Make Enough Money”
Try and make more. Do whatever you can to increase your income. Find a better job, ask for a raise, start a side hustle, rent out a room of your house, sell stuff you don’t want or need. There are numerous possibilities out there if you’re willing to look for them.
“I’ll Always Have A Car Payment”
This may be the “normal” way of thinking, but like Dave Ramsey says, “When it comes to money, normal is broke!” Be weird! Weird people don’t have car payments!
The average car payment in this country is $475, on a 6 year loan, with an average interest rate of 9.6%. The average price of the car is a little over $26,000. What may be surprising is that it loses 25% of it’s value the minute you drive it off the lot! After four years, it loses about 70%!!
What does all that mean?? After you get through paying on it for 6 years, you paid almost $33,000 for a $26,000 car which, if your lucky, is worth around $6,000. Not a good investment.
An older car can be just as safe as a new one. There are plenty of reliable used cars out there. Buying used lets someone else eat the depreciation cost and usually, after the first year, most of the bugs have been worked out.
So, don’t buy into the mantra that you will always have a car payment. Just think what you could do if you weren’t dragging that payment behind you each month.
“I Deserve It!”
No one “deserves” to spend money they don’t have! Period!
One common way people end up overspending is that they rationalize the purchase of things they don’t need. Splurging on things like an expensive vacation or a new car is followed by an explanation like “I’ve worked hard this year,” or “I hardly ever treat myself.” If you live in denial and do this on a regular basis, you’ll never get out of debt or build any wealth. If you change your mindset and instead steer clear of impulse purchases, you’ll be so much better off financially. You “deserve” to be debt free and retire with dignity.
“I Saved Money! It Was On Sale!”
Many moons ago, when we were newly married, I pulled this one on my hubby! I remember it like it was yesterday! Money was tight and I had gone to the mall with a friend, on my lunch hour. I went into a clothing store and found this cute dress that had been marked down. I thought I had to have it.
When I came home, I showed the dress to him and he wasn’t impressed. I tried to convince him of how much money I had saved because it was ON SALE! His response was, “think how much you would’ve saved if you hadn’t bought it!” Well, duh… Thankfully, I grew up.
Bottom line is, it’s impossible to save money if you are spending it. If you rationalize a purchase by pointing out that it was on sale or that you used a coupon, you are ignoring the fact that money is still leaving your wallet. Remember that retailers roll out coupons and sales to encourage people to spend money. The only way to determine if you truly “saved” money on an item is if it was something you were planning on purchasing anyway.
“It’s Good Debt”
When we hear this term, “good debt”, we normally think of student loan debt or mortgage debt. Credit card debt, on the other hand, is considered to be bad debt. While it may be true that some debt seems worse than others, the reality is all debt is bad and will keep you from building wealth. If you’ve used the good debt/bad debt rationalization in the past, try changing your mindset to “all debt is bad debt”. It’s the only way to truly rid it from your life.
“I Need To Build A Credit Score”
In reality, a credit score means that you have been borrowing money. Building credit is only necessary if you plan to keep borrowing money. If you have no need to borrow, you will have no need for credit. If you need credit for say a mortgage, it is possible to get one, without having to have a credit score. You’ll need to use a lender that knows how to do manual underwriting. Credit is not as important as you’ve been taught or the lenders would like you to think.
“Credit Cards Are Necessary For Traveling And Online Shopping”
This is probably one of the most common lies people in debt tell themselves. You do not NEED to have a credit card for traveling or shopping online. We do all of this with a debit card. It does exactly the same thing that credit card does, only the money comes out of the checking account almost immediately.
Credit cards are fine to use if you are disciplined and have the money to pay them off each month, but the credit card companies haven’t become billion dollar businesses from people that do that. They bank on the majority carrying balances from month to month, which is exactly what has happened. The average American household carries a balance of $16,048 in credit card debt. Think again if you think your going to beat them at their own game.
“The Only Way To Pay For College is Student Loans”
It’s hard to believe, but you CAN go to college debt free. Will it be easy? Well, only if you have someone else paying for It, like maybe a rich uncle.
There are several options to look for when paying for college. First, get a job and pay your way through school. Dave says that the average college student, working 20 hours per week during the school year and full time during the summer, can cover the cost of tuition out of their own pocket.
If you’re worried about your grades slipping, a study by McDaniel College found that students who work 10-20 hours per week actually do better in class than students who don’t work at all.
Second, go to an in-state college. The cost of out-of-state tuition can be prohibitive. It doesn’t really matter if the college has a pretty campus or if your best friend is going out of state. You pick a school that you can afford.
Third, cut cost as many ways as you can. Start applying for scholarships early and often! Do as many as you can. Every single one will help! Buy used textbooks, go to a community college and live at home if at all possible.
If you’d like to find ways to go to college debt free, this is a great book, by Anthony O’Neal. He outlines several more options to help avoid student loan debt.
the truth is…
If you want to win with money, you have to stop believing the lies that either you tell yourself or the lies that you have been told by other broke people.
You can get out of debt if you’re willing to put in the work. Paying off debt is difficult, but the formula is simple: spend less than you make and stop digging a hole. If there’s any way to increase your income, do it and throw everything you can at the debt. It’s not easy, but being debt free is absolutely worth it.
Have you ever been guilty of any of the lies people in debt tell themselves? How many more can you think of that aren’t listed here? I’d love to hear from you!
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