Four reasons why you’ll never get out of debt

Here are four reasons why you will never be debt-free.

Woman using credit card to pay online

According to CHOICE, almost half of all Australian households are in some kind of debt. The reality is that many of us might never escape debt is because we spend irresponsibly and live slightly beyond our means. Here are four habits to break if you want to be debt-free.

1. You don’t track your spending or have a budget
Making a realistic budget that you can stick to long-term is the most efficient way to reduce expenses and pay off debt. As you begin to see your savings grow, you will also feel more confident about your financial situation. Creating a budget might appear to be a big task but it will be worth the effort.

2. You spend money to feel good
We all know the feeling of spending money on nice things. In our society, we are encouraged to view spending money on ourselves as an act of self-care. This is where the flawed idea of ‘retail therapy’ comes in. The truth is we’re doing ourselves a disservice by spending our hard-earned dollars on items we don’t really need – or, in some cases, even want. We might also be using shopping to cover up an underlying issue in our lives, so it’s better for you – and your bank account – to curb this spending.

3. You spend time with the wrong people
You’ll never get a head-start on your finances or pay off your debt if you surround yourself with people who want to live a lavish lifestyle. ‘Keeping up with the Joneses’ is detrimental to your pocketbook. This doesn’t mean you need to stop being friends or going out for dinner, but you should be clear about how much you’re willing to spend on nights out, birthday gifts and coffee dates.

4. You have a ‘someday’ mentality
Someday, when the holidays are over, you’ll write a budget. Someday, when you have a better job, you’ll pay off your debt. These empty promises are another way that we sabotage ourselves financially. When it comes to the boring subject of money, the timing will never be right. So, instead of adding to your DVD collection, make a real promise to yourself today to do one thing that will help to get your finances in order. Just one step in the right direction can give you the confidence to change your money situation for the better.



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    5th Sep 2016
    I don't have a budget, but before I spend money on anything I ask myself: Do I really need this? If the answer is yes, then why? What will it give me? Often I find that I end up not buying, instead using what I have. Also realized that the more I have the more I have to look after and the more fear of loss, or having to spend money to insure it. Stuff ties me down, and I rather be free.... as we were all meant to be!
    5th Sep 2016
    I totally agree - once you get the hang of budgeting this way it makes it so much easier. It takes some work over the years to get the gist of budgeting this way through some more detailed written budgets and analysis of your spending from my experience, but it works once you are experienced and is easy to manage daily.

    5th Sep 2016
    Interpreted a bit differently the above for reasons are:
    1. You are not living in reality.
    2. You need psycho analysis to find why you are unhappy.
    3. You are who/what you as a result of whom you associate with.
    4. You are a dreamer who believes good financial fortune will befall you one day.
    5th Sep 2016
    I already live debt free. Don't have a mortgage, own my own car.

    I budget for everything. If I can't afford it, I will go without, or make a plan to save to purchase what I need.
    Ted Wards
    5th Sep 2016
    Same here but I dont own a car I don't need one. I walk to take public transport. I cant tell you the money I have saved because I got rid of my car. I also have very little debt and savings. All bills are paid early and I still manage quite a great life that includes cruising, which is important for me, however I pay cash I dont put it on credit cards.
    5th Sep 2016
    Public Transport ! What's that ? I don't wear my shoes out walking 8K's to shop, I have to have a car ! And between that, Food and Bills I manage to Bank $600 a Month !! :-) :-) :-)
    Old Geezer
    5th Sep 2016
    I thinking the same I have no idea what public transport is. Certainly none around here either.
    5th Sep 2016
    The only public Transport around here are the Flee Taxi's (Dogs) :-)
    6th Sep 2016
    Same here!
    5th Sep 2016
    That said !! Where is he ? He hasn't been in for his regular Skite Yet !! :-) :-)
    5th Sep 2016
    When we got married, decided we'd ever have 2 things on loans at any given time including our house. Everything else we saved for. Paid off house early. Paid off car early. After that paid everything in cash. Very simple !
    Old Geezer
    5th Sep 2016
    Loans are only good if you make more money out of them than the interest you pay. Homes and cars cost you money as well as interest. So don't borrow unless you can make more money by borrowing.
    5th Sep 2016
    Your said the magic word - 'We'. Different story if you are single - same bills - half the income.
    5th Sep 2016
    I'm often surprised how some people I know are usually very frugal in their lifestyle, but often feel the need to spend lots of money on lots of celebratory restaurant and club lunches and dinners for all sorts of reasons...birthdays, farewells, special days that keep happening throughout the year...each event seems to "need" a meal out, which can be expensive, particularly if a large family is involved. I understand families need to get together and people love to gather socially, but wonder if they could consider an alternative such as having a picnic somewhere where everyone brings a plate or perhaps rotating around family members so that the hosting is shared.
    5th Sep 2016
    It has never been about how much money you is about how you manage what you have.

    A great many people waste money in my view; then they wonder at the end of the day why they have nothing.

    It is up to each of us to learn how to budget. It is not rocket science and no one needs to go to MyBudget and pay money for something that is easy to do. Just live within your means. Take a second job (I did) dont buy so much "stuff"...take your lunch to work, dont pay $4 a day on coffees, lunches out.

    There are so many ways people today could save money but they don't want to know about the four letter word SAVE.
    5th Sep 2016
    Many people who don't earn that much finish up wealthier than high income earners as they realise its not what you earn its how you spend it that's important.Its not a sacrifice to spend less.It can provide satisfaction in being a smart spender.
    6th Sep 2016
    I was in debt and was very hard to pay the bills every month and I suffer for a long time avoiding to spend in what I did not need so I start looking at the future and I decide to rent a room somewhere so I sold all I had ..... home and all and keep the cash then I pay most of the debts and move to a room sharing with a nice extrange family because I did not want to bother my kids.

    Now I pay all my debts and I am free then I decide to look overseas living and I start traveling to understand the cultures and ways of living .... now i have spend a lot of time overseas and I spend as much money as I want and do not worry about anything because life is cheap and very comfortable living without big electricity or insurance or car rego bills etc.

    So if you are in debts and live on a nice home on a nice suburb .....downsize and rethink your life ...I did and I am super happy and very very healthy.

    Hope I can help with this and please do not be nasty with me ....... I just sharing my happiness that maybe help you to change your life if you are not happy.

    6th Sep 2016
    Much of what you said, I have been through with and am free as a bird able to fly overseas on holidays in Europe, own an Audi but prefer to rent rather than own as previously.
    Only buy what I really need and dress for comfort and as an investment rather than for fashion although I always dress stylishly.
    Also I do not spend more than I earn, have visa debit card, a salary packaging card and a Coles Mastercard where I have my car and home contents insured with the same crew and thus earning heaps more Flybuy points which are used periodlcally as $10 off my Coles shopping but I also shop at Aldi's and sometimes at Woollies for convenience for only a couple of items as it is the closest. So far, so good.
    7th Sep 2016
    Absolutely and is a great feeling ... you doing great and enjoy life .... this days is difficult but doing what we are doing is easy and cheap.

    Good for you ....congrats ...enjoy and be happy and healthy

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