The other day, I came across a Time magazine article about how much debt the average American has (I’ll link the article at the end of this post). It’s a great article because it shows how much debt different age groups have. For example, the average debt for people between the ages of 45 and 54 is $134,600. While people between the ages of 35 and 44 have an average debt of $133,100. And those under 35 have an average debt of $67,400. These statistics include your mortgage payment, but the article also explains other types of debt such as student loans, car loans, and credit card debt. While I was reading this article, it got me thinking Why People are not willing to do what it takes to get out of debt. It’s easy to pinpoint why people want to go into debt, but let’s talk about why they don’t pay off debt.
Before we dive into the reasons why people stay in debt, I want you to know that I’m going to talk specifically about consumer debt and school loans. Here are 4 reasons why people stay in debt.
1. They are afraid.
Can we agree that fear can drive people to do crazy things? And don’t get me started on irrational fear! When people act in fear, they can either take action and address a problem or remain silent and run away from it. And when you have a large amount of debt, there is a lot of fear that comes with it! So, instead of facing this fear, they hide it, make the minimum debt payments, and hope it resolves itself in 15 years. But here’s the thing. Wouldn’t you rather face the fear and get debt out of your life before 15 years have passed? Don’t you want to be able to keep all your money and do whatever you want with it? You can spend or save it as you choose!
2. They are misleading.
I like to believe the best in people (although this can backfire on me!) so I think that sometimes people are greatly misinformed. I mean, let’s be honest. Our education system does not do a great job of teaching students how to manage money properly. Then we send bright, bright, naive 18-year-olds out into the world and hope they don’t make mistakes. This is just setting someone up for failure! I think a lot of people go through life without even realizing how to budget or how much debt they have. And don’t forget that many people have a very misleading knowledge of debt! Some people want to keep their student loans so they can write off the interest on their taxes (I had someone try to keep me from paying off my student loans by telling me that). When people are misled, they remain in debt because they view debt as a positive thing in their lives.
3. They are not willing to sacrifice
When you decide to commit to paying off debt, you’ll have to make some sacrifices. The more sacrifices you make, the faster you can pay off debt. In a world full of instant gratification and people telling you that you should have everything you want, sacrifice is difficult. I mean, think about it! The society we live in tells us that we can have what we want and that we should have it now. do not wait. There is no saving. Get the new car now! Buy living room furniture and put it on your credit card! More and more people are saving less and spending more. So, when you try to turn the tide and break that cycle, it can be difficult. You have to retrain your thinking and Change your mindset. But fortunately, you are capable of doing difficult things, so they can be done! (Want some inspiration? Read our story on how we paid off our debt.)
4. They don’t know where to start.
As a glass-half-full person, I like to think that maybe it’s for everyone Do You want to be debt-free, but you don’t know where or how to start. When it comes to choosing your funds, it can be difficult to know where to start. Do you start saving money first? Pay off debt first? Which loan do you take first? It can be overwhelming and cause people to shut down and give up. Fortunately, there have been people who have done it before and paved a path for you. So, there’s no reason to reinvent the wheel, there’s a wealth of information available online!
If you personally don’t know where to start, I offer a great free 6-Day Budgeting Basics email course. It covers how to start your budget, what to cut from your budget, and how to pay off debt. Plus, it’s packed with free tables sent straight to your inbox! This is a great course for anyone who is new to budgeting or just needs some extra motivation. You can sign up below and you will receive your first email within a few minutes. Just be sure to check your spam or promotions folder for the confirmation email!
If we look at these statistics, it is natural to be in debt! Frankly, I don’t want that for my family or my future. Are you? As promised, here is a link to the topic Times articles. I highly recommend you to read it!