Living Debt Free seems to be a dream life for many people. However, for certain people, this dream is beyond their ability to achieve. If you dream to be debt free but you still keep receiving the bills from your creditors each month, you are not alone.

Before this I wrote a post about why people are in debt and I wish people will understand why they are in debt after reading the post. By understanding the reasons, they will change and improve. However, lately I found that this is not enough. There are a group of people who know the why, the steps and also the facts to get out of debt but in reality they are still in debt.

Don’t you think it is strange that people who know everything about debt free but they are still in debt. I believe the process of being debt free is just like getting your weight under control. Everyone wants to have a good looking and healthy body but there are still people who are over-weight. This is because it takes “something” to achieve it and this what I want to discuss over here today.

Besides a Dream of Living Debt Free, What else are needed?

There are a lot of people want to get out of debt as soon as possible. However not everyone can make it.

There are a lot of reasons why people cannot get out of debt. One of the main reasons is the way they think about money and debts. I can see this from the people around me and I found that with different thinking on money, they will generate different financial results. So the way you think is very important in the process of getting out of debt.

If you want to get out debt and in order to help you to do so, I have collected some of the “Thinking” that people have that make them going deeper into the debt. So if you found that you are having the similar thinking, please make a strong decision and change it. Without further ado, here they are:

Thinking That Grow Your Debts

Synopsis: People can’t get out of debt because they don’t know or care about how serious their debts are. It is usually too late the time they realize this.

Before this, I talked about the reasons why people are in debts. After that I talked about how we can motivate ourselves to get out of debt by finding the reasons. Both articles are talking about the mindset preparation for getting out of debt.

In this article, I also want to talk about another mindset preparation – knowing how serious your debts are. In most cases, people tends to avoid the issue of debts simply because they don’t know how serious their debts and financials are. They just don’t know they are living around the cliff and under the hot water. Because of this, most people don’t really take any actions or care about their finance until the problem becomes big enough to catch their attention. I saw a lot of people never control their expenses or manage their money even they are in deep debt. It is really hurt to see that they keep buying unnecessary items while they should use the money to pay off their debts. All this because of they never pay attention on the debts signals.

The Debts Signals

So below are some of the signals that are trying to tell you – You are in debt and please pay attention on it! However, this is also the signals that people try to avoid and deny

1. High Minimum Payment. If your minimum payments of all your debts are more than 20% of your income, then your debts are too big.
2. You only able to pay minimum payment. Each month you only able to pay the minimum payment for your debt. In this condition, you are fully become a debt slave for the creditors.
3. Cash and Debt Ratio is deeply negative. One of the features I found from Mint.com, a free online money management tool, is the cash VS Debt ratio. It simply shows you the ratio between cash in your accounts and your debts. If it is deeply negative, you are in risk.
4. You can’t charge your credit card anymore. You already used up all the credit available in your credit card until you can’t charge anymore. You are 100% deeply in debts.
5. Looking for a second income/job/business to pay your credit cards. Your main income is not enough to cover both your living expenses and debts.
6. Creditors are calling you. Your creditors know how “good” your account is. If they are calling you, you are in financial trouble.
7. You are living credit card to credit card. You can’t live without a credit card because you have no cash on hands. In fact, this is a cycle where you keep on charging your credit card and keep adding the debt while you still lack of cash on hands.
8. You are worry and avoid looking at your bills. I believe that we can feel the level of our personal finance. So if you are worry or always avoid opening your bills and looking at the figure, actually your subconscious is telling you that you are in danger. So stop cheating yourself and face the problem directly.

As you know, a debt is a cycle. If you don’t do anything, you just get deeper in debt from time to time until you have to declare bankruptcy. Bankruptcy is not a joke because it just a “hell of money” for your life. So before this, please pay attention on every signal that your debts are giving you, feel it and take action to get out of it. It never too late if you start today! In fact you have no reasons to delay or procrastinate, have you?

Synopsis: People fail to get out of debt because they are lack of reasons and motivations to do so.

I always emphasize that the reasons are the most important source of motivation for us to take action and achieve something. By clearly knowing the reasons, it will be easier for us to plan for our goal, take action, be motivated and never give up. Giving Up is the stopping point for our goal. I believe as long as we don’t give up, there is no full stop for us and so as failure. If you never give up and keep doing, one day you will success. This is why finding the reasons to do something are very important.

Getting out of debt is one of the hottest goals that many people have make. However, not every one of them can work until they pay off the last cents. Why? This is because most of them don’t have a concrete and painful WHY to support their goal of getting out of debt. If you are one of them, don’t worry. In this article I will show you some of the reasons why you must get out of debt as earlier as possible.

Reasons Why You Must Get Out Of Debt

Your Marriage and Family

Debt has the power to wreck a marriage! It is really sad to hear that couples around me arguing and quarrelling because of money or debts. They love each other however they just cannot handle the stress from debts and then release their stress on their love one. This is quite a common condition happens on most people around me.

Debt has some kind of side effect on our emotion especially for the person who generates income and manages the expenses of a family. Usually this job is done by husband wife. The condition even worst if they found that their income is not enough to cover all the debts. No matter how hard they work, they just can’t drop down the debts. Then they will start blaming each other that why they overspending, buy something useless and etc. Then each of them will be angry, unsupportive and finally threaten their marriage. Long time argument will break a marriage. Once a marriage is broken, then the family will be separated and everyone will suffer from this incidence, especially the children.

So If you love your family and children, please set a time and sit down, talk to your spouse and discuss what you all can do to pay off the debt as long as possible.

You Sanity!

Are afraid to answer the phone because you have many creditors after their money? Do you lose sleep at night because you mind keep counting the number that how much money you owe? Are you living in a worry and stressful life as you have to keep facing the debt again and again every day? All these are the most common problem that people may have if they are deeply in debts.

Don’t you feel that it is a big problem if you have this kind of lifestyle? All this will affect your both your mental and body health. First, debts will generate unhealthy emotion such as anxiety, frustration, hopelessness and worry. All these emotion states will affect our health of mental and we call this financial stress. When the financial stress hit until certain level, people will try to do something to release it. Here people will likely adapt some bad habits such as drinking, smoking, over-eating or even taking drugs! All this will affect our body. This is a chain!

So if you want to live longer, freely, out of worry and be happy every day, then you must make the decision, take action and do something to reduce your debts. There are plenty of debts reduction advices available on the internet. Just read through and take action. The more debts you pay off, the less of stress you can feel. You really can feel the change.

Your Credit and Future

Our credit is very important because it is linking up with our future. Let me ask you – Do you want to achieve financial freedom, become rich and wealthy? Or Do you want to have financial security for your life? Where you don’t really have to worry about your money so much….

If you say yes, then you must take a good care over your credit. This is because we can leverage on our credit to achieve our financial goals in future. For example, you want to buy your dream house for your family. So you will need to have a good credit in order to get a good mortgage deal. If your credit is bad, no bankers will lend their money for you to buy your house.

If you want to be financial free and rich, then credit is one of your weapon. You are going to need credit to borrow massive of money as your capital and invest. You are going to use “other people money” to build your own wealth. This is one of the fastest ways to generate money.

Now all you have to do is start taking care of your credit. Of course, the most direct and effective way to increase your credit is paying off your debt!

Conclusion

Above are just some of the main reasons why we must get out of debt. This is for the goods of our family, our love one, our health and future. You may also figure out more reasons to support your desire to get out of debt. The more reasons you have, the stronger your desire will be.

This is an article that discusses the reasons why people get into debt. If you want to get out of debt, then knowing the “Why” is the most important step to solve your debts problem. This is a must!

What is debt? Debt is something that a person owes to somebody. Debt can be a good thing and also a bad thing. This has to depend on the reasons why we get into the debt. So if you are in debt and you want to get out of the debt, then you must know and find out the reasons why you can fall into the debt.

The first step in the process of getting out of debt is to figure out how you can create so much of debts. This is a must because without knowing this, your “debt free living” will not last longer. Even you manage to get out of debt in the shortest time, however, you will fall back to the debt if you don’t know the reasons why people and you get into debt.

Generally I can say that there are 2 categories of reasons why we will get into the debt. Let me call it the “Avoidable Debts” and “Unavoidable Debts”. Below have more details on each of them.

Avoidable Debts

Avoidable debts are the debts that we can avoid. However, there are still many people get into the avoidable debts. Below are some of the main reasons why people get into the avoidable debts.

• Compulsive Spending. Compulsive Spending means a person cannot control his/her buying desire and buy something that not necessary. The buying desire is simply more than those financial literacy and knowledge. According to some expert, this is a kind of psychology problem.
• Luxurious Lifestyle. Everyone dreams to have a luxurious lifestyle. However, in fact, this is another financial trap for people. Most high income and middle class people will fall into “luxurious lifestyle” financial trap. They will go out to buy their big house or vacation house by carrying new mortgage loans. They will also buy new boats or sport cars to show off their financial abilities. They still go for it and ruin all their personal finance even though they can’t really afford them.
• Bad Addiction. Some of the bad addiction such as gambling will also make people get into a big debt. By the way, many addictions in the world will ruin our life.

In conclusion, avoidable debts are more related to our self-control, characters, buying habits and money management. This is more about our internal factors. To solve this problem, we must learn the skills to overcome our habits and mindset. Self-improvement education material is important for people to get out of avoidable debt.

Unavoidable Debt

Unavoidable debts are the debts that we cannot avoid. In most cases, unavoidable debts are related to those disasters and unpredictable incidents that happen in our life or we can call it unexpected expenses. Some of the reasons why people fall into debt are:

• Losing Their Job. Many people are living paycheck to paycheck. So job is very important to most people as this is the only income source that they have. I already saw many examples how people fall into debt because they lost their job. They have no choice but have to call out some loans to cover their living expenses and etc.
• Experiencing medical issue. I think this is the cruelest thing that we might experience in our life. Nowadays, medical costs are getting expensive. Many people fall into the big debts due to the expensive medical expenses which in most cases we really don’t have much more choices available!

Unavoidable debts are more about external factors and beyond our control. However the good news is it is easier to be avoided compare to avoidable debts. A good financial planning such as money saving and starting an emergency fund will prevent us from most of the disasters in our life.

Conclusion

Generally, there are 4 lessons that we must learn to get out of debt or prevent us from being in debt:

• Self-Control. Control and behave ourselves to spend money wisely. Delay gratification is another keyword for this.
• Financial Planning. We must start to gain control over our finances and plan for our future. Please always remember that planning for the future is the best solution for the unpredictable incidents in our life.
• Money Management. Control and manage our expenses and save up some money for emergency fund.

Am I missing something? Please feel free to add it up below(comments).