In order to find an effective solution….one must have an understanding of what the problem is.
I mean, I wouldn’t go to my mechanic about a weird noise in my car and let him start replacing parts without first having him take a look at her, to figure out what the problem is.
(And yes, to me, my car is a “her” 😊)
But here’s the thing, many people try to break up with their debt without taking the time to gain an understanding of what’s holding them back, what's keeping them in debt, and blocking them from achieving their goals.
They may try different things hoping something will work for them….and sure, they may have some success, but quite often, it’s short-lived and they end up back in the debt-cycle again.
With set-backs come a feeling of defeat…they feel like they’ll never get out of debt. And we know what happens when we start to believe the stories we tell ourselves….the stories play out in our reality.
It’s much easier to find the solution that works, when you know what the “blocks” are.
There are many reasons why people get stuck in the debt cycle. Here are 10 common obstacles that stop people from getting out of debt:
Lack of Knowledge:
Not knowing the get-out-of-debt process can lead to spending time, energy and possibly money on “solutions” that just don’t work, or are short-lived. Skills and knowledge may be gained through reading books, watching videos, taking courses/workshops or even investing in working with a coach like me, and then implementing what’s learned.
Lack of Self-Confidence:
If a person does not have the confidence in their ability to get out of debt, they may find it difficult to ask and find the help they need to achieve their financial goals. Doing the same things over and over again makes it difficult to see the possibility of changing one’s situation. However, if they are truly committed to getting out of debt, they will find the courage to ask for help. With support, they may be able to find the little wins that give them hope and help them gain confidence.
Lack of Support:
When you’re financially attached to someone else, it’s much easier if they support you and are part of team “get out of debt”. It’s difficult to create and execute a household plan when the household members are not all supportive of it. This is where open and honest communication comes into play. Understanding and hearing everyone’s perspective is important in creating a plan that works for the household.
Not Having an Emergency Fund:
Unexpected expenses will arise, no doubt about it. Having an emergency fund can reduce the financial impact and reduce the need to dip into savings, spend money out of pocket or borrow, to cover the expense.
When someone is in debt, they are most likely spending more than they earn, and depending on credit cards and loans to buy the things they want, but can’t afford. To get out of debt, a financial lifestyle change is needed and new, healthy money habits need to be created.
During the get-out-of-debt process, being able to say “no” to spending money on the goods and services you don’t really need, is a biggie. Keeping in mind that it’s only a temporary sacrifice could make it a little more do-able. Allowing small indulgences, as well as finding alternative ways to live a joy-filled life may take the edge off and make it easier to stick with the plan.
High Interest Rates:
It takes longer to pay off credit cards and loans when interest rates are high because only a small portion of the payment goes towards paying off the principal. Increasing monthly payments and/or reducing interest costs may speed up the debt repayment process.
The Joy of Buying:
It’s not easy to say “no” to buying when people around you are spending money freely. Jealously…resentment…or just wanting to have the days of carefree spending back again can be tempting enough to derail the get-out-of-debt process. It doesn't mean you have to stop hanging out with your peeps, as long as they support you. Spending time with like-minded people who understand, and support your journey may make it easier to resist temptation. It's kinda like you trying to lose weight and your friends insist on tea chats at your favourite place for treats...that's not being supportive of you and your journey.
It’s a Journey:
Getting out of debt takes a process, and it’s a journey of transformation….which, unless you come into some big bucks quickly, can take time. It can become discouraging, especially if you have a lot of debt and you feel like you’ve been trudging along, sacrificing month after month, with no end in sight. That’s why it’s so important to have a picture of what your journey will look like, before you start it. Setting up milestones and monitoring your progress on a regular basis will help you stay motivated.
These stories lie beneath the surface, somewhere in the sub-conscious but they still have the power to impact financial decision-making and action-taking. If need be, after the external blocks have been cleared, it may be time to dig a little deeper. Yes, finding and re-writing these stories may take a bit more time and effort but it could be well worth it...especially if these money stories are preventing someone from achieving their financial goals.
As you can see there are a number of blocks that can prevent people from getting out of debt. The key is to understand what your blocks are and what actions you can take to move past them.
This doesn’t mean that your journey is going to be all smooth sailing but at least if you have some awareness of what’s standing in your way…you can do something about it.
So what’s holding you back? What’s keeping you in debt?
Take time to reflect on this….
In order to break up with your debt ….you have to know what your blocks are… and then, when you figure it out…what are you going to do about it?
What actions are you going to take?
How are you going to invest in yourself?
…. your time,
…. your energy
…. your focus
…. and yes, possibly your money.
Some people need help to figure this stuff out, and that’s OK.
If you’re committed to getting out of debt, but you’re struggling to do it alone, I'm here for you.
If you are ready to take action….to invest in you, and you would like me to help you.... schedule a Clarity Call.
Let me help you find your starting point. YOU are worth it!
Thank you for being part of my community!
Have a fantabulous day and always let your awesomeness shine!
Until next time…