Now that I no longer write about finances anonymously, many friends and acquaintances ask me personal finance questions.
People often open up and share what feels like their whole story because they genuinely want to improve their situation.
This is one of the best parts of being a personal finance blogger: having the opportunity to help someone change their life and learn to manage money better.
A large portion of the questions I receive revolve around debt and ways to get out of it.
Some have more than $200,000 in student loans, others confess to over $100,000 in credit card debt. Some hide their financial struggles from family, while others describe being completely house-poor and unsure what to do next.
The stories are endless.
The first step toward eliminating debt is understanding why you incurred it in the first place. Knowing the cause helps you avoid repeating the same mistakes; the next step is actively reducing what you owe. If you don’t identify the root of the problem, making a lasting change is very difficult.
Yes, it’s useful to start attacking debt right away, but you also want to prevent falling into a cycle of going into debt again and again.
Below are common reasons people fall into debt and how to address them.
You think you have plenty of time to pay it off.
When I was paying off my $40,000 in student loans, someone asked why I wanted to pay them off so quickly. They suggested I was young and should enjoy my money now, and worry about the loans later.
That idea never made sense to me. Paying off debt sooner can give you lasting peace of mind and financial freedom that temporary purchases won’t provide. I enjoyed my life while paying off debt and didn’t feel deprived.
You never know what unexpected event might happen—a job loss, medical emergency, or other setback. If you postpone paying down debt and instead spend on nonessential items, you may end up in a worse position when an emergency strikes. Wouldn’t you rather have been debt-free beforehand?
You treat your credit card like extra income.
A credit card is not new income. If you’ve been using it to fund lifestyle choices you can’t afford, canceling the card may be the best move. Even if closing it could slightly lower your credit score, continuing to accumulate balances you can’t repay does far more long-term damage.
Ideally, you should pay your credit card balance in full each month. If you can’t, stop using the card until you can.
You justify debt because someone else has it.
Comparing your debt to what others owe can be a dangerous rationalization. Just because some statistic says “the average 30-year-old carries $X in debt” doesn’t make that amount right for you. Other people’s financial choices don’t define what you should do.
Someone else’s debt could be silently crushing them even if they appear fine outwardly. Don’t use other people’s balances as permission to overspend.
You believe you deserve what you buy.
It’s tempting to reward yourself with expensive purchases—big TVs, fancy cars, lavish weddings, or oversized homes—especially if you see others doing the same. But appearances can be misleading. You don’t know whether someone saved up for those purchases or charged them on credit.
I’ve spoken with people in panic mode after discovering massive credit card debt from trying to keep up. You don’t have to keep up with the Joneses. Instead, prioritize purchases that actually improve your life and long-term financial health.
Here are practical ways to cut spending:
- Avoid ATM fees. Use your bank’s ATMs or withdraw cash with no fee.
- Trim TV expenses. Cut cable or satellite. Even streaming services can add up—consider using a digital antenna for free local channels.
- Use cash-back shopping sites. Some services give cash back for purchases you already plan to make. These can reduce net spending on online shopping.
- Pay bills on time. Avoid late fees and the additional costs they cause.
- Shop for insurance. Rates vary widely between companies. Comparing quotes for car, home, life, and health insurance can yield significant savings.
- Save on groceries. Meal planning, buying basics in bulk, and cooking at home cut food costs substantially.
- Drive less, drive smarter. Combine trips, maintain efficient driving habits, and consider a fuel-efficient car.
- Consider a less expensive vehicle. If your car is mainly a status symbol, a practical, lower-cost model could free up cash.
- Downsize your home if necessary. A smaller place lowers mortgage payments and utility bills.
- Use a programmable thermostat. It saves on heating and cooling without sacrificing comfort.
- Find frugal ways to have fun. Socializing and entertainment don’t have to be expensive.
There are many ways to increase income as well. A few options include:
- Start a blog or side business. Many people monetize blogs, freelancing, or online businesses. It takes time and effort but can become a meaningful income stream.
- Sell items you no longer need. Declutter and make money from belongings you don’t use.
- Rent extra space. If you have an unused room, renting it out can provide steady income.
- Take paid surveys and participate in rewards programs. These won’t replace a full-time income but can add small, helpful amounts of cash.
- Use reward sites and apps. Some platforms offer gift cards or cash for searches, shopping, or simple tasks.
- Find part-time work. Local and online job boards often list flexible, short-term gigs that can boost your monthly income.
Common sense, discipline, and practical changes to both spending and income can make a major difference. Understand why you got into debt, then make a realistic plan to get out and stay out.
Why are you in debt? What excuses have you used?
If you feel comfortable sharing, consider posting the amount and types of debt you have (mortgage, car loan, student loans, credit cards, etc.). Talking about it is often the first step toward change.