10 Mental Barriers to Paying Off Debt: Doubting Your Chances of a Good Financial Future

rfz_mental_barriersAt the start of The Debt Movement, we introduced the topic of mental barriers that prevent us from paying off debt. Why? Because even the best-laid plans can fail and – when that happens – we’re left to wonder what to do about it. The fact is, good intentions and solid planning are important but they won’t move us forward without self-awareness. For the rest of The Debt Movement, we’re going to talk about each mental barrier that prevents us from paying off debt so they can be conquered once and for all. Remember, there’s a lot more to securing a solid financial future than simply crunching numbers in an Excel spreadsheet!

Mental Barrier Number Three: Doubting Your Chances of a Good Financial Future

Do you ever think you should pay off your debt but then say to yourself, “What’s the difference anyway, I’m never going to have money”? If this sounds like you, then you’re encountering the mental barrier of doubting your chances of a good financial future. It will be quite difficult to get out of debt if you don’t think you’re ever going to reach financial prosperity in the first place. So let’s talk about this feeling and what you can do to achieve a solid financial future!

Evaluate Your Financial Doubt

The first step in tackling this mental barrier is asking yourself why you feel this way. Is it because you’re living paycheck to paycheck? Is it because the future feels about a million years away? Or, do you think a solid financial future is only for people who earn a lot more than you? Be honest with yourself because this answer is the key to breaking through the barrier. And don’t feel guilty for feeling the way you do – these are all normal feelings!

Remove Your Financial Doubt

Now that you know why you doubt your financial potential, it’s time to figure out what to do about it. Let’s start with a few key points:

  • Financial potential is not all about income
  • Break the cycle of past financial choices
  • It’s never too late to start building a financial future

You may have heard all of this before, but when applied correctly, adopting these methods can put you on the path to financial prosperity. So let’s not waste another moment!

1.) Financial Potential Is Not All About Income
Financial potential has more to do with what you do with your money than it does with how much money you have. Just like anything else, finances are about what you put into them. You could earn $100,000 a year and literally save nothing – or even have a lifestyle that costs you so much more than you earn that you go into debt. Meanwhile, someone who earns $35,000 per year may actually have a full retirement account and no debt. How does this work?

The key here is in your lifestyle. How much does your lifestyle cost in comparison to how much you earn? Figure this out by taking a piece of paper and drawing a line down the middle. Input your income in the first column. This is a list of all the ways you bring money in each month with a total at the bottom. The second column is your expenditure, in which you should list all the bills and things you spend money on each month, totaling that up as well. Now divide the two numbers and multiply that by 100. That number is the percentage of your income that is being spent. What’s your percentage?

The first way to increase your financial potential is to get that percentage as low as you possibly can. The next step is to write down a plan for saving whatever’s left. There are multiple ways you’ll want to apply this money including 1) debt payoff 2) emergency fund savings 3) retirement savings. Assign whatever money you have to save to each of these categories and determine how long it will take you to reach each of these goals. The road to a solid financial future may be closer than you thought!

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2.) Break the Cycle of Past Financial Choices
Now that you have a true understanding of your financial situation, think about the past choices you’ve made. Some of the most common situations don’t feel like choices at all. In fact, financial distress usually comes as a byproduct of not making intentional choices.

Some examples of this are using a credit card in an emergency, taking out student loans because there was no other way to go to college, or just simply not monitoring your spending or making a savings plan. Whatever the case may be, now’s the time to break the cycle. Cut up the credit card, make a plan of attack for the student loans, start tracking your spending, and make a plan to save each month – a plan which you actually maintain and hold yourself accountable to.

3.) It’s Never Too Late to Start Building a Financial Future
Wherever you are in your life, wherever you are in your finances, now is absolutely the right time to start building your financial future! Remember, it’s not about how much you earn, it’s about how much you save. Of course it will be easier to put more into your savings account each month if you find ways to earn extra money. But, either way, what really matters is that you start saving what you can now. Bonus – saving can be addicting! As you watch your savings account grow you’ll likely feel motivated to find even more ways to save. And the more you learn about optimizing your savings and income, the better you’ll do. So save whatever you can and keep reading up on new methods to help!

I hope this helps you see why even you can prepare for a good financial future. I know that living paycheck to paycheck can be discouraging – but if you get creative – there are always ways to create a larger cushion between your income and your bills. So take that first step and realize that you don’t have to be a millionaire to be financially prosperous!

Stay tuned next week as we move on to mental barrier number four. And don’t forget to join The Debt Movement and help us reach the goal of paying off $10 million of debt in 90 days!

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  • Crystal

    I’ve had to do everything
    on my own all my life. I took out loans for college, bought a crappy
    $1,500 car that I always had to put money I didn’t have into (hence credit card
    debt), and refinanced my husband’s high interest debt when we got married. No
    college fund for me or any type of help from my parents. College didn’t offer the last two classes I
    needed to graduate when I needed them so I had to take one at a time. You
    don’t qualify for financial aid if you only take one class so that went on the
    credit cards too. I always paid more than the minimum so it wasn’t too
    bad at this point. We were perfectly fine (except for the crappy car) until I had an
    OOPS moment and ended up pregnant. It was a horrible pregnancy filled
    with multiple hospital stays for excessive vomiting and many missed days of
    work. I racked up $2,000 of medical debt before the insurance started
    paying 100% of everything. Unfortunately, the baby came in January, just
    in time for the deductibles to reset – another $400 for the baby, $400 for me
    and a nice $1,800 bill for the hospital stay (90/10 plan so that was my 10%).
    Two months later, the pediatrician hits me with the baby needs a molding
    helmet so his skull will grow correctly and will need a minor surgery around 10
    months. More medical debt. My son has the minor surgery at 9 months
    old and then ends up in the ER with an upper respiratory infection six weeks
    later. More medical debt. I finally gave up trying to pay it all
    and did financial assistance through the hospital. I just couldn’t afford
    the $400 payments anymore. I’m still driving the crappy car at this point
    and replaced two water pumps, tires, brakes, alternator, serpentine belt, and
    windshield wiper motor. I can’t afford a decent car at this
    point. Fast forward a
    few years…I’m pregnant again (planned this time) and have a baby girl.
    I have a better job at this point and have gotten a one year old car for
    $10,000 – great deal!!! Things were looking good except I was having to
    occasionally charge food and gas to pay for daycare – couldn’t be helped. Daycare was $225 per week total – more than our house payment! It wasn’t really worth working but we needed that extra $300 per month I cleared after paying for daycare. It sucked knowing all my money was being used to pay for care for children I wanted to stay home and raise. Going into the third quarter of 2009, I became a victim of the banks
    lowering my credit limit on my line of credit – had $3000 available one day and
    $500 available the next. I couldn’t afford daycare anymore and had to
    start working nights and take care of the kids during the day on little sleep.
    It was unbearably hard. They kept lowering my credit limit every three months
    and kept my line appearing “maxed out” and destroyed my credit
    score in the process. Paid and paid and paid and paid on debt for the
    last five years. I never fully got my stay at home mom dream (only for the two years I worked nights and basically didn’t sleep) and continued to work full time and pay debt. I did go back to day shift after my oldest was in school and put the younger one in daycare again. I was really making some headway, until April 2014 when I had
    to get a new roof because it was leaking and there was black mold in the attic.
    That set us back $10,000 and we had to charge all of it because I have
    been paying off debt for years in lieu of putting the money in a worthless
    interest savings account. Oh, and my wonderful car? It got totaled
    in 2012 (rear ended by a careless driver), four months before I would have had
    it paid off – so I’m stuck in another car payment now too. August 2014 – the
    youngest is in kindergarten now and I have no daycare expense. I figure I
    have at least another five years of diligently paying off debt and not racking
    up any new before I’ll have most of it paid off. Not having daycare
    payments gives us an extra $500 per month but the roof payment is $141 so we
    have only about $350 discretionary spending at this point. That’s a lot
    better than the $0 discretionary spending I used to have due to debt and daycare. The
    moral of this very long post is that no matter how hard you try to pay down your
    debt, there will always be setbacks (sometimes major setbacks). If you
    can manage to not let it get you down, (and you don’t lose your job and have to
    rack up more debt while unemployed, or have a major medical expense in the
    $10,000+ range) you can survive this. I still feel everyday that I’m
    never going to get there though and am awaiting the next “setback” to
    fall my way. Will probably have to get another car in five years. The one I have now isn’t doing well and I’ve only had it two years.

    • Shannon_ReadyForZero

      Thanks so much for sharing your story with us, Crystal. I’m so sorry that you’ve been through so much difficulty! But my goodness, you’ve got some amazing perseverance! I know it can be hard to ever see a light at the end of the tunnel when life throws you one curveball after the next after the next, but with your hard work and positive attitude I’m sure you can do anything! Please keep us posted on how things go for you!

    • Crystal

      Thanks for the encouragement. Last Christmas, I had to call a plumber on Christmas Day to snake my main drain line. It cost $350 and I spent eight hours on Christmas Day sucking water out of the basement to try to save the carpet. I just found my basement flooded again. I just can’t win. Every time I work really hard and pay down debt, something happens. I’m very discouraged right now and about to resort to credit cards again for a plumber. I don’t even have trees in my front yard! I don’t know why this keeps happening! I’ve lived here 8 years and haven’t had this issue until Christmas 2013. My husband hasn’t had a raise in 3.5 years and I get 2% raises if I’m lucky. Bacon, ground beef, and orange juice became luxury items years ago. I don’t have cable. We only have one car. We both work full time. I thought if you went to college and got a degree you’d be able to pay your bills and have a decent life but it just isn’t true. I even file separately on our taxes so we each qualify for IBR (income based repayment) so we don’t have to pay our college loans until our income improves. Unfortunately, it seems it never will. Goodbye stay at home mom dream! It’s never going to happen.

      • Shannon_ReadyForZero

        You’re very welcome, Crystal, and hang in there! I definitely know that feeling of one thing piling on top of another on top of another – but keep persevering and you will make it through! I know it’s hard to see right now, but there will be a light at the end of the tunnel. Just focus on the small things you can do each day and they will add up in a positive way. And don’t forget you’ve got the ReadyForZero community cheering in your corner!!

        • Crystal

          So I paid the $160 car taxes at the end of October 2014, paid the $200 car repair for it not blowing heat (heater core needed to be flushed and coolant system also needed flushed). The microwave also went out in November and my daughter was sick a couple of days so I had to miss work and take it unpaid since I had no sick or vacation time left. I used it all in October for the first sewer problem.
          Though the sewer company did fix their end of the clogged drain pipe for free, it clogged again and I had to call a plumber two weeks later. This is my luck. I tried to snake the drain line myself the 2nd time it clogged but was unsuccessful. The plumber cost $100 which I used the Capital One card to pay for. It was also used for the car repair because I didn’t have it after paying the car taxes. While cleaning the pipe snake, the snake hit against the hot water tank right where the bare wires were. I neglected to put the cover back on the hot water tank a couple of years ago when I fixed the thermostats and elements. Sparks flew and guess what? No hot water. Again, this is the kind of luck I have in my world. My husband started trying to talk me into buying another hot water tank. I declined. Luckily, it was just the thermostats so it didn’t cost too much and I fixed it myself.
          My husband lost his job December 19th due to a merger thing. He’s legally blind and can’t drive so finding another job is a challenge. His contracting company has work but he can’t get there because it isn’t on a bus route. I don’t know if we’ll get unemployment or not. His company agreed to pay him until January 30th to find work elsewhere and he hasn’t found anything, not even one interview!!! He doesn’t even want to file for unemployment due to pride. He also won’t file for disability because he desires to be a productive member of our society. His pride will be our downfall.
          He went back to college and took out more student loan money (read “future debt” in place of the words “student loan money”) than he needed in order to get a student loan refund so that we’d have money for a few months. We’ll get the tax refund too so I figure we’ve got about 90-120 days until we run out of money and I have to start liquidating what little I’ve managed to save for my retirement. Beyond that, we’re screwed and the credit cards and roof payment will default. I make just a little too much to qualify for welfare/food stamps so I guess we’ll starve so that I can pay the mortgage and the utilities.
          I just don’t make enough to even have a chance of keeping us afloat. Our house payment is $865, car payment is $165 and there’s the utilities, food, gas for the car, car insurance, and debt. I only bring
          home $1400 per month. It’s just not enough. It is really frustrating being married to a spender who is still going out to eat with friends and spending money like he still has a job.
          We’ve been married almost 10 years and for 10 years I’ve gone without, worked instead of stayed at home with my children, and tried as hard as I could to pay down debt so we could be okay and maybe I’d have a chance of working part-time or staying at home. I just see everything I’ve tried so hard to accomplish slipping away…