10 Mental Barriers to Paying Off Debt: Can’t Break the Cycle of Debt

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. So 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 Seven: Can’t Break the Cycle of Debt

Have you had intentions to get rid of your debt for months, maybe even years? Do you start making progress but then something comes up and suddenly your balances are growing rather than shrinking? If so, then you might be having trouble breaking the cycle of debt.

What is the cycle of debt exactly? Plainly speaking it’s dealing with a situation in which you accumulate debt, pay it down (or off), build it back up, and on and on. You make progress on paying it down but you can never seem to break free. This is a frustrating place to be because you know that you can achieve victory over debt – you may have even been so close you could almost taste it – but something always seems to get in the way.

The good news is that the cycle can be broken! And once you break the debt cycle you can take steps to ensure that you never get back on that train again. So let’s talk about how!

Evaluate Your Past

The first step in breaking out of the debt cycle is figuring out what started it. Then – and only then – can you formulate a strategy to end the cycle. If you’re not sure how it all began, here are a few common culprits:

  • You don’t understand how to optimize your finances, track your spending, and grow your budget. Thus, you’re living paycheck to paycheck.
  • You’ve never paid attention to your finances.
  • You’ve lived beyond your means in the past and now can’t get your head above water.
  • You’ve had some sort of emergency that you were unprepared for. Job loss, health issues, or personal issues are some examples of this.
  • You’ve had to make a large purchase (such as a mortgage or college education) that you couldn’t afford without loans.

These are broad generalizations, but there’s a good chance that your situation will fit into some variation of one of these (or multiple). For example, in my past I lived above my means while also not understanding how to optimize my finances and I had to take out student loans – thus giving me a triple whammy of debt that I’m working to get rid of years later.

Once you understand the why behind your debt, you can move on to focusing on how to break the cycle. Could this debt have been avoided had you spent more time learning how to optimize your finances, keeping a budget, or doing research on programs to help, such as federal student loan programs? Great, these are all changes you can make right now! What if your debt was caused by circumstances that were out of your control? While you can’t change the past, you can find ways to better prepare for the future.

So why does the why of your debt situation matter? Because no amount of tips can help unless you change your relationship with money now. Really take time to think about this so that you’re ready for the next steps.

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Realign Your Priorities

Here’s where we can all come together, regardless of how the debt accumulation began. This is where we look at the present situation and what we want for the future. No matter what happened in the past, there are things that are happening now that could be standing in the way of your debt payoff goals. So what’s the best way to realign your priorities? I’ve said it before and I’ll say it again, make a spending plan!

Why do I always go back to this? Because it’s the only way to really grasp what your current spending habits are doing and how they can be improved. It’s one thing to think about things but another to put them down on paper and see for yourself what’s really happening. When it comes down to it, we’re all surprised when we see our spending on paper. It’s inevitable that you’ll see money going to things that aren’t important to you and that can be reallocated to your debt easily.

Simply put, a spending plan is a one stop solution that helps you: 1) find out how much you’re spending and on what 2) see how much room you have left over for debt payoff 3) get empowered to make changes to focus on your higher priorities, thus putting you in control of your financial future.

Hold Yourself Accountable

The final step of breaking the cycle of debt is to hold yourself accountable: to your spending plan, to your highest priorities, and to your new relationship with money. It doesn’t matter what that relationship focuses on – whether it be building up a large emergency plan because you’ve had many setbacks due to emergencies, on living within your means, or simply on optimizing your finances. The point is that you’ve discovered what started the debt cycle in the past and now you are going to hold yourself accountable to not falling into the same trap.

How can you do this? Many ways! Here are a few to try:

  • Write a letter to yourself outlining what started your debt cycle and how you want to create change in your life. Then check back in with your letter every few months. How are you doing? Did you stick to your plan or did you fall back into old habits?
  • Enlist a trusted friend or family member to report your goals and progress to. This could be someone who’s also working through their own financial situation or just simply someone you trust and admire. Again, check in at least once per quarter.
  • Sign up for online programs like ReadyForZero to automate and track your progress.

Whether your accountability check ins are high tech, low tech, or somewhere in between, the most important thing is to keep up with them. You may change your strategy along the way, but as long as you’re moving forward then that’s okay! Pretty soon you will find that you’ve not only broken the cycle of debt, but that that cycle is far behind you!

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

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  • Cliff.de

    I found the only way I could break the cycle of debt was with Debtors Anonymous I am finally out of the spiral that kept my hopes and dreams down for 50 years.

    • Wow, congratulations, Cliff! So glad to hear that Debtors Anonymous helped you reach your goal.