10 Mental Barriers to Paying Off Debt: Thinking Debt is Not a Problem

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 One: Thinking Debt is Not a Problem

Do you ever think to yourself, “I don’t think debt is a big deal; after all, everyone has it”? If the answer is yes, then you’re encountering the mental barrier of not thinking debt is a real problem. There could be many reasons for this: perhaps it’s because everyone you know has debt, or because there was no way to obtain the things you needed (like an education or a home) without taking out debt, or maybe even because you’re in denial about having debt. But there’s no getting around the fact that debt, even when manageable, stands in the way of other financial goals.

Why Debt is a Problem

Debt may be unavoidable at times, and perhaps even managed well at others, but at the end of the day, it is still a problem. Carrying debt – whether it be for a credit card, student loans, etc. – costs money – money spent on interest rates and even on fees. Sometimes, the amount of money spent on interest over the life of a loan is alarming! Take credit cards for example. If you only pay the minimum payments on a credit card, it could take years upon years to ever pay the card off.

That’s why I think debt is a problem, even if it’s managed well. (And by managed well I mean if you’re able to make payments and still put money aside every month.) Debt always costs money, while saving money never does (unless you pay a fee for your bank account, in which case it’s probably time to switch accounts). The money spent on interest is money that could otherwise be applied to important financial goals – such as retirement, college funds if you have children, and an emergency fund.

What about the fun stuff? You might say that you’re applying money towards the above goals even while paying on your debt. But just think of how much extra could be going to those goals if the debt was paid off. Or, think about the fun goals you could set. What about traveling around the world, buying the home of your dreams, or developing a career you love no matter the pay? Let’s also talk about the intangibles: never having to lay awake at night worrying how you’d pay the debt if you lost your job; never having to rent your lifestyle out to credit card companies and banks; having complete freedom and control of your finances.

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Making Debt Payoff a Priority

I’m not saying that you should stop living your life until your debt is paid off. And I’m certainly not saying that you should feel ashamed for having debt. There are times in life when debt is unavoidable. For example, I could never have gone to college without student loans. That was a non-negotiable. There are also times in life when you accrued a little bit of debt thinking it would be paid off soon, but quickly grew out of control. I’ve had my fair share of that as well! No matter the reason the debt occurred, you can make debt payoff a priority without losing out on the life you want to live. Here’s how:

1.) Calculate what the debt is costing you
How can you find out what your debt is costing you? Try a debt calculator. Simply enter in the amount of debt you are carrying and you’ll see exactly how long it will take to pay your debt off with just minimum payments and how much you’ll pay in interest. These results may take you by surprise!

2.) Get organized and create a payoff plan
After seeing the above results, don’t let them discourage you! Now you know where you are starting from and that’s the first step to doing something about it. For example, you could go on ReadyForZero and make a plan. This will allow you to visualize what your debt payoff could look like in a variety of situations. Want to be paid off by a certain date? Move the slider and see how much you’ll have to pay each month to make that happen. Or, maybe you’re on a fixed income and can only pay a certain amount extra towards your debt each month. That’s okay! Type in that amount on top of what’s already there and watch how much interest and time that amount actually saves you. Then, just stick to your plan and watch that progress chart as your debt gets closer and closer to zero.


3.) Track your spending
In order to stay on track with your debt payoff, it’s a good idea to track your spending. There are many free sites that you can use to help you keep tabs on your budget. You could even use this budgeting spreadsheet that we created. No matter what method you choose, tracking your spending helps you stay in control and will have a direct impact on your debt payoff plan.

4.) Share your debt goals
Tell your loved ones that you have debt so they can share words of encouragement and help you stay motivated. They can also help hold you accountable so you won’t be able to ignore your plan to pay off debt.

What Else Can You Do?

Making small life changes can have a huge impact on your budget and debt payoff. For example you could: pack your lunch, bring your own coffee to work, cook dinner at home, etc. But the thing that has helped me the most in my own debt payoff strategy has been to talk about it. By admitting to my loved ones that this is a reality in my life and I want to do something about it, I’ve been able to receive emotional support and I even found out that I have friends who are in the same boat and want to work on it together. Was it easy for me to admit that I had debt? Absolutely not! Was it worth getting over my fear and just admitting it? Yes! Debt no longer feels to me like a cloud hanging over my head, but rather something that I can – and will – conquer.

Now it’s your turn to find out what all this means to you. Maybe you agree with my opinions here or maybe you think it doesn’t apply in your own life. But at the end of the day, if paying off debt is something you want to do, then making the debt payoff a priority is an important first step to achieving this goal.

Stay tuned next week as we move on to mental barrier number two. 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 the next 90 days!

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  • John S @ Frugal Rules

    Good post! I remember when I was in credit card debt and #1 was what shocked me out to get something done about it. I knew, in theory, the amount of time it might take me to pay it off. But, when I saw the hard and fast number it finally gave me the jolt I needed to make a plan and get out of it.

    • Shannon_ReadyForZero

      Thanks John! It’s funny how we can know it but it doesn’t really sink in until we see that number…hopefully this will help others come to the same realization!

  • Andre (Boomerang Buck

    Great post!!! I’m a firm believer that the way to get out of debt is not a secret. It’s not until we decide to do something about it that we can conquer it. As you said in your post, we must make it a priority. Like you, I have found it beneficial to pack my lunch, eat dinners at home, and currently working on lowering my interest rates! I am also using the RFZ Share Progress option with my family. That accountability is great!

    Thanks for your post and added motivation!

    • Shannon_ReadyForZero

      Thanks Andre :). I’m so glad that you’re using the Share Progress option! I also think it’s a great way to stay motivated. I appreciate you sharing your experience and kind words!

  • Thanks Shannon. I love the part about sharing your debt payoff goals. Sharing your goal hugely increases your commitment to that goal.

    • Shannon_ReadyForZero

      You’re absolutely right Christopher! Thanks for reading and sharing your thoughts with us :).