10 Reasons You Will Never Get Out of Debt | Kiplinger

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That title sounds pessimistic, doesn’t it? So what can you do to get over that feeling of the debt never going away? How did you get in debt in the first place? Kiplinger put together a list of 10 common reasons people fall into debt. They said:

Do you feel as if you’ll be in debt forever? You’re not alone. According to a survey commissioned by, 13% of Americans say they’ll never pay off all their loans, and another 8% say they won’t pay off what they owe until they’re at least 71 years old. That’s a discouragingly large number of people who consider themselves stuck in debt with no way out.

If you’re in this situation, step back, set aside the despair and ask yourself how you got here in the first place.

Here are the 10 common reasons people fall into debt and tips for how to conquer it:

You Don’t Know How Much You Owe

Many people in trouble have no idea how much they owe. “If you don’t take the time to figure out how much you owe, you can’t make a plan to tackle your debt.” Make a list, choose one to pay off first–either the highest interest one to save the most money in interest, or the smallest debt for the feeling of success it gives–and eliminate it. One at a time.

You Pay Only the Minimum

Kiplinger says:

Making minimum payments each month is a guaranteed way to be stuck in debt much longer than necessary. For example, if you have a $5,000 balance on a credit card with a 15% annual percentage rate and make a minimum monthly payment of just 2% of the balance, it will take you more than 27 years to pay off what you owe, according to a Bankrate credit card calculator. Plus, your total payments with interest over that time will amount to $12,518—2.5 times what you originally charged to the card.

Boost your monthly payment. You save more money in the long-run, which is worth the short-term pain of living on less.

Your Mortgage is Too Big

On average, people spend more on houses than they can afford. “If your mortgage is too much of a load for you to carry, you might need to downsize to a less expensive home, rent instead of owning, or even find a roommate to help defray housing costs.” Or you can make extra payments each month and pay it off faster.

You Took Out Too Many Student Loans

“According to the Federal Reserve Bank of New York, Americans owe a staggering $1.19 trillion on student loans, and payments on 11.1% of those loans are at least 90 days past due.” Get a side job to pay off the student loans. If you have a child who hasn’t yet entered school, read this article for different types of financial aid available. And convince your child to go to a college that costs less.

You Can’t Say No to Your Kids

Some people end up in debt because they borrow money to pay for things for their kids that they really can’t afford. One parent paid $5,000 a month to board a horse and pay for riding lessons for her child. Money she couldn’t afford! “It’s important to let your children know from an early age what does—and does not—fit into your budget.”

You Don’t Have Money For Emergencies

You could end up drowning in debt if you don’t have money set aside for unforeseen expenses. Check out our article on saving for an emergency fund.

You Feel a Sense of Entitlement

You buy yourself things because you think you deserve it or you see that your neighbor has it and you think you should too, even if you can’t afford it. Usually you pay for it with a credit card.

As Kiplinger Editor-in-Chief, Knight Kiplinger writes in The Invisible Rich, “that discretionary spending—the chic apartment, frequent travel and restaurant meals, consumer electronics, fancy clothes and cars—crowds out the saving that will enable you to be rich someday.”

If you don’t have the cash for it, you can’t afford it!

Your Car Loan is Too Long

A car long longer than the standard 5 years may be easier on your budget, but that means you pay more in interest and if you trade it in you will probably end up owing more than the car is worth. And if you roll that amount over into the new loan on your new car, then you are even further behind! Don’t do it.

You Rack Up Late Fees

This is what Dave Ramsey calls “stupid tax”. If you have trouble making payments on time, set up automatic payments through your bank’s online bill-pay. Or make yourself a remind. Avoid paying late fees. Because paying them is just stupid.

Your Interest Rates Are Too High

The higher the interest rate, the more you pay to get rid of the debt. Take advantage of 0% or low-rate balance transfers, unless you have to pay to transfer, and pay it off ASAP.

Don’t despair! You can and will get out of debt, if you buckle down and make a plan to pay it off. You can do it!

Click here for the full article from Kiplinger. (There’s more to it than the parts we excerpted and added to…)

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