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The other day I came across an article published by Time all about how much debt the average American has (I’ll link to the article at the end of this post). It’s a great article because it breaks down how much debt different age groups have. For instance, 45-54 year olds have an average of $134,600 worth of debt. Whereas 35-44 year olds have an average of $133,100 worth of debt. And those under 35 have an average of $67,400 of debt. These statistics include a mortgage payment, but the article also breaks down other types of debt such as student loans, car loans, and credit card debt. While I was reading this article, it had me thinking about why people are not willing to do what it takes to get out of debt. It’s easy to determine why people are willing to get into debt, but let’s talk about why they don’t pay off debt.
Before we dive into the reasons why people stay in debt, I want you to know that I will be speaking specifically about consumer debt and school loans. Below are 4 reasons why people stay in debt.
1. They are scared.
Can we agree that fear can lead people to do crazy things? And don’t get me started on irrational fear! When people act in fear, they can either take action and tackle a problem or clam up and run from it. And when you have a large amount of debt, there’s a lot more fear that comes with it! So instead of facing that fear, they shove it into a closet, make minimum debt payments, and hope it resolves itself in 15 years. But here’s the thing. Wouldn’t you rather face the fear and get the debt out of your life before 15 years is up? Don’t you want to be able to keep all your money and do what you want with it? You can spend or save it as you choose!
2. They are misinformed.
I like to believe the best in people (this can backfire on me though!) so I think that sometimes people are just grossly misinformed. I mean, let’s be honest. Our education system does not do a great job teaching students about how to properly manage money. And then we send bright, shiny, and gullible 18 year olds into the world and hope they don’t mess up. That’s just setting someone up for failure! I believe that so many people go through life unaware of even how to budget or how much debt they have. And don’t forget that so many people have a very misguided knowledge of debt! Some people want to keep their student loans around so they can write off the interest on their taxes (I totally had someone try to deter me from paying off my student loans by telling me this). When people are misinformed, they stay in debt because they see debt as something positive in their life.
3. They aren’t willing to sacrifice.
When you decide to buckle down and pay off debt, you’re going to have to make some sacrifices. The more you sacrifice, the faster you’ll pay off debt. And in a world filled with instant gratification and people telling you that you should have everything you want, sacrifice is hard. I mean, think about it! The society we live in tells us that we can have whatever we want and that we should get it now. No waiting. No saving. Get the new car now! Buy the living room furniture and just put it on your credit card! More and more people are saving less and spending more. So when you try to go against the grain and break that cycle, it can be difficult. You have to retrain your thinking and shift your mindset. But thankfully, you are capable of doing hard things, so it can be done! (Want some inspiration? Read our story of how we paid off our debt.)
4. They don’t know where to get started.
As a glass-half-full person, I like to think that maybe everyone does want to be debt free, but just doesn’t know where, or how to get started. When it comes to making choices with your money, it can be difficult to know where to begin. Do you start saving money first? Pay off debt first? And which loan do you tackle first? It can be confusing and cause people to shut down and give up. Thankfully, there have been people who have done this before and have laid a path out before you. So, there’s no reason to reinvent the wheel and there’s a plethora of information out there on the internet!
If you personally don’t know where to get started, I offer a wonderful FREE 6 Day Budgeting Basics Email Course. It covers how to start your budget, what to cut from your budget, and how to pay off debt. Plus, it’s filled with free pintables that are sent directly to your inbox! It’s a great course for anyone who is new to budgeting or just needs some extra motivation. You can sign up below and you’ll get your first email within a few minutes. Just be sure to check your spam or promotions folder for the confirmation email!
Looking back on these statistics, it’s so normal to be in debt! And honestly, I don’t want that for my family or my future. Do you? As promised, here’s a link to the Time article. I highly recommend you read it!