When you’re working to get out of debt, it can be stressful.
Naturally your focus is normally on paying off debt as quickly as you can. That’s important, but what’s even more important is to actually fix what’s broken. By doing so, you’ll reduce both stress and your chances of going back into debt in the future.
If you want to fix what’s broken, you’ve got to focus on the right things. That means figuring out what caused you to get into debt in the first place. Often, that’s not what you think.
Think about the typical debt story
Ask someone why they are in debt, and you’ll probably hear responses like these:
- I lost my job, and so I had to put my living expenses on credit cards.
- I went to a well-known college, and had to take out student loans to pay for it
- My car was getting old, and so I had to replace it
Notice anything similar about those (very typical) statements? They all end with debt as something the person “had to” do. I’ve even said something similar myself:
Years ago, I bought a brand new car. I hadn’t had it long at all when it started having trouble. It was constantly breaking down. That wasn’t normal wear and tear, and it wasn’t something I’d done. It was just a terrible car that was regularly in need of repair. Very soon, I started putting the car repairs on my credit card because I “had to”. After all, I didn’t have the money to repair it.
In fact, I actually had many other options besides borrowing.
I could have not driven the car until I had the money to fix it, saved up money each month ahead of time for future car repairs, gotten a second job or sold something to get the money, tried to repair it myself less expensively, sold the car, donated it or sent it to a junkyard if I couldn’t sell it, tried to get it declared a lemon so I could get a replacement, etc.
I didn’t “have to” put the repairs on my credit card. Not at all. It was my choice to go into debt. I just didn’t realize it at the time.
Before you can fix what’s broken for good, you’ve got to admit that YOU are the reason you are where you are today.
Yes, things happen to all of us that are completely outside of our control. Just a few months ago, my son had to go for emergency surgery. Hurricanes hit. People get laid off through no fault of their own. Sadly, all kinds of terrible things happen.
But in the end, you are responsible for how you choose to handle what happens — and for how well you prepare in advance for the bad things that could happen. (Emergency preparedness is a thing!)
And that’s good news, because it means you can change your life for good.
Focus on the root cause
Often, the root cause of debt is twofold: not realizing that there are always alternatives to debt, and not developing and using good money management skills.
So in order to really fix what’s broken — and stay out of debt for good — you’ve got to figure out where you went wrong in the past, and what you can do to change that, starting now.
New solutions; new habits
That means looking at your situation with new eyes; eyes that don’t buy excuses, and eyes that see alternative paths. Start by listing out 3 things you could have done instead for each of the situations where you turned to debt as a solution, like I did above for the car repair debt example. Don’t automatically disregard any of the possible solutions either.
It’s easy to immediately say “well but I can’t do that because blah blah blah”. But in fact, you probably could do that if someone forced you to.
If you’re having trouble stopping the “I can’ts”, follow up the “well but I can’t because” with “but how could I make that happen anyway, even just temporarily?”
There ARE always alternatives. Sometimes you won’t like the alternatives, and sometimes you won’t be willing to do them, but they are there. Get your brain into the habit of looking for and accepting alternatives.
Build a solid foundation
You’ve also got to give yourself a good financial foundation, one that includes building an emergency fund, using a budget, and planning for the future. Because often the reason we “don’t have the money” and “need” to turn to debt is because we haven’t made building a good financial foundation a priority. Yes, it takes time and effort. But it’s worth it.