Three habits that may be keeping you in debt and one that can change everything

By Kathryn Mandelcorn, FMA

Have you ever dreamed about what you’d do if you won the lottery? It can be fun to imagine sudden wealth and all its possibilities. Many people preface their plans with; first I’d pay off all my debts.

We all like the idea of being debt free, so why don’t more people achieve it? There are as many reasons as there are people, but here are three habits in particular that can keep us stuck.

Confusing talk, or thought with action.

We make new year’s resolutions, we read financial blogs and books, we decide to spend less on groceries, maybe clip some coupons, we talk with our friends about how we never catch a break, that just when we decide to make bigger payments on our debt the car breaks down, or our child’s sport fees go up or our furnace needs repair… Money is so constantly on our minds, that we think we are doing the best we can, when in fact we have often done nothing concrete to change the situation.

Not knowing what you really deserve

We live in a quick fix culture. Have you ever had a long or frustrating day then treated yourself to something – anything from a latte to a new phone – because you deserved it? Or you’re shopping with friends and you hesitate over a purchase and they say the magic words, “Just buy it, you deserve it.”

We have responsibilities to our partners, our children, our aging parents, our friends, our communities, and our jobs.  Everybody is busy. So don’t we deserve some enjoyment too? Absolutely! But if you haven’t taken the time to really think about what you want from life, what you really do deserve, you can end up in debt from indulging whims that bring nothing of substance to your life in the long run.

Normalizing debt

When your friends talk about debt and the media talks about the average debt of Canadian households, you can come to believe that debt is just part of life. So even though you may have moments (or months) of worry, at some point it can become a normalized stress, just another frustration of modern living. Often people feel they are managing their debt, they make at least minimum payments, maybe a little more, they get their utilities paid, keep a roof over their head, put food on the table. In fact, day to day life may be very pleasant. The debt is a weight but doesn’t feel like a threat. Without a vision for a different life it can be difficult to muster the motivation to change.

All those habits distract you from the reality of your debt and its impact on your financial and physical health now and in the future.

Busting out of the debt daze

So how do you wake up from distraction and get motivated?

When I work with clients, we take stock of their situation, prioritize their goals and then we do the one thing they usually have never done before; we calculate their debt free date.

That one simple step has a huge impact on their success and an immediate effect on their motivation. Having an end date makes it suddenly seem possible, and you know exactly how much you need to pay back each month. It’s very common for people to get so excited that they try to beat their own date by looking for ways to increase their payments.

The best part is that they feel lighter and more confident even before they make their first payment, because they have moved from talking about debt to having an actionable plan.  When they are tempted to buy something for a quick morale boost they can easily refocus on a more meaningful goal that they now know is achievable if they want it enough. They stop thinking of debt as inevitable and look forward to truly enjoying the freedom mastery of money affords.

So stop dreaming of what you would do if you won the lottery and ask yourself how would it feel to be debt free?  Then use our debt free calculator to find your date and make it a reality!

(For more info on establishing a debt free date and using our Debt Free Calculator read our post Do You Have a Debt Free Date?)