Is Debt Holding You Back?

3 min to read

Do you get your paycheck and feel like it’s already spent, even though you didn’t buy anything unusual? Or maybe you feel like it’s difficult to save up for the things you want, despite making a decent living.

If you’re a typical American, chances are that debt is the culprit in situations like those. Debt disguised as ordinary bills, that is. According to Nerdwallet, the average outstanding credit card balance for those households who were indebted was $15,607 as of September 2014.

That translates into a lot of monthly payments, and a lot of interest paid.

Why debt makes things difficult

If a good portion of your take home pay goes to service debt, it can make it difficult to get the things you want. In the case of credit card debt especially, not only are you paying for things you’ve probably already used or experienced, you’re paying extra for those things.

Simply put, when you use debt, you pay more.

That makes it harder to get the things you want from here on out. Less of your money is available to save or spend, and more of it goes to pay for interest on things you already bought.

If you’re carrying too much debt

If you’re carrying too much debt, start by recognizing that fact. It may be “normal” to owe money, but that doesn’t mean it’s a good thing in your life.

The truth is, life is a whole lot easier when your money stays yours.

You can put your money to the use that suits you best instead of sending it off to pay for debt, and it then becomes easier to save up for the things you want. Go even farther by paying cash for large purchases vs. financing them, and you may even be able to get a better deal.

To make a change

If you’re ready to reduce (or even eliminate!) your debt, know that it’s a matter of changing your habits, starting with a commitment to eliminate borrowing.

It also takes time, but it’s completely worth it. Understand that many people get into debt gradually, so getting out can be a gradual process too.

If you feel uncomfortable at the idea of cutting up your credit cards, recognize that as a sign that you may be relying too heavily on debt as a backup plan. It’s better to rely on cash in case of emergency or irregular expenses like car repairs.

Building up an emergency fund will go a long way toward helping you avoid debt, so saving regularly for future expenses is one habit you’ll want to develop. It’s also something that’s wise to do before getting started hard-core on debt repayment.  And budgeting will help you plan for both savings and debt repayment.

Tackle one debt at a time

Once you’re committed to paying off or reducing debt, focus your energies by tackling one debt at a time, while making the minimum required payments on the rest. Doing so allows you to see measurable progress on the target debt instead of being discouraged.

It’s especially helpful if you can go out and earn extra money to put toward that debt in order to reduce it faster. Even something as simple as baby- or pet-sitting a few hours a week can help.

How to do it

The logistics of paying off debt are relatively simple. Most creditors will allow you to make multiple payments each month without penalty, so just check with yours to be sure that’s allowed.

Then you can make additional payments marked “principal only” throughout the month to reduce your balance, instead of needing to wait to make one payment each month.

Once your first target debt is paid off, you can use the money you had been paying to it to knock out the next debt on your list even faster.

Remember, don’t let debt hold you back. Use your money to save and spend the way you want, without paying extra for the privilege.


Jackie Beck writes about personal finance and loves to encourage folks to be debt free. You can read about her debt snowball app here.