5 reasons why some people don’t pay off their debts

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man with head in hands and credit cards on table

As of the end of last year, the average household in the UK has a debt (including their mortgage) of around £60k and a staggering 8.3 million people of us say that we are unable to pay off our debts and bills.

It’s also widely understood that having debt can cause detrimental health and emotional effects. Debt can cause stress, depression, mental health problems and relationship issues. With this in mind, why don’t some people pay off their debts?

Five reasons why some people don’t pay off their debts

1.     You don’t know where to start

Let’s be honest, our education system isn’t the greatest at teaching us how to properly manage money. And each bank – happily handing out credit with high interest rates – is a business who needs to make a profit.

When you have debt from lots of different lenders, such as a car loan, student loan, credit card and outstanding bills, it can be hard to know where to begin. Not knowing what to prioritise or how to start budgeting in order to pay off debt can be really confusing and overwhelming. It’s pretty easy to get confused, give up and try to ignore it.

The way to start is to write down every single debt you have. Get all your bills out and get it on paper. It’s only when you have this full picture can you begin to work out how to start paying it off. You can use my debt overview doc to help you out here if you like.

2.     You think you don’t have enough money

How many of you look at your debt and think ‘I just can’t afford to pay that amount off’? Yet all the time interest is being added making the debt even bigger.

Most people would love to pay off their debt but some believe they don’t have enough money to make it happen. If this is you, there are few things you can do:

  • You can look at re-structuring your debts to make them more manageable, reducing the monthly amount owed.
  • You can create a budget and challenge your current behaviour when it comes to saving and spending. I’m a big believer in a budget, but not in the usual sense.
  • You can switch suppliers to save money and reducing your outgoings, to increase payments towards your debt.
  • You can look at opportunities to bring in extra cash. There are lots of ways you can make extra cash with a side hustle such as taking surveys, picking up a part-time job, or selling your services as a freelancer outside of your working hours.

3.    Debts cause fear

Debt and the stress of it can make many of us stick our heads in the sand and try to forget about it. Instead of taking action, many people are so scared of their debt, they try to ignore it or run away from it. This usually causes bigger debts and further problems in the long run.

If this is you, you need to face the problem head-on. Debt advice charities are great for support and will help you to address your stress about debt in a healthy way.

4.    It can be hard to change your lifestyle

Paying off debt will mean tightening your belt to reduce your outgoings or, taking on some extra work which may reduce your family time. Whichever route you choose, there will be a short term sacrifice involved and a change to your current lifestyle.

Paying off debt does involve constant sacrifice. But the more you can sacrifice sooner, the quicker the debts will be gone.

If you want to improve your budget management and saving tactics, then it requires a shift in your mindset. Instead of seeing budgeting as a restriction, you see making or saving more money as opening yourself up to more opportunities. This mindset shift can help you to question every purchase and reduce unnecessary spending, helping you achieve that goal of being debt free.

5. Everyone around you is spending what they like

Making the sacrifices required to pay off your debt is incredibly hard when the people around you are happily spending away on dinners out, clothes and the latest laptop. The fear of missing out is real. It’s easy to feel that way and reconsider your plans, slowly working your way back into your old lifestyle.

Remember that the joy of buying something is short-lived, and the cost of it will stay with you long after that initial purchase-rush has dispersed. Spending money is still ok, just stick to spending small, infrequently and on things that are meaningful, such as experiences with friends and family rather than stuff.

Final thoughts

Paying off debt is not easy, it’s actually incredibly hard. It involves facing your fears, changing your ways and making sacrifices. It’s no wonder so many people don’t pay off their debts.

But make the decision to break free from your debt, put some boundaries in place and it is possible to become debt-free.

If fear, confusion or your current financial situation is putting you off addressing your debts, then it is time to take action. There are lots of support options out there – StepChange or National Debtline are great places to start.


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