5 Habits That Keep You Downing in Debt

Ignorance is not bliss. What you don’t know about money can keep you stuck in a vicious loop, feeling like a hamster on a wheel. Until you make changes, you’ll be stuck in an endless cycle of continuously chasing dollars trying to keep up with your debts.

Practicing these 5 habits will help you understand some of the key areas you get stuck. By changing these 5 habits you will have clarity about where you money goes, create a plan to get out of debt, feel more peaceful, and be empowered.

Habit 1 – Ignore how much debt you owe

Without having an understanding your total debt and having a plan to repay it, you’ll remain stuck in an endless debt cycle. It’s difficult to stick to a plan to pay them off when you don’t have a starting point. It’s a simple process. Create an Excel or Google Docs spreadsheet listing ALL of your debts – car debt, credit cards, student loans, mortgage, medical bills and anything else you have a balance on. This helps you have clarity about where you’re at today. Then you can develop a repayment strategy to become debt free. How will you ever achieve your financial goals without a plan to get to you there?

Habit 2 – Make minimum required payments

It’s tempting to only pay the minimum amount due. That’s all they’re asking for, right? The problem is most of that payment is being applied to interest. Only a small amount is paying down the principal. As a result, the balance is only gradually reduced. Most credit card statements tell you how long it will take to repay the balance if you only pay the minimum amount. It’s depressing when you look at how long it will take! You may think, “I’ll never get out of debt!” Now that you have a spreadsheet with all of your debts and minimum payments written out, allocate at least an additional $100 to the account with the lowest balance. This combined with the minimum amount due will help pay down that debt faster. Once that debt is paid off, take that payment and add it to the next debt with the lowest balance along with the minimum payment for it. For example, if you had a credit card with a $500 balance and the minimum payment was $50. Now make a payment of at least $150 until it is paid off. Then apply that payment amount to your next lowest balanced debt. For example, you have a medical bill for $800 with an $80 minimum payment. After the credit card debt is paid off use that payment in addition to your minimum payment on the medical balance – $80 + $150 = $230 until that is paid off. Then take the $230 and apply to the next loan. Each time you pay off a loan you’re taking that money earmarked for debt and paying off other ones quicker. It becomes a fun game when you start paying off stuff.

Habit 3 – Missing monthly payments and paying fees

Late fees and other banking charges add up! Knowing when payments are due and making sure you submit them is a big step to managing your money. Also keeping track of how much money you have in your account and planning for payments is a simple way to avoid these costly fees. Paying late fees and overdraft charges is money that could be used as a part of your debt reduction strategy. Review your finances each week to make sure you’re getting everything paid. Create a simple spreadsheet listing all of your expenses and when they are due. Then schedule a day each week to review and pay items that are due that week. Reviewing your schedule each week will help you feel in control of your finances and gives you peace of mind.

Habit 4 – Paying fees on your credit card for out of network ATMs

These may not seem like big dollars, but $4 here and $5 there could be money reallocated to your debt reduction strategy. Planning ahead for your cash needs when you’re by your bank or getting cash back from a store is a simple way to keep more of your hard-earned money.

Habit 5 – Looking at your available credit when making purchases

As you are paying off debt it can be tempting to purchase items you think you really want or need. The problem is reviewing your credit card’s available credit is not a strategy for making purchases. Unless you pay off your credit card every month, you’ll pay more for every item you purchase because of high interest rates. It takes discipline to save and pay for items with cash. When you do delay your purchases and pay with cash, you’ll have a sense of accomplishment and value the purchase even more. You may even decide that you no longer want or need what you thought was so important. Delayed gratification helps you value your money and yourself.

Start practicing these money habits and see how your finances change. You’ll have more clarity about where your money is going, feel empowered because you are in control of your finances, and have peace of mind knowing you’re taking care of yourself.

Leave a comment below about what habits are helping you.

Until next time, wishing you a wildly abundant week!

Jana Groscost


Jana is a metaphysical teacher, healer, writer, and speaker. As a retired tax accountant she passionately helps individuals and heart-centered business owners learn how to create financial success and manifest a purpose driven life.

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