5 Reasons You’re Still in Debt

debtMost people don’t like to be in debt, especially if it’s a large amount. Unfortunately even with the best of intentions, many of these individuals make little progress in reducing their debt. Here are five reasons that you’re still in debt.

No Budget or Plan

You’ve probably heard the saying, “If you fail to plan, you plan to fail.” If you want to reduce your debt load in the next few years, you’ll need a plan. It probably took you years to get so deeply in debt and spending the money was a lot easier than paying it back will be. Sit down with a list of all your expenses and create a budget you can stick to.

Just Gotta Have It
Most of us are used to just going out and getting whatever we want, when we want it, but that’s not how you live on a budget. When shopping, consider need and ignore want. Grocery shopping is probably one of the biggest areas of overlap between wants and needs. There are so many items that it’s easy to slip up and buy the costlier pre-packaged items. It’s best to make a list of needed items before you go shopping.

Paying for New Car Smell
Who doesn’t love getting a new car? However, unless you plan on keeping that car for a very long time, you could be wasting your money.

According to personal finance guru Dave Ramsey, a new car depreciates by as much as 70 percent in the first four years. If you paid $20,000 for your car four years ago, it’s now only worth $6,000. If that was a car loan and not cash, it’s even worse.

It’s much better news for the person who buys your used car though. He will get a four year old car for only $6,000 and should be able to use it for at least six more years.

Keeping up Appearances
Being embarrassed about your debt situation is pretty common. Everyone wants to keep up appearances. If you’re like most of us, you will never admit that you need to spend less in order to pay off your large debt load, or that it might be time to contact an organization such as nationaldebtrelief.com .

Unfortunately, an offshoot of this embarrassment can actually be overspending if you really try to hide the truth. The next time your co-workers ask you to go out to an expensive lunch that’s not in your budget, tell them that you’d love to but you can’t, you’re really serious about saving money for retirement, a boat, or a second home.

Involve the Kids
If your children are in elementary school or older, include them in the debt reduction process. You don’t have to tell them everything but definitely make them part of the solution and not the problem. Tell the children your plan for the family overall and ask where they think spending could be trimmed as well. You might be surprised by their answers.

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