4 Money Mindsets Keeping You Trapped In Debt

Carrying too much high-interest debt can cripple your entire life. 

It causes stress in families, limits your life choices, can keep you trapped in a job you hate and holds you back from living your best financial life. 

I’m talking about debt like credit cards, car loans, personal loans you took out to pay for furniture, your wedding or a holiday. Debt that is bringing nothing back to you except interest and worries!

Can we agree that the stress of too much debt sucks? Yet many people struggling with debt form ideas and habits about it to stop themselves from moving forward and getting free. 

If any of these mindsets ring true for you, consider this a debt wakeup call! 

I’ll deal with it later 

When it comes to mounting debt issues, the old saying “ignorance is bliss” does definitely NOT apply.

A storm of financial problems is whipping up around you while you’ve got your head stuck in the sand. The only way out of the problem is to deal with it now, not later. 

More than just prolonging the general stress of your situation, choosing to deal with your debt later has a big missed opportunity cost.

Let’s say you’ve got a few credit cards with a combined balance of $10,000 and an interest rate of 18%. 

If you only ever made the minimum repayments, starting at $203 for the first month, it would take you 43 years and 11 months to repay the debt. 

More than 4 decades!

And, you’d pay a total of $36,332 – that’s $26,332 in interest.

(Source: ASIC Money Smart Credit Card Calculator)  

Stick with minimum repayments, and your $10,000 debt has a missed opportunity cost of $26,332 – not to mention decades of it hanging over your head. 

Everyone has debt – it’s normal! 

You have to reject the ‘everyone has debt’ mindset – this mentality will be the slow death of any dreams you have of reaching real financial freedom. 

If you’ve just accepted that your life will always be overshadowed by debt and that you’ll always be making those minimum repayments you’re trapping yourself with excuses. 

Debt is only normal if you think you don’t have other options. 

And when did being normal ever help you live the life of your dreams?

I encourage you to get inspired by other people who were once burdened with debt – often huge amounts – and dug themselves out. 

A quick google search “inspiring stories of getting debt free” brings up tales from every corner of the internet of people for whom being in debt is NOT normal.

Google, get motivated and take action…NOW.

I don’t want to ‘go without’

And it doesn’t suck to have a big ball and chain of debt hanging around your neck?

Depending on the number of loans you have and how quickly you want to pay it off, big lifestyle changes might be called for.

When you’re faced with the fact that you might have to ‘go without’ some of your usual activities, purchases, and luxuries; your mind might scream Noooooooo!

For many people, not wanting to go without (whether it was the big house, the trips overseas, or the expensive new phone) is what got them into debt in the first place. 

Doing what it takes to pay off loans might not be easy but it doesn’t have to be terrible either. You need to stay focused on the end goal – freedom from debt!

Grab a piece of paper and divide it in half. 

On one half, write out how you feel right now about the debt you have and how it’s impacting your life:

• Always fighting with my partner about money
• Feel guilty buying anything – but I still do it
• Shame and embarrassment 
• Feeling trapped and having trouble sleeping at night
• Every time a bill arrives I feel sick in my stomach
• I’m a failure

Then, spend a few minutes really visualising what it would be like to be debt-free. 

Forget for a moment that it feels ‘impossible’ and just imagine how you’d feel not owing ANY money to anyone. 

Now, on the other half of the paper, write how you’d feel being debt-free! Write it out as though you’ve already paid off your debts: 

• With no more repayments, I’ve got money to save or invest every month
• I’m sleeping so much better
• My partner and I aren’t fighting anymore – we even have money for a weekly date night
• I’m excited about NEW financial goals 
• I’ve dropped those extra 3 shifts a week at work – more time with my family!
• My family is more financially secure than we’ve EVER been

I don’t know about you, but moving from that depressing In Debt list to the joy and freedom of the second Debt-Free list is worth making temporary sacrifices for. 

What’s one more purchase, card, loan? Add it to the pile!

If you’re already carrying a bunch of high-interest debt, it can be easy to get stuck in the mindset of – what’s one more thing going to matter? Add it to the pile.

But it does matter. It matters a whole lot.

Every dollar you add to your debt now is a dollar (plus more – hello interest!) you’re relying heavily on your “future self” to be able to deal with.

We’re often highly optimistic about what our “future self” is capable of:

• Next week I’ll start that detox, no excuses! but today, I’m just going to order the burger
• Next pay I’ll be able to save $300, so I’ll just buy this jacket now
• Next month I’ll ask for more shifts at work so I can cover all my repayments, but this week I’m too busy 
• Tomorrow I’m waking up at 6 am to hit the gym, but today, I’m sleeping in

I think we put a little too much hope in our future selves – especially with finances. 

If you think the future you will miraculously have the capacity to deal with another repayment, you’re probably kidding yourself. 

Keep adding to the pile and your future self will just be more saddled with debt and have less capacity to pay it off. 

Each expense may not seem like a lot on its own. The grand total of your debts can make life harder for your current and future self.