10 Things Limiting You From Becoming Debt Free

If you are a regular reader of my blog then you know our financial story. Jacob and I got married in July 2015 and merged our finances. Together we were at a total of $80,000 of student loan debt. Since then, we have been living frugally, working a lot, and putting every extra dime we can to our debt. We have now paid off $74,000 and due to interest, we have about $13,000 to go.

In the last two years, we’ve given up a lot. We’ve said no to a lot of things. I don’t say this so that you’ll feel sorry for us and the modest lives we live, but just to show you that it’s hard. If you truly want to be debt free, you have to be dedicated! Here are some things that may be limiting you from becoming debt free.

1. Accumulating More Debt

This may sound ridiculous “why would you take on more debt if you’re in debt?” But people do it every day! Racking up the credit cards, buying a car with a loan when you still have a student loan balance… All of these things really don’t make sense. Getting out of debt is like digging yourself out of a hole. Little by little. And if you are going in more debt while getting out of debt, it’s like someone else is tossing dirt back in your hole while you’re trying to shovel it out. Stay focused on paying off your current loans and avoid going back debt at all costs.

2. Eating Out Often

Notice that I say often. It’s okay to treat yourself and go out for date night a couple times a month! But going out every day for lunch and 3 times a week for dinner means that you’re spending about $100 a week on food! To put this in perspective, Jacob and I spend $200 a month on all groceries. Save yourself some money and pack a lunch! Meal planning will save hundreds a month.

3. Gourmet Coffee

Similar to eating out, a Starbucks a day will cost you about $25 a week or $100 a month. I have nothing against Starbucks! I love my mocha as much as the next girl, but I only go when I have a gift card. I can’t bring myself to spend that much on a drink!

4. Cable TV

The average cable bill is over $100 a month. I love TV. The Bachelor, Fixer Upper and House Hunters are just some of my favorites. But the cost of cable is so expensive! Look into getting Netflix for about $10 a month instead. We have Netflix and absolutely love it. Lots of options and so much more affordable.

5. Lack of Goals

Simply put, if you don’t know where you’re going, how are you going to get there? Take the time to sit down and think though short term and long term goals for your finances and life in general. If you’d like to learn more about goal setting, check out my goal setting post here. Having no goals will keep your life stagnant. Yes, making $35,000 out of college isn’t too shabby, but where do you want to be in your career 5 years down the road? Reaching your income and career goals will allow you to apply more money to your debt each month.

6. Saving

Silly, I know. Saving is smart! You’re preparing yourself for stability. But if you have $20,000 in savings and $10,000 in debt, what good will that do? Overly saving isn’t smart when you have debts to pay off. Yes, do keep a modest emergency fund before paying off all debts, but then hit your debts hard before you bulk up your savings.

7. Extravagant Vacations

Notice the word “extravagant.” 🙂 I LOVE vacation. Put me on a beach for the week and I will be camper (jk. I don’t camp, but you can find me at the Hilton)! Our generation is so fixated on traveling the world, which is awesome, but honestly not the most realistic. I have heard a lot of early 20-somethings say “I have to go to Europe now because this is the only time in my life that I’m going to get to go.” No. If you make it a priority, you will get to go someday. Don’t sacrifice your finances now because you think this is your only opportunity. Yes, Jacob and I plan to go on a Caribbean cruise in October! We’ve been saving and looking forward to this vacation for almost a year now. But this isn’t a usual thing for us. Going on little weekend getaways rather than big vacations will allow you to pay off debts quicker. And planning your debt free vacation will allow you to have something fun to look forward to.

8. Housing

I can’t wait for the day that Jacob and I have a house that is fully ours that we own. But we also know that we want our house to be a blessing, not a curse. Your mortgage/rent should be about 25% of your income. Some people may have a mortgage or rent payment that is 50% of their income and they are therefore “house poor.” When a huge chunk of your income is tied up in your housing expenses, you’ll have no extra cash to pay off debt or even get to do fun things! Find a roommate, sell your house, or increase your income to obtain a housing payment that’s 25% of your monthly income.

9. Cars

Whether it’s a new car with a loan or an old car that’s not reliable, cars can be expensive! If you have a car loan, you’re spending at least a few extra hundred dollars a month. Imagine all the debt you can pay off if these expenses were non-existant! Buy a used, reliable car that will limit car care expenses. In the past 5 years, I’ve spent a total of $500 to keep my 98 Camry up and running. Not too bad!

10. Experiences

As millennials, we love to have experiences. It’s all about traveling, visiting the new trendy brunch restaurant, or happy hour with friends. But all of these things can add up. It is important to enjoy life and have shared experiences with friends, but make sure that you budget for these things to not go overboard. Give yourself permission to spend but also stay focused on paying off your debts!

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