When I paid off the last of my student loans in May of 2018, it was the first time I had been completely debt free (other than my mortgage) since I was in college. This means for roughly 25 years—more than half of my life at that point—I had lived with debt.
When you live with something for that long, it becomes invisible, like a bad smell you no longer notice. I had become debt blind.
And then, I wasn’t anymore.
I think my initial disgust toward my debt grew out of my lack of progress in paying off my student loans. I had borrowed around $38,000 for law school at an interest rate of 6.8% (reduced to 6.55% because I signed up for auto pay).
For years, I made payments toward that debt, sometimes paying extra, but the balance never seemed to go down: five years in, I had paid off only around $6,000 of principal, despite monthly payments of around $250. Seeing that balance made me sick at first. Then it made me angry.
Now that I’m debt free, I am amazed at the complacency with which I approached my debt. Why did it take me so long to want to get out from under it? Why did I not realize sooner debt’s impact on my ability to build wealth and save for retirement?
After a lot of soul-searching, I was able to identify eight lies that kept me in debt.
Lie #1: Being in Debt is Okay
When I say “being in debt is okay” is a lie, I’m not saying if you have debt, you are a horrible person. Or stupid or lazy. In fact, most adults in the United States are in debt: according to this recent Transamerica Retirement Survey, only 12% of women and 15% of men had no household debt.
What I mean is that debt is not benign.
The financial implications are obvious. You pay interest on what you owe and, depending on the rate and the size of the debt, can end up paying many times over what you originally borrowed to retire it.
If pressed, I would probably have acknowledged the high financial costs of debts but not its effect on my mental health. And doing so kept me in debt.
Lie #2: Being in Debt is Inevitable
I don’t know how it so quickly became the norm in the United States to live with consumer debt—heck, a woman couldn’t even apply for a credit card in her own name until 1974—but I do know that it never occurred to me that I should deny myself something I wanted simply because I didn’t have the money at hand.
This is especially true because I didn’t want a $50,000 car or an $800 pair of shoes. I was happy to shop at Kohl’s or Target or Home Goods, and stick to the sales rack at Macy’s.
And because I only bought reasonably priced goods, it was easy to dismiss the fact I had to take on debt to purchase these goods. If I couldn’t be a reasonable shopper and not have debt then debt was just inevitably going to exist in my life. Debt was a by-product of living. Debt was inevitable.
At least, that is what I told myself. Now, I know debt is not inevitable.
Lie #3: Progress is Enough
Don’t get me wrong, making progress is important. As I wrote here, if becoming debt-free can’t be your goal right now then progress is all you can ask of yourself.
My problem was that I was in a position to live without debt so me telling myself that progress was enough enabled me to keep spending more than I made. Sure, I may have been overspending by a smaller amount than before, but I was still overspending.
Accepting that progress was sufficient fed my bad spending habits, which kept me in debt longer.
Lie #4: I’ll Tackle My Debt When I Get My Next Raise
Planning to increase the amount you pay toward your debt when you get a raise is a great thing, and I definitely encourage it. What’s not so great? Jacking up your spending before a raise, knowing you will soon have a bigger paycheck.
As a self-professed spreadsheet junkie, I would use my skills to create elaborate tables estimating down to the penny what my paycheck would look like after my next raise. And somehow, knowing that I would be able to start paying more toward my debt on a certain date made it okay to take on more debt.
I’m not saying it makes sense but it happened year after year so it was a lie I had somehow adopted as logical. Sadly, because it gave me permission to keep buying stuff, I accepted it without thinking too deeply about it.
Lie #5: Shopping Makes Me Happy
For many, many years, I thought shopping made me happy. I could even point to evidence to support this belief, such as how much I would look forward to shopping and the rush of pleasure I would get at checkout.
This “evidence” explains why it took a three-month shopping ban during the Summer of 2016 for me to really understand what was actually going on. Turns out, it wasn’t shopping I loved but having something to fill the time so I could put off taking a hard look at my life.
I was also surprised to learn that the pleasure in seeing my credit card balances go down and stay down far surpassed the pleasure of purchasing new items.
Shopping may have caused a temporary sensation of happiness, but it was not even close to the happiness I found in not shopping. And that was something I never would have predicted.
Lie #6: I’ll Just Work Longer
This isn’t actually a lie. In fact, it’s 100% true: staying in debt would have inevitably resulted in me having to work longer. Possibly years longer.
The lie was believing I’m in complete control over when I stop working.
I may work until I am old(er) and gray(er). I may retire from W-2 employment at age 50 or 52. Either circumstance is fine but setting myself up to need to work until I am in my late 60s (or later) is a recipe for disaster.
I could lose my job and have trouble finding a new one. I could get sick and not be able to work. I could have family responsibilities that make it hard to continue to work full time. Or, I could just be tired and not want to work anymore.
Telling myself I could just work longer to make up for my out-of-control spending ignored these possible realities. Now, I have choices.
Lie #7: But I Need [Fill in the Blank]
I don’t know why I found it so hard to distinguish between a true need and a want but it was certainly something I struggled with.
Sometimes I “needed” something for the kitchen, or a decorative item for my living room. Other times, I “needed” yet another pair of black flats. Looking back, I think my criteria was simply would the item be useful to own either now or in the future.
This, of course, is a terrible measuring stick to apply because it’s way too vague. And it can be used to justify purchases that the math will never support, such as spending $120 on a smoothie maker that my history with kitchen appliances tells me I am likely to use no more than 4-5 times before it’s tucked away in a cabinet and eventually donated (true story!).
If you have this problem too, admit it and figure out a solution, whether it’s a waiting period between when the desire to purchase something strikes and actually purchasing it—I highly recommend turning off the one-click purchase feature on Amazon—or using a flowchart to help you decide if the item really is a need.
This doesn’t mean you will never buy anything frivolous ever again. But it will help you be more honest with yourself about why you are purchasing that item.
Lie #8: It’s Not Like I’m Splurging on Expensive Stuff
To be honest, I still struggle with this one, thinking that it’s the big purchases that will get me into trouble and that I don’t have to sweat the smaller ones.
The difference is that since I now track what I spend money on each month, I can no longer claim ignorance when a little bit here and a little bit there quickly adds up to being a whole heck of a lot everywhere.
Remember that it only takes 10 purchases of $50 each to total $500. If that’s the total amount you have budgeted for groceries in a month, and you tend to spend at least that amount each time you going into the grocery store, I recommend being more strategic when it comes to walking through the door.
That’s what I had to do with Target. After realizing just how much I was spending there, my weekly trip is now a monthly and sometimes even a every-other-month trip. And it’s made a big difference!
Do Any of These Sound Familiar?
Are any these lies keeping you from tackling your debt? What truth can you acknowledge today that will help you move forward? Let me know in the comment section below!