5 Factors that Prevent Debt Payoff

The Battle to Eliminate Debt 

Debt can go from an inconvenience to a disaster if left unmanaged.  And even once the struggle has begun to eliminate personal debt, it can feel like a futile endeavor.  Some things just get in the way.  Here are a few things to look out for when trying to be diligent to pay off debt. 

Quick-Fixes 

There are so many so-called easy fixes to get rid of debt, and they are very rarely a good idea.  Sometimes an idea is a good one for a certain situation, but without other factors such as self-discipline and high income, they will not work.  Avoid the simple solutions such as refinancing debt or consolidating.  These can lead to higher interest rates or hidden fees which only exacerbate the problem.  Transferring balances, debt “relief” companies, payday loans – look out for anything that sounds too good to be true, because it likely is. 

Insufficient Income 

Another obstacle – and this can be hard to face – is an impossible debt-to-income ratio.  A person just may not make enough money to pay off all their debts.  The interest rates may compound, other bills come up, and there is just not enough money left.  If this is the case, then it is time to start reconsidering one’s employment, or at least lifestyle.  Debt will destroy if left unchecked, do not be afraid to buckle down and work extra hard for a little while to relieve the pressure. 

Personal Issues 

Sometimes there are people or obligations in life that make paying off debt impossible.  Perhaps a husband or wife is not on board with paying off debt and keeps opening credit card accounts.  Maybe there is a sibling or parent that is terrible with money and has a few scruples that has become a drain on the family.  Paying off debt requires maturity and honesty with loved ones.  Handle those issues first and things will go a lot smoother. 

Unexpected Expenses 

Life happens, accidents happen, traffic tickets happen, natural disasters happen.  All of this costs money and can wreck the debt plan.  This is why an emergency fund is so critical.  Having some money set aside while paying off debt will make it easier to absorb a blow.  And if the plan needs to be put on hold to pay something off, just pick it right back up when the crisis has ended. 

Unrealistic Lifestyle 

Finally, the most common obstacle to paying off debt is an unrealistic lifestyle.  Spending minimal money on groceries and wearing the same clothes everyday would free up a ton of money to pay off loans – but most won’t do that.  And it goes up from there.  If there is a certain level of lifestyle that a person “must” maintain, even if they cannot afford it, then they will sink further and further into debt.  It takes humility to become financially secure.