10 Lies We Tell Ourselves About Debt

The post 10 Lies We Tell Ourselves About Debt appeared first on Penny Pinchin' Mom.

We all hear it repeatedly.  Debt is bad! But, when it happens, many of us try to pretend it is not that bad.  The truth is, we are lying to ourselves.

the lies you tell you about debt


While we know that this is how we should live financially, many of us just don’t listen.  Even I knew better and lead myself down a path of financial ruin (thankfully, I’ve recovered and will not allow it to ever happen to me again).

The thing is, I believed the lies and fell for the hype.  I did not listen to what the so-called experts had to say.  I just did what I thought was right based on what I was reading and had been told by others in my situation.  The sad truth is that I was just lying to myself.

If you are struggling with paying off your debt, these folks may be able to help:
Call 866-948-5666.

The thing is, debt is bad.  There is no other way to say it.  You don’t want it.  You don’t need it.  So why then, do we all continue to believe the myths and lies?  Perhaps it is because we just do not even know that is what they are.  Here are some of the lies I told myself when I was in debt — and hopefully I help you realize them too.




1. Debt is needed for my credit score

The thing is if you don’t need to borrow money ever again, why do you even need credit?  You may think that you can’t get a mortgage or a vehicle loan if you do not have a great credit score.  That is not true.  Many of them will, especially if you have no debt.

It has been years since we’ve been out of debt.  We cut up our cards in November of 2016.  Since that time, we’ve had a mortgage and one auto loan (which we paid off in just 4 months).  That’s it.  And you know what?  My credit is better than it was before I had the debt!  I’m in the 800 club now and proud of it.  I did not need a credit card to get there.  I did not need debt to build that score.

So, you may think you need debt to increase credit, but that is not the truth.


2.  Everyone has SOME debt

Nope.  Not everyone.  There are many Americans who have no debt at all.  Some do not even have a mortgage payment.  Just like I tell my kids “If everyone was jumping off a bridge, would you jump too?”  Of course not.  You have more common sense than to do that, right? Why then, do you think that just because everyone has debt that it is OK for you to have it too.

That was the way we thought about it.  We thought it was normal to have debt.  It turns out; we don’t want to be normal.  Maybe you should try it too.

Read More:  Creating a Plan to Get Out of Debt


3. I am not good with money

Sorry folks. That is not a good excuse. The internet has hundreds of thousands of resources available to help you learn about money.

If you don’t know about how to set up a budget, just Google it! If you are confused about how to set up a plan to get out of debt, you can Google that too.

We live in a time where information is quite literally at our fingertips.  The information is there.  You just have to go and find it.  No one is going to give it to you.  You need to do some work on your own.

Read More: How to Create a Budget (even if you suck at budgeting)


4. I deserve to spend my money

I agree with you on this.  However, you need to spend YOUR money.  Not money you do not have (which is what a credit card is).  If you don’t have the money in the bank to buy something, then you can’t just use a credit card.

It might make you happy in the moment when you buy it.  However, how will you feel when you are still paying for the expensive dinner out 6 months from now.  Probably not worth it as much when you look at it that way.

Read More:  How to Include the FUN STUFF in Your Budget


5.  We are in debt because of an emergency

I am not doubting anyone that sometimes, medical emergencies come up.  There are instances where you lose your job and must somehow get food on the table.  Those are emergencies.  These are things that you really did not know would happen.

Saying that you had to go into debt to pay your taxes is not an emergency.  You know that your taxes are due at the same time, every year.  That was a result of poor planning and is not an emergency.

It is essential that you have an emergency fund to plan for both the things you know are going to come up (such as paying taxes) and those that you may not expect (like the furnace going out).

Read More:  Ideas to Quickly Build Your Emergency Fund


6.  It was a great deal

The catch 22!!! Yes, we all love getting a great deal.  However, is it a deal if you are spending money on something you would not normally purchase?

This is all too common with people who start using coupons for the first time.  They see all of these little papers sharing savings on them and want to use them.  The sad truth is that many couponers actually spend more money when they start out than they realize.  They are trying to use every coupon.  However, if they are buying things they normally would not have on their shopping list, they are spending money just to save money.

The same is true with anything.  Just because you see that it is good deal or on clearance does not mean that it is the green light to go ahead and buy it.  Don’t spend just because.  Spend with a purpose.

Read More:  50 Ways to Save at the Grocery Store


7. I don’t have that much debt

Any debt is bad debt. It is the truth.  It doesn’t matter if you owe $50 or $50,000.  The fact is this – you have debt.  You have to take the steps on your own to eliminate your debt and change your way of thinking.


8. I just need to make more money

I don’t buy this one either. If you are already living beyond your means, what will more money do to help that?  Chances are you will live further beyond what you can afford.

More money is not a guarantee of not debt.  Look at stars who have had to declare bankruptcy because they have no money.  Just because you have more does not mean you can manage it well.

Learn to gain control of your money now – no matter how much you are making.  Only then, will a pay increase help you to pay off your debts.

Read More:  Defining Your Needs vs. Your Wants


9. I will start my debt plan next month

Why are you waiting? What is the reason? It is like a diet. People so often say they will start it on Monday and then come up with an excuse and say they will start the following week. Before you know it, 6 months have gone by and 6 more lbs. have been added to your waistline.

Start today. Don’t put it off. The sooner you start, the sooner you will be able to shout it loud – I’M DEBT FREE!


10. It is impossible to be debt free

I get this as I once thought the same thing. We were a one income family with two young kids and were struggling to live paycheck to paycheck. There was no WAY we could do it. I could not have been more wrong.

We talked to friends who were in the same situation and gained support from them. We knew we were not alone. Together we celebrated the little victories. The key was that we needed to remind ourselves that anything was possible. It took us 27 months, but that $37,000 in debt was gone before we knew it. And that was the best feeling in the world.

Read more about my family’s journey to become debt free.


Don’t fall for the hype. Stop trying to tell yourself these lies (and others you might be thinking about right now).  Only when you believe the REAL truth about debt will you be able to commit and work towards becoming debt free.

why am I still in debt

The post 10 Lies We Tell Ourselves About Debt appeared first on Penny Pinchin' Mom.

Source: pennypinchinmom.com

Bad Debt vs Good Debt

Bad Debt vs Good Debt

It’s almost impossible to get through life without taking on debt at some point or another. Between using student loans to go to college, taking out an auto loan for your first car or qualifying for a mortgage your first house, debt seems to be a part of most people’s lives. That’s not to say that you have to live with debt forever, but just you will likely be in debt at sometime.

Check out our mortgage calculator.

Unfortunately, it seems too many people have let debt become the norm and in general, people are no longer phased by carrying around a few thousand dollars of consumer debt or having student loan payments until they retire.

While having debt is never really a good thing (as in you owe someone money and are thus somewhat beholden to them), in the personal finance world, there are debts that are sometimes referred to as “good debts,” while others are considered to be “bad debt.”

In general, good debt is when you use it to buy something you need but can’t afford to pay for all at once, while bad debt is used to get something you don’t need and can’t afford. Good debt is also often associated with appreciating assets (things that go up in value) that add to your net worth. On the other hand, bad debt is often associated with depreciating assets (things that go down in value).

But sometimes figuring out the category for your debt and why can be confusing. Here are three types of debt commonly considered to be good debt and why:

Student Loans

The first debt many of us take on in our lives is student loan debt. Luckily, most people consider student loans to be good debt because taking on student loans to obtain a higher education often results in your landing a better career and therefore increasing your earning potential.

Try our student loan calculator.

It’s common knowledge that people with a college degree tend to earn more than those without a college degree, but what you decide to study can also have a huge effect on your earning potential. For people who study things that have a set career path, student loans may indeed be good debt and an investment into their future, but for those who choose to study something without many potential jobs, student loans may end up being just another payment they have to make each month. It’s a good idea to consider how long it will (likely) take you in your chosen field to pay off those student loans to see if it is really worth it.


Buying a home is often thought of as an exciting step toward becoming an adult, and for most that means taking on a mortgage. Mortgages are considered good debt because buying a house is usually seen as an investment. If the real estate market rises, you might be able to profit when you sell your home down the road. Plus, in the meantime real estate mortgage interest is tax deductible.

Business Debt

Starting your own business can be a very costly endeavor no matter what industry you are going into, and taking on business debt to start your own money-making operation is another form of good debt. Similar to student loans, business debt is supposed to be taken on to help you increase your future earning potential.

Bad Debt

Meanwhile, some examples of bad debt include credit card balances, auto loans and personal loans. These traditionally carry higher interest rates and so will cost you more in the long run. Sometimes you will hear (or read) people who don’t carry a balance on their credit card say (or write) that they are debt-free. Of course, if they have student loans or a mortgage, this isn’t technically true. But if you are prioritizing which debts to pay off first it is a good idea to start with the bad debt. Just keep in mind that all debt has to be paid back eventually!

Do you believe in good debt and bad debt? Why or why not?

Photo Credit: flickr

The post Bad Debt vs Good Debt appeared first on SmartAsset Blog.

Source: smartasset.com