Why So Many People Fail at Becoming Debt Free, Part II

debt free

Please welcome back our usual Thursday contributor, Laurie from The Frugal Farmer.

Welcome back for part 2 of ‘Why So Many People Fail at Becoming Debt Free.’  You can find the first part of this post here.

For years we tried, (or so we thought) and tried to get out of debt.  Most of our efforts would end up with us simply giving up after a couple of weeks, or, if we succeeded in paying off our consumer debt, we’d get prideful and fall back into debt, spending “only a few” hundred, or thousand dollars, telling ourselves that we’d have it paid off “in no time” or that it was okay because “most people” had much more debt than we did.

The real eye-opener for us was when we made a serious effort to become debt free in 2012.  Or what we thought was a serious effort.  The years 2010 and 2011 were marred financially for us by a 7-month layoff and then by attempting to survive on 80% of our previous income, when we’d been living paycheck-to-paycheck on the whole 100%. What followed was an ever-increasing load of debt that culminated in a huge breaking point near the end of last year. We had been in denial long enough, and we knew we were in trouble. We also knew that we were at a crossroads: if we didn’t get our financial life together now, we likely never would.

So in January of this year, we began our long, tedious road to living debt free.  And we’ve also finally figured out why we failed to become debt free so many times in the past.  Today I’d like to share some more of what we learned about why people fail to become debt free.

1. OMG – Now I Knew Why We Weren’t Debt Free

In 2012, we made a concerted effort to spend less and get out of debt, yet, we really didn’t do much – we only put $6,000 toward our total debt level, mortgage included.  As we began our “serious” getting out of debt journey this year, I thought it wise that we go back and look at what we spent our money on in 2012, to help get an idea of where we might have been wasting our money and why our debt payoff journey had been taking so long.

What I found was shocking.  Our “less spending” year discretionary expenses amount was absolutely unacceptable.  We were spending $175 a month on entertainment, I was spending $205 a month on gas (I’m a stay at home mom) and our grocery bill was roughly $900 a month.  With the revelation of those numbers, I got nauseous real quick.  If we were blowing this much cash in our effort at spending less (and we truly did spend less and say “no” to ourselves a lot that year), what on earth did our spending look like during the previous 15 years of our marriage???  It was now becoming very clear to us why we had struggled so much financial during our marriage.

What we learned real quick was that spend-tracking is a crucial ingredient in any debt payoff journey.  You must know where your money is going if you are going to learn how to manage it successfully.

2.  Lack of Respect for Money

Note that there’s a difference between respecting money and idolizing money.  Idolizing money means that money leads your decision making and trumps the emotional needs and/or physical needs of yourself or your family.  Respecting money means that you value, in a healthy way, the money that comes into your life, and that you spend each and every dime based on what’s best for your family and yourself. Before our great awakening, we simply could not figure out why our finances were such a mess. We didn’t take vacations. We didn’t buy new furniture, or fancy clothes. We hit the clearance racks when we did buy stuff. We didn’t drive new cars or buy gadgets or toys for ourselves.

Toys for the kids were limited to birthday and Christmas, and even then we spent much less than most people do on gifts. Yet, we never had any money and kept increasing our debt load.  Why? Because we were nickel and diming ourselves into a massive debt hole. We spent a good $200-$300 a month on going out to eat, but because that money was going to the snack bar at Target or a fast food joint, we viewed it as “just a few dollars.” The problem came when we spent those “just a few dollars” several times a week. We were spending $200-$300 in gas costs for me as a stay-at-home mom because driving was a “necessity.” Although we had a grocery budget and menu plan, we would regularly make extra stops at the grocery store for “just a few things,” adding 50% to our “budgeted” grocery money each month. Because this was for food, we viewed it as a “necessity.” But we had to learn that chips and ice cream just because we wanted them isn’t a food necessity.

We didn’t respect our money enough to really think about what we were spending it on. We didn’t equate that extra trip to the grocery store with my husband having to work one more hour that week, or delay retirement by X number of years. Any successful getting out of debt journey has got to start with learning to have a healthy respect of money.

3.  Lack of Addressing the Issues Behind the Spending

Why do people spend more than they should? Sometimes it’s because of ignorance or lack of respect of money, as I mentioned in the last section. Sometimes it’s due to trying to fill an emotional void. Or maybe it’s pride, as in “The Joneses” (or my brother, or my friend, or my neighbor) has A, B and C, I should be able to buy those things too! Whatever the reason, it’s crucial for living debt free to uncover and addresses the issues behind all of your spending.

Case in point: In our old suburbia neighborhood, all “good” parents had their kids involved in extracurricular activities.  Of course we wanted to be considered “good parents,” so we immersed our 3 girls heavily into life at the local dance studio. Now, there’s nothing wrong with signing your child up for dance or any other extracurricular activity, provided the reasons behind it are valid. Although the girls loved dance classes, our reasons for putting them there were wrong; we were doing it because it was the thing to do. Our former suburb had set it as a standard for parents, and we fell into the trap, even though we really couldn’t afford it. It’s not like we weren’t paying cash for the lessons, but if we would’ve sat down and researched our debt load and assessed our spending habits, we would’ve quickly come to the decision that dance was being cut from the budget. But instead, we focused on how important it was to be “good parents” by involving our children in activities. We’ve been out of dance for three years now (ironically, we quit for reasons other than money) and you know what? The girls are still happy and healthy, maybe even more so now than they were while in dance class.

If you’re going to go on a successful journey to living debt free, it’s crucial to address why you’re spending the way you are and to clear your head of any misinformation that might be leading you to spend unwisely. So that’s it. I hope the info here and in last week’s post will help you to get a clearer vision of what’s needed to get you and your family on the road to a debt free life.  You deserve it. :-)


Have you diagnosed your roadblocks to becoming debt free?


Photo courtesy of: Images_Of_Money


If you enjoyed this post, please consider subscribing to the RSS feed.
The following two tabs change content below.
I'm the founder of Frugal Rules, a Dad, husband and veteran of the financial services industry. I'm passionate about helping people learn from my mistakes so that they can enjoy the freedom that comes from living frugally. I'm also a freelance writer, and regularly contribute to U.S. News & World Report, Investopedia, Credit Karma and more. If you're wanting to learn how to monetize your blog, check out my blog coaching services to see how I can help you take your site to the next level.

Latest posts by John Schmoll (see all)


  • Great points, Laurie. It’s going to be different for everyone. Some people fall into keeping up with other people’s spending, others want to be “good” parents, etc. Whatever it is, if you don’t recognize it you will never be debt free. I also want to point out that despite not having kids I have thought recently how insane youth sports have become. People I know who have kids sometimes spend entire weekends going to various tournaments and practices. I don’t see how they ever have true “family” time.

    • DC, you’re so right about the overdo on youth sports. Lots of times too, these kids end up so overwhelmed and burnt out that they break. No teenager should ever suffer from that kind of pressure. Spending that quality family time on a regular basis will give kids a much more secure future, emotional-wise, than having excelled at 15 different sports will. Glad to see you recognize that, as it will make parenting lots more enjoyable for you guys if you choose to go that route..

  • Keeping up with the Joneses can really put yourself and your family into too much debt. And doing things for the wrong reasons can too. So, think before you act or do something with your hard-earned money and learn to live below your means if you could.

  • Yes, yes and yes! For me, número uno was one of the biggest factors to finding myself debt free. When I saw how wasteful I was spending (and had no idea) I felt exactly as you – sick to my stomach. It’s an eye opener.

  • It’s a huge wake-up call, isn’t it, Taynia! We have to work real hard at not beating ourselves up for all of those years of wasteful spending.

  • Another excellent post, Laurie. You have addressed some key points here.

    I especially thought the distinction you made between idolizing money and respecting money was a key one. Your idea about addressing the root cause for overspending is also essential, yet often neglected. Problems must be dealt with head on and honestly if they are to be resolved. You have done a wonderful job here, Laurie. Kudos.

  • Matt Becker says:

    I love your point about respecting your money. I think many people who try to take this path fall into the trap of viewing spending as “evil”, when it’s anything but. Spending money on things you truly value is both fun and fulfilling, but if you don’t have respect for where that money came from you’re more likely to spend it on things you don’t value. That’s a really important point.

  • Those are all very true and excellent points. I am really going to have to think about the kid activities. We try to sample just about everything that is available, but are we doing it for the right reasons? I was a very shy child. I’m not sure our daughter will be, but I’m hoping some of the things we are doing will give her self confidence, but you probably don’t need dance lessons to learn that.

    • I think it’s always good to evaluate those extracurricular activities. As I mentioned in the post, the activities themselves are not bad in general, but often times we don’t think about why we’re doing them. Dance taught my girls a lot about keeping yourself flexible and in shape, and about being able to do a routine (synchro type of routine) with others, but it also put some pressure on the girls to look and act a certain way, and that was largely our fault, because we fell prey to the pressure to keep up with what others said was expected of us. Thanks for sharing your thoughts, Kim. :-)

  • I can totally relate about the grocery bill. That is an area where we’ve always struggled. I have to really watch out grocery budget as the month progresses or I go overboard! =/

  • Interesting post.
    The reason why I decided to tackle my debts was because I just felt that I wasn’t “winning” at life.
    I’ve have the right education, qualifications, understand money and how it works like the back of my hand – but never understood debt – and how it just sucks you in.
    Its the temptation of having something NOW. And I was such a sucker for that. I always thought that I would have the money to pay it off – its just that now i have to pay off a lot of stuff that hasnt really made my life better at all.

  • For us, the big money drain was Target and Bed Bath and Beyond — I would always buy something “for the house” whenever I went, and the more I went the more I thought we “needed” something. Now I only go to Target once every few months and only go to the customer service desk at BBB to exchange a SodaStream cartridge, so I don’t see what I’m “missing” from my home. Ignorance is bliss!

    • Oh, I SO fell into that trap, Rebecca! You’re right about ignorance being bliss too. Now that I’ve stopped looking at the ads and commercials, and stopped shopping when I don’t need to, we are spending SO much less money. :-)

  • Romona (@monasez) says:

    I had the same issues of using credit and saying oh I’ll pay it off. The last straw for me was this year. I paid $1000 on my card in may and had a very low balance and then by July I ran my card back up again. So it feels like I wasted money which really sticks but I enjoyed reading about your experience. Very insightful.

  • Michelle says:

    We are usually pretty bad when it comes to food spending. It is something that we really need to start paying more attention to.

  • Great points Laurie. Looking back and learning from our mistakes and successes is so important in defining our future goals. I tend to be a forward looker, but often at the expense of missing an obvious lesson from the past.

  • Great post Laurie! You know I still slip up and don’t respect my money from time to time, like yesterday I bought a 64 dollar sweatshirt (I didn’t even look at the freaking price!) because it was super cute. Not that there is anything wrong with that, but my freelance work has slowed WAY down and I’m already over budget this month because of my trip. WTH Tonya! So I’m returning it today. I know the absolutely nauseous feeling you were talking about when it comes to thinking about how much money you spent/wasted in the past. When I think back on my old debt’s interest I was paying, or just like you said, nickle and dining yourself to death, it makes me kind of ill. But, we just have to be optimistic and move forward from where we are right now.

    • Clothes are a tough spot for me too – I bet that sweatshirt was SO cute. For $64, it just had to be. :-) I’m completely in awe that you have the strength to take it back – I’m not sure I could be that strong once I had it in my possession. :-)

  • When we were paying off our consumer debt, our biggest roadblock was eating out because it was my wife’s first year of teaching and all I could cook at the time was microwave meals. We now limit going out to restaurants to 2-3 times per months which saves us a ton of money.

  • Great post, Laurie. I particularly like how you differentiate between idolizing and respecting money. Money brings out a host of emotions in people but at the end of the day, it does boil down to respecting money and yourself. Too many people, unfortunately, want to accumulate gobs of money as proof that they “made it” or are better than others. One that I learned after 20 years as a financial advisor, it really isn’t the amount of money you have – it’s what you do with it that matters.

    • You are so good at teaching about the emotional part of money, Shannon. It really can do a number on your feelings if you let it, but once you kind of separate yourself from the “draw” of money, it’s so much easier to make wise spending choices.

  • anna says:

    I completely agree with spending-tracking – it was kind of crazy (and embarrassing) how I low-balled all my estimations of what I usually spend. Being conscientious about the amount and the reasons behind the spending were key – excellent post as always, Laurie!

  • Yeah…. I’m glad you finally woke up to the futility of that old lifestyle. Hopefully you can keep the cost down in the future as well. good luck!

  • Mackenzie says:

    It’s the little things that add up debt quickly. “Just a few dollars here or there” was how we rolled. It’s a tough cycle to break, that’s for sure.

  • Well put. Looking at historical spending HURTS! But it’s like surgery, and once you get the extra crap spending out, you can get sewn up and begin the process of financially healing. But you don’t even know you need surgery until you look at what’s your spending is on the inside…..ok, that metaphor didn’t really work. But you get the point.

    All that to say….cool post :)

  • Jim says:

    Great post, It is amazing how eye-opening your frivolous spending can be if you let it. I have been tracking it this year and because of my tracking, have been able to curb this spending category. Thank you for sharing your personal experience!

  • Mel says:

    I completely agree with #2 – although I had never associated it with respect before, I had the worst habit of nickeling and diming myself to death. I work in entertainment and live out on the road most of the time, so the cost of eating out becomes astronomical, but so easily rationalized as just $5 here and $10 there. I mean, it’s not like a drive through is the same as a sit down dinner somewhere, right? ;o) Anyway, that’s what I thought for the longest time until I kept track of it for a few months and literally felt like I was throwing my money away.

    Awesome post! Such great insights to the psychology of debt. Thanks for sharing!

    • That’s exactly what happened with us, Mel. It’s amazing how quickly a person can indeed go broke spending $5 here and $10 there, isn’t it? I wouldn’t have believed it until we analyzed our own “minimal” spending habits. Thanks for the comment!

  • I don’t have debt anymore, because after my short stint with credit cards when I turned 18 landing me in the hole, I don’t want to touch a situation like that again with a 50 foot pole. But when I got into all of that credit card debt, it was because I was an insecure 18 year old trying to fit in with my peers at college (1st year) and thought I needed clothes and gadgets to do so. Turns out not!

  • dojo says:

    I think that again we made all these mistakes ourselves. We’re now more mature when it comes to money and spending, we budget and save, even if it doesn’t make us ‘unhappy’ or feel limited. Tracking expenses is one of the biggest wake up calls anyone can have, this really shows where your money is going and most of the time the ‘small expenses’ amount to some insane money

  • Yeah, the “just a few dollars” is my failing point as well. It’s hard to be strict about spending when you have the money.

    The solution that works for me is to pay myself first and “hide” the money. By carving up my income into different accounts for different purposes, I induce a steady state of survivable money stress by seeing the bill paying account is right there on the edge. Sure I have the money elsewhere that I can pull, but by forcing myself to live within that narrow financial constraint, it makes every spending decision just that, a decision, rather than a reflex or bad habit.

  • I think the reasons vary for everyone. But I’m sure that four important tips can be of great help. One is documenting, the second is acknowledging, third is planning and fourth being the most important is actually doing something about it. It is one thing to know and list down everything, but is a completely different story to accept the facts more so to plan how to deal with it. Now once you’re done with these three it is the action that counts.

  • I think lack of self control is one of the biggest contributor here. We often forget about spending less and spending from the current income, not from future income is the thing to do.

  • David Smith says:

    It is really very difficult to be debt-free. That is why many people fail in their efforts. Nonetheless, we should all work hard to achieve this goal. Perhaps, our failure is caused by refusing to understand issued behind reckless spending. This is something that we need to focus on and hopefully be rid of debt in the future.

Leave a Reply

Your email address will not be published. Required fields are marked *