Why So Many People Fail at Becoming Debt Free

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debt free

Here in the PF blogging world, we’re surrounded by people who either have or are working to become debt free.  We know that this is the norm in our little world, but almost all of us also know a not-so-small handful of people who have tried, failed and given up at becoming debt free.

So what’s the difference between those who make it to debt free and those who don’t? And how can you be sure that you’re one of the ones who will achieve your goal of becoming debt free or wealthy? Consider these reasons for failure, and then make sure you don’t fall into these sabotaging traps:

1. Lack of Education Doesn’t Help You Get Debt Free


So many people decide that they want to be debt free, or wealthy, without having any idea of what they’re doing.  t sounds pretty simple, in theory: you pay off your debt, and then you save/invest money, right? However, without the proper education, you’re setting yourself up for failure before you even get off the ground.

Just like you wouldn’t drive a car without first learning about the rules of the road and of the vehicle, it’s important not to jump onto your road to becoming debt free without learning how to navigate it. Like any goal, the road to being debt free is full of potholes and roadblocks.

A good personal finance education will help you to be aware of what to expect on your journey, and will help you know how to navigate around those bumps in the road. Make the smart choice to read about what successful people have done to make it to debt freedom before going on that road yourself.

2.  Lack of a Plan


If you’re planning on heading on a cross-country trip for the first time without your GPS or map, you’re likely heading for trouble.  Surveys have proven that successful goals are SMART (Specific, Measurable, Attainable, Realistic, Timely) goals.

If you’re jumping on your path to debt freedom without specific short, medium and long-term SMART goals, you run the risk of giving up due to a feeling of being lost in the woods. No matter how minute they may seem, make a plan with goals that work for you and your specific situation before you start your debt payoff journey.

Your first short-term goal may be as simple as “Make a budget and stick to it” but that small goal is a very crucial part of achieving long-term success.

3.  Lack of Understanding


Another reason that so many people fail at their goal to become debt free is because they don’t understand the magnitude of their debt. People with a large debt load often fail to see that trouble could easily be lurking just around the corner.

One job loss, one large medical bill or home repair bill, could quickly change their situation from paycheck-to-paycheck into “we’re losing the house.” It’s vitally important if you’re contemplating a journey out of debt that you understand why it’s so very important that you rid yourself of the debt.

Sit down and take a good, long look at your current debt situation, fully grasp the magnitude of the dangers of living with a large amount of debt, and gain the understanding you need that will keep you on track with the goals you’ve set.

4.  Lack of Vision


This is likely one of the most important parts of a successful journey to living debt free. Whereas a good understanding of your debt will motivate you through fear, a good vision of your life without debt will motivate you through excitement. First on the list to obtaining vision in this area is to write down what you will do when you are debt free.

How will your life change? Will you be able to leave a job you hate? Provide a better education for your children? Travel around the globe? Once you get a vision of your debt free life, use it to be the deciding factor in all spending decisions.  When you’re faced with that potential latte’ order, use your vision to decide what’s more important to you: that short-term “yum” factor, or the long-term “traveling” goal.

You’ll likely quickly decide that being able to retire at 55 instead of 65 is well worth giving up the latte’, provided you’ve done a good job of establishing your long-term vision of the good life in your head.

By following the above guidelines and making a plan today (or at least the beginnings of one) you can make sure that you’re one of the ones who succeed at your goal of becoming debt free!


What are your “must have” tips for making sure you achieve your financial goals?


Photo courtesy of: Images_Of_Money

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John is the founder of Frugal Rules, a dad, husband and veteran of the financial services industry whose writing has been featured in Forbes, CNBC, Yahoo Finance and more.

Passionate about helping people learn from his mistakes, John shares financial tools and tips to help you enjoy the freedom that comes from living frugally. One of his favorite tools is Personal Capital , which he used to plan for retirement and keep track of his finances in less than 15 minutes each month.

Another one of John's passions is helping people save $80 per month by axing their expensive cable subscriptions and replacing them with more affordable ones, like Hulu with Live TV.

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  • Taynia | The Fiscal Flamingo says:

    This is such a good list Laurie. Espesh #4. As I like to preach, “You gotta know your why!”

    • Laurie @thefrugalfarmer says:

      Love that quote, Taynia! It certainly has been a driving force for us. Thanks for sharing your thoughts. 🙂

  • DC @ Young Adult Money says:

    Great tips, Laurie. I love the education analogy. For example I work in health insurance and you don’t become an expert overnight. There’s a lot to learn and unless you put in the time and effort day after day you have no idea how everything works. In a similar way, you need to actively learn about personal finance and strategies for paying down debt if you ever hope to get rid of your debt.

    • Laurie @thefrugalfarmer says:

      That’s a perfect example, DC! Personally, I can attest to your statement here because I’ve been reading PF books for years, and reading PF blogs for over 9 months now, and I still learn something new every single week. There’s much to be mastered!

  • says:

    Lack of understand and vision are great points Laurie.

    I think its the mental block and a lack of understanding specifically of the hard figures (and the related math) that is the greatest obstacle to people paying off debt.

    • Laurie @thefrugalfarmer says:

      I would agree, Moneystepper. For us, that was a roadblock for years. We knew where we wanted to go, but we didn’t know how to get there. Great points!

  • Catherine says:

    Great post Laurie. Another big point is that these steps take time and that alone can be a point of frustration for a lot of people!

    • Laurie @thefrugalfarmer says:

      Catherine that’s an excellent point! I know for us we’ve really had to focus on the fact that we’re moving forward, in spite of the fact that the forward movement is slower than we’d like right now. It’s been tempting at times to give up, but that’s where we need to really push that frustration to the back burner and focus instead on the progress.

  • dojo says:

    1. everybody is doing it – years ago, being in debt was frowned upon by many. Now everybody’s doing it. Why bother being ashamed, if it’s the norm for most people?
    2. instant gratification – we don’t wait till we save, we need that new PC NOW
    3. credit is pushed on us – advertised, made to look cool. Do you want something new? No problem, you have at least 4 credit cards. Even dogs can get credit cards 😀
    4. lack of determination and consistency – just as in weight loss. I cannot believe that, in this age of information, people don’t know what needs to be done (eat healthy + exercise for weight loss, stop spending like crazy and start saving for getting debt free and then secure your future). We all know the drill, but few actually go all the way

    • Laurie @thefrugalfarmer says:

      Excellent points, Dojo!!! Especially regarding #4 that you wrote, I think numbers 1, 2 and 3 are the cause of #4. It’s SO much easier to excuse behavior away by saying “everyone’s doing it” or “it’s too difficult because I want it NOW”. Thanks for sharing!

  • Froogalist @ says:

    Nice post, Laurie. You have put a lot of thought into your ideas and have articulated them very clearly. Solid advice for all who want to become debt free

    In cases of chronic overspending that lead to debt, I think it is also important to examine whether or not there is an underlying cause (e.g. lack of self-esteem, lack of happiness, feelings of inadequacy, etc.,). If the underlying cause is not acknowledged and dealt with, the problem of debt will threaten to return time and time again. Of course I am not talking about all people with debt; I am referring to chronic overspenders.

    • Laurie @thefrugalfarmer says:

      That is exactly what happened to us, Jason. We were using spending to deal with underlying emotional issues. Once we figured that out and dealt with those underlying issues, we began to want better for ourselves than what those instant gratification purchases could bring. Thanks for sharing the wisdom!

  • kelly @stayingonbudget says:

    You so need a plan to be debt free!

  • Chad says:

    I would like to add (from my own experiences): be honest with yourself. Debt, like any other compulsion, is psychologically driven. If you do not believe that you have a problem, then you will never fix it.

    • Laurie @thefrugalfarmer says:

      Chad, excellent addition to the list! I know that was crucial for us in starting our debt payoff plan. We had to first admit that things were out of control. Thanks so much for sharing your thoughts – I appreciate it!

  • Holly@ClubThrifty says:

    Just like with anything else, you just have to do it! I agree that a plan helps. I like to plot out my payments and watch the balance drop!

  • Matt Becker says:

    Great stuff Laurie. I would add that there’s probably too much reliance on willpower as well. It’s incredibly difficult to make constant decisions about trade-offs and that can really wear people down. I would much rather decide on an amount I want to save or allocate towards repayment and automate that at specific times every single month. Then I go about my life without a nagging worry behind every single thing I spend money on.

    • Laurie @thefrugalfarmer says:

      Excellent point, Matt! I think you’re right: people can get too focused on each penny and then the focus is no longer on accomplishing a goal, but instead on fear of not accomplishing that goal. Thanks for sharing. 🙂

  • MonicaOnMoney says:

    Laurie- This is a well thought about post and I agree that lack of understanding and lack of vision are key to preventing someone from getting out of debt!

    It’s so easy to get into debt with the purchase of a car or a house and then just live paycheck to paycheck without any sort of vision or plan to get debt free.

    We all know that “LIFE HAPPENS!” but it always will so it’s best to have a plan.

    • Laurie @thefrugalfarmer says:

      “We all know that ‘LIFE HAPPENS!’ but it always will so it’s best to have a plan.” Love that, Monica! There will always be an excuse not to reach or go for a goal, so just do it, right?

  • Stefanie @ The Broke and Beautiful Life says:

    Stepping back and looking at the “big picture” of financial freedom and setting SMART goals to get there is what keeps me motivated.

    • Laurie @thefrugalfarmer says:

      Seeing the big picture is such a huge part of accomplishing goals, Stefanie. And as studies have proven, the SMART goals are the ones that get done. Thanks for sharing!

  • Daisy @ Prairie Eco Thrifter says:

    Have a plan and having the motivation to get rid of debt is, I’m sure, imperative. I have to say that i’m lucky – the debt that I did have, in my car loan, has been long gone for quite some time now, and it didn’t take very long or very much effort to pay off.

    • Laurie @thefrugalfarmer says:

      Good for you for kicking that car loan to the curb, Daisy. Can’t wait till we are in that same debt free spot!

  • Kim@Eyesonthedollar says:

    Sadly, I think lots of people never imagine a life without spending a big chunk of their money on debt repayment. Otherwise, they would stop buying things. I don’t think it makes people happy to live that way, they just don’t have the vision to think outside what they know.

    • Laurie @thefrugalfarmer says:

      Kim, I totally agree. For us, we’ve changed to imagining what we’ll do with “x” amount of dollars every month when we no longer have those payments. It’s very motivating!

  • Mark Ross @ Think Rich. Be Free. says:

    Those are really true. The lack of education really standouts, and I totally agree with you on that. Being financially-literate can really help you get yourself out of debt.

    • Laurie @thefrugalfarmer says:

      Thanks, Mark, and I totally agree. And it’s a free education with the use of the Internet and the local library, so, no excuses! 🙂

  • Romona (@monasez) says:

    I think lack of education is a big problem. Also, I think schools should really start implementing personal finance courses into highschools, so that the conversation about money and debt is started early.

    • Laurie @thefrugalfarmer says:

      I so agree, Romona! And it would be great if the schools could implement some PF. I know that when I graduated I had no clue about any of that stuff, but I sure knew how to spend money.

  • Grayson @ Debt Roundup says:

    Great article Laurie. All of these are so important when dealing with debt and life in general. You need direction, determination, and discipline.

    • Laurie @thefrugalfarmer says:

      Great point, Grayson – they do apply to life in general, don’t they? Thanks for the thoughts, and have a great day!

  • Mackenzie says:

    Lack of vision is a big reason why people don’t get out of debt. Goals are important! Have a reason to get out of debt 🙂

  • canadianbudgetbinder says:

    Great post Laurie,
    Many people that I come in contact with struggle just to start and it’s not because of planning it’s because they have no idea where to start. I think if more people realized that getting rid of debt takes time and that all it takes is patience and a desire to reach their goals they will get there.

    • Laurie @thefrugalfarmer says:

      A very good point, Mr. CBB. And I completely agree about the patience aspect of it too – I would say that’s a key point in reaching success.

  • Shannon @ The Heavy Purse says:

    You know I am a huge proponent of goals. Not only do the motivate you (and if they don’t then you may need to revisit them), they also give you a reason to say no when temptation strikes and the ability to walk away without feeling deprived. Because consumer debt has been so commonplace, a lot of people think it’s a normal way to live. It’s a belief we need to change.

    • Laurie @thefrugalfarmer says:

      So true, Shannon. Everyone thinks that those who are debt free or striving for debt free are the “abnormal” ones, which makes staying in debt all that much easier.

  • Alexa says:

    I believe you have to make a plan and stick to it. If the plan doesn’t work modify it but always keep your end goal in sight Once you build up some momentum you can better visualize the day when your goals will be a reality. You just have to keep your head up!!

    • Laurie @thefrugalfarmer says:

      That positive perspective is so important, Alexa! And you have shown through your story that it is crucial to busting through the roadblocks too. It’s called perseverance!

  • Andrew@LivingRichCheaply says:

    I think a lack of vision and understanding definitely could cause a detour in your path to being debt free. Going on the path does require a lot of motivation and I like how you differentiated motivation by fear (understanding the dangers of debt) and motivation by being excited with what your journey will lead you.

  • The Norwegian Girl says:

    It´s so important to be realistic when it comes to money and debt. I think this is the area where many people fail and give up, because they believe that they can pay down extreeeeme amounts of money every month, but then there are the living expenses, the unforeseen expenses etc, and when they can´t pay as much as they thought, they just give up.

    • Laurie @thefrugalfarmer says:

      I know that’s been the case with us, NG. We haven’t been able to pay down as much as we’ve wanted to each month, and we’ve had to work hard not to be discouraged because of that. Being realistic is hugely important in any long-term goal, I think.

  • C. the Romanian says:

    Fortunately, I’ve never been in debt and I am doing my best to remain debt free, even though this means not being able to buy the house that I’d love to have. But I always told myself: “If I don’t have the money, I don’t afford it”. This has made me unhappy at times, but kept me away form the easy route of getting a loan and having to deal with it later. And since I only recently started to show an interest in personal finance and budgeting, my loans would’ve been pretty high :))

    • Laurie @thefrugalfarmer says:

      C, you’ve really got the right attitude. Staying out of debt, even mortgage debt, is a real boost to one’s peace of mind, and to their finances.

  • anna says:

    Great points, Laurie! I fully admit that my weakest point is lack of vision for the long-term end goal. I had it in the beginning, but after months of repayments my conviction falters a bit. It’s a frequent challenge, but it’s something that I do work on daily!

    • Laurie @thefrugalfarmer says:

      Oh, I can identify with that, Anna. And you’re so right about the daily work too – it’s a great way to keep on top of things.

  • Pauline says:

    It really pains me to see people with little or no financial education, especially when they don’t understand APR and the total cost of an item paid with debt. They will have to work so much more to pay it off! A little thinking and studying can really save you a lot.

    • Laurie @thefrugalfarmer says:

      Pauline, so true! I think that’s why many people simply don’t even try for financial independence, because of a lack of education. They feel just too out of the loop to even try. This is where the PF blogging world is so very valuable. It’s written for the layperson and provides a never-ending list of topics to learn about.

  • Mike Goodman says:

    You are definitely right about the Vision part Laurie. Without vision you are simply travelling blind in this world. How can you expect yourself to handle your finances successfully if you can’t even come up with a goal for yourself?

    • Laurie @thefrugalfarmer says:

      So true, Mike! You have to be able to see beyond your current situation into success if you’re going to overcome the hurdles involved with accomplishing any goal, monetary goals included! Thanks for the comment, Mike!

  • Blair@LifeDollarsandSense says:

    Great points! The lack of understanding and vision seem huge to me. I see so many people who don’t see debt as an issue, or don’t have a vision of financial freedom. I am positive that I look like the crazy cheap girl at the office. But I really think that people just can’t see the benefit

    • Laurie @thefrugalfarmer says:

      So true, Blair! There is an “air” out there that frugal people are nuts. I think any time somebody swims upstream, so to speak, people automatically think they’re crazy and don’t take the time to wonder why the person is swimming upstream in the first place. Great thought, Blair!

  • maria@moneyprinciple says:

    John, I agree with all four points you make but think that the first one is probably the most important. Dealing with your money is one of the cases where ‘lack of education’ really means extermination.

  • maria@moneyprinciple says:

    Sorry, Laurie, just noticed it is your post – I blame it on it being Friday evening and me having a really hard week at work :). Great one, anyway.

    • Laurie @thefrugalfarmer says:

      LOL, I SO get that, Maria! And you are very much right about lack of education being a huge factor. For years we would think, “What’s wrong with having debt?”. Yet when my husband got laid off three years ago, we got “educated” real quick on what’s wrong with having debt.

  • Kyle | says:

    Love this post Laurie. I can say that I failed at getting out of CC debt because I fell victim to the “I want it now mentality”. I wanted to be out of debt immediately and as soon as I realized that wasn’t going to happen, I quit on myself. It wasn’t until I was a little wiser that I realized it had to be an all-consuming process with small baby steps. Once I did a few baby steps it got easier and I started to see progress.

    • Laurie @thefrugalfarmer says:

      Great point, Kyle! I think it’s SO important to focus on the baby steps. Like the old saying goes “One removes a mountain by first carrying away the small stones.”

  • jim says:

    Excellent article. I think you’ve mastered it. You’re going to FI faster than you can blink an eye. It may not seem that way to you right now, but you will. Good for you and yours!

    • Laurie @thefrugalfarmer says:

      Jim, your comment made my day! Thanks for the encouragement – you’re right that it doesn’t seem that way to us right now, but in my heart of hearts I know we can clearly see the way to FI, and that this is a huge part of getting there. Thanks much!!!

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