Why Are You in Debt?

Are you in debt? Does the amount of your debt make you uncomfortable? We know these are hard questions to askyourself. Sometimes the answers are hard to accept.

Have you ever thought about why you are in debt? Sure, we can think of lots of reasons off the top of our heads. However, what are the real reasons for your own situation? Have you sat down in a quiet moment and honestly recounted your own story?

In recounting that story to yourself, dig deep. Are there any opportunities to admit quietly, “I made a bad choice here,” along the way? When you find those bad choices, can you honestly analyze why you made them? Can you figure out a way to protect yourself from your vulnerability next time, whether your weakness was being ill-informed, weak-willed, impulsive, indulgent, subservient, controlled by peer pressure?

Do you hate us yet for asking?

Okay, we will offer a handy excuse for bad behavior financially. We live in a consumption-drunk society that operates on the belief, "I want what I want,—so I should have it now!" For years, credit and debt have been relatively easy to acquire. As a nation, we have become accustomed to being deeply in debt. We are bombarded by consumer advertising that urges us to buy things we do not need and, sometimes if we think about it, we do not even want. These things keep our real goals in life out of reach.

• You have to examine your thinking to find out how you developed your bad spending habits. Look at the roots of your feelings of blame and resentment, guilt and low self-esteem. Here are some of the reasons you may be in debt.
• You may be overspending to impress others. You may lack the confidence to say to your family and friends, "I want a new [car, house, widget], but I need to wait until I can afford it."
• You may be purchasing gifts you cannot afford, in order to buy your significant other's love or your children's gratitude and forgiveness. 
• You may be substituting gifts for love. Perhaps your parents tried to buy your love when you were young. 
• You may feel that you work hard all day and you need to reward yourself. The media is full of messages encouraging these indulgences.
• You may be feeling lonely or unfulfilled. Face it, it is easier to go out and buy something new rather than to build relationships or accomplish your goals.
• You may be addicted to shopping. Perhaps your constant desire to go shopping is a way to distract yourself from doing what you should be doing to improve your life and genuinely increase your self-esteem.
• You may be worried about the world's problems and determined to just "live for today," no matter what the cost.
• Your family may have taught you to overspend. Childhood programming is difficult to change unless you acknowledge it.
• You may be convinced that debt is inevitable, that you are never going to get ahead anyway, so why try?
• You may still be rebelling against parents who "pinched their pennies." To compensate for a deprived childhood, you may drive yourself to acquire things that you feel you deserve.

Look at this list and think about why you are in debt. If you do not understand it, you cannot control it. If you do not heal these inner feelings, it will not matter how much you save or how much money you have. You need to get your thinking right before you can get your finances right.

To be truly successful financially, you need to save and spend wisely and understand the mechanics of money. You need to know where it all goes, whether it is disappearing through inflation, taxes, or your weakness for the influence of corporate advertising. If you can anticipate the factors that take away your money, you can outsmart these situations by planning. Then you can save enough to invest successfully and reach financial independence.

Samuel K. Freshman and Heidi Clingen are authors of The Smartest Way™ to Save, Why You Can’t Hang on to Money and What to Do About It. They offer only their opinion, which does not constitute professional, financial, or legal advice. To receive a copy of The Principles of Financial Independence or submit questions, email them at Heidi@TheSmartestWay.com