So, how did we get here? How did we get over $403,000 worth of debt before we turn 30! It’s hard to decipher exactly where it all went wrong, but I can definitely say we didn’t expect this!
Average Amount of Debt
According to an article by Money Magazine, the average American under the age of 35 has about $67,400 in debt. This isn’t including a mortgage, so if I subtract our mortgage – we still have over $200,000 worth of debt. This is way above the national average. We are a young married couple with no kids – so how did this happen?
Hindsight is 20/20
Looking back, I can definitely think of things we shouldn’t have done and products we shouldn’t have bought. If only we had thought about how it would impact us in the future, instead of living in the moment and just doing whatever we wanted. They say hindsight is 20/20 and I truly believe that. Going forward I need to make sure we don’t accumulate any more debt and are setting ourselves up for success. In addition to that, we need to try and identify ways for us to pay off our the debt we already have as quickly as possible.
What has caused us to accumulate all this debt in such a short amount of time, and what has prevented us from getting out of debt? According to Dave Ramsey there are 10 reasons people stay in debt. Unfortunately – all 10 apply to us, and many of them probably apply to you too!
1. Trying to keep up with appearances
This is 100% us. In this social media filled day in age – seeing my friends from high school and college moving on to successful careers, buying new cars and a house definitely influenced some of our behavior and buying decisions. We always felt like we had to “keep up with the Joneses” and continued to buy things we didn’t really need to make us feel like we were successful and important.
2. Thinking you don’t make enough money and have to use debt to buy things.
We would always say “We don’t make enough money” or “I need a raise”. In reality, we both work full-time and make about $96,000 a year combined. My parents raised me and my sister making much less than that and we had a good life. We make enough money to live a comfortable life if we’re smart with our money. People, us included, tend to focus on always trying to get more rather than just living within their means and being happy with what they have.
3. Unwilling to make sacrifices
My husband and I are both very stubborn. Whenever we would talk about cutting costs, I would recommend cutting HBO Go and he would say “No! I need to watch my Game of Thrones” and he would suggest cutting Hulu and I would say “No! I need to watch my Pretty Little Liars”! Neither of us wanted to sacrifice anything and expected the other to be the one to make the sacrifices. This often put us at a standstill.
4. Having no hope
There have definitely been more than a few times where we’ve both felt hopeless. We’ve dug ourselves a hole so deep we thought – what’s the point of even trying to get out? There’s nothing we can do about it. Of course, that’s not true – there is plenty we can do about it if we are committed. However, it certainly can feel hopeless at times.
5. Addicted to buying stuff
I wish I could say this wasn’t the case, but we definitely have a problem with buying everything and anything on amazon. We LOVE amazon and get a lot of great things there, but we also buy a lot of random stuff we don’t really need. You can very easily get lost in all the cool stuff there is on amazon and buy way more than you should.
6. Not making getting out of debt a priority
We have definitely made many New Year’s resolutions to get out of debt. If you know anything about new year’s resolutions, you know that most people don’t end up sticking to them and that is exactly what happened with us. We started out strong for a few months and cut our spending, but over time we would gravitate back to the same bad habits and didn’t make getting out of debt our priority.
7. Not being on the same page as your spouse
My husband grew up always getting the latest technology and gaming systems that he wanted. To this day he still wants to buy the newest technology and products that come out and gets pretty upset if we can’t get it right away for whatever reason. Needless to say, no matter how much I wanted to save money and slash our debt – there was always a new “something” that was more of a priority to him. Luckily, we have both grown to understand each other and seem to be on the same page now – but we definitely weren’t at first.
8. Not creating and sticking to a budget
For years we didn’t have a budget. We would get paid and see how much money we had in our account and just make a mental note of that amount. That way, when we were out buying things, we would just try to remember that we can’t spend over that amount. Eventually, this method got us into trouble and we would get overdraft fees because we forgot a certain bill was coming out of our account. Or worse, we spend more than we had because we thought our check amount was larger than it was. It is so important to have a budget and know how much money you have and where your money is going at all time. It helped us tremendously. Check out our other post for more information on Why You Need a Budget.
9. Continuously using credit cards
I know the best way to get out of debt is to just cut up your credit cards and never use them again. It sounds like such a simple concept, but it’s much harder in reality. We constantly worry that one day we might need it for an ‘emergency’ and should just hold on to it – but then that emergency becomes the fact that we just really want to buy a new T.V. and happen to have enough available credit on the card to buy it. Many people fall into this trap all the time. That’s why we leave our credit cards at home now so we are not tempted to use them.
10. Don’t know where to start
I’m sure everyone can relate to this on some level. You just don’t know where to start. There are a million articles out there about ways to get out of debt, but you read them and think “it’s not that easy” or “this would never work for me”. That’s how we felt and what prompted this blog. We don’t have a magic solution to our debt problem and weren’t sure where to start – but we have decided “to start” – and that’s something.
Where To Go From Here?
We don’t have all the answers on how to get out of debt – but we are starting this journey and taking you all with us. We’ve already started implementing small things day by day that will amount to big differences in our quest to live a more frugal lifestyle. I know it seems impossible because we thought it was too – so we’re just going to have to do the impossible and be frugal. Still not sure about this whole “frugal thing” and what it means. Check out our post titled What Does it Mean to Be Frugal? to learn more and to join us on this journey. We can’t wait to share it with you and hopefully help you make some changes that will help you on your path to frugality and debt-free living.