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The 12 Lies That Keep People in Debt

Debt—it’s become as normal as waking up in the morning and brushing your teeth. But just because debt is “normal” doesn’t mean it’s good for you. The truth is, we hate debt around here because of all the problems it causes.

Debt robs your present and steals from your future. Debt keeps you stuck in a cycle that makes it impossible to build wealth. And debt can weigh you down so much you can’t see a way out.

But even though debt comes with all that baggage, people still make all sorts of excuses for staying in debt instead of taking steps to become debt-free. And spoiler alert, all of them are bogus. Don’t fall for any of these 12 lies that keep people in debt:

1. Lie: Debt is normal (or even helpful).

Like we said, it’s totally normal to have debt hanging around your neck. Don’t believe us? A shocking 77% of Americans have some type of debt—that’s nearly 8 out of every 10 people!1 And how many times have you heard one of these money myths:

You need to have a good credit score! (No, you don’t.)

There are good debts—and tax benefits! (No, there really aren’t.)

It’s okay to have a car payment and student loans(No, it’s not.)

Those are straight-up lies about money that the toxic culture is shoving down our throats. What’s so great about owing money to somebody? Nothing!

And if you think it’s easy to stay on top of your debt, our research shows that 1 in 5 Americans have fallen deeper into debt since June of 2022. That’s not staying on top. That’s being buried alive.

Living in debt kills the American Dream. Don’t you want to start living your dreams sooner?

Hey—here’s some honest-to-goodness good news: You can! Seriously. Just be ready to be different. If being in debt is normal, choose to be weird.

2. Lie: I have plenty of time to plan for my financial future.

It’s easy to tell yourself you have lots of time before you need to plan for your later years. But you shouldn’t put off being responsible with money or building a secure future. And when you’re in debt, you’re doing both of those things. As you continue to pay for your past, you can’t firm up your future—or even your present!  

Stop saying “one day” and start moving forward—today! That means following the 7 Baby Steps. Get yourself $1,000 in the bank as a starter emergency fund. Then use the debt snowball method to pay off your debt once and for all! You’ll finally have your entire income back in your hands, to build security and wealth by saving up a full emergency fund, investing and paying off your mortgage.

Don't fall for the "I have plenty of time" lie. Start planning your financial future now so by Baby Step 7, you're living the life you've always wanted!

3. Lie: You don’t make enough money to live debt-free.

Whether it takes you six months or six years, paying off your debt is possible no matter what your income looks like. Of course, making more money will help you get out of debt faster. The great news is, you can increase your income right now,

These days, the options are pretty endless for bringing in extra cash. You could get a side hustle by driving for Uber or Lyft. Or deliver food through Grubhub or DoorDash.

Don’t have extra time? Go online and sell that extra television on Facebook Marketplace or Craigslist. Or dig through closets and sell unworn clothes on Poshmark or thredUP. You'll be clearing clutter and making money at the same time. A win-win!

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Avoid the traps and manage your money the right way with Financial Peace University

Or maybe it’s time to get bold enough to ask for a raise or spruce up your resumé and start looking for a higher-paying job. Don’t let a few dollar signs come between you and being debt-free.

4. Lie: The sacrifices aren’t worth it.

Sometimes it’s not about making more—it’s about spending less.

We know, it’s hard to say no to eating at restaurants and going on vacation. But remember, it’s just a short-term sacrifice for long-term financial peace. And a lifetime of freedom from debt is worth it!

So, ask yourself: What am I willing to give up now so I can get out of debt forever?

  • Try a no-spend month where you don't buy any nonessential items.
  • Give up that daily Starbucks fix and brew your coffee at home—while you pack up your brown bag lunch.
  • Skip your expensive vacation at the beach and do a budget-friendly staycation. Or even better—skip vacationing altogether until you’re debt-free.
  • Sell your super nice car that comes with a monthly payment and pay cash for one you can afford. Right now.

Is this challenging? Yes! Is it temporary? Also, yes!

Once you’re debt-free, you can go back to hitting up the drive-thru for your half-caf, honey lavender latte with extra foam. Or not. Maybe you’ll prefer your home-brewed drip coffee by then. Either way, you’ll be calling the shots with your income without any debt holding you down.

5. Lie: Having a budget limits your freedom.

Some people in debt don’t even know how much debt they have (or how much it’s costing them), because they’re not keeping track of where their money goes each month.

Why? Well, a lot of people believe this lie that a budget squashes your freedom. But the truth is, a budget gives you freedom. A budget is a plan for your money. And when you have a plan for every dollar you make, you’ll finally be in control of your money instead of wondering why you’re so broke. People say budgeting makes them feel like they got a raise, because they “find” money they were wasting—because they didn’t have a plan for it.

And budgeting isn’t hard, but it does take some of effort. Our free budgeting app, EveryDollar, can help with that.  

And best of all—you can take your budget with you anywhere you go. No more worrying if you have enough money left to buy groceries. Just pull up your app and it’ll let you know.

6. Lie: You need to keep up appearances.

The neighbors down the street just redid their kitchen, so now you think yours needs an upgrade too. Your old friend from high school just posted a picture of her new BMW on Facebook, so now you feel like you need a flashy new car.

We hate to break it to you, but it’s a big ol’ nope on both of those things.

This comparison game is known as the dreaded “keeping up with the Joneses” mindset. Everything on the outside might look shiny, but little do you know, the Joneses have a BMW with a monthly payment higher than their mortgage, and they took out a huge loan to renovate that kitchen.

The point is, the Joneses might look like they have it all togetherbut in reality, they’re broke. And if you’re not careful, you’ll follow them right into bankruptcy by trying to keep up with their every move.

If you want to stop being in debt, then don’t let people who are in debt be your role models. 

7. Lie: “I want it, and I want it now!”

A lot of people in debt love material things (like those Joneses we talked about). The more you have, the more powerful and confident you feel—and you can never have it soon enough. 

But it’s all fake. Here’s the deal: If you can’t pay cash for it, you can’t afford it. Buying stuff with debt will only weigh you down.

Between credit cards and buy now, pay later plans, our culture has twisted what it means to actually be able to afford something. Society screams, “Have it now, pay for it later!”

But that’s just another crooked lie about money that’ll send you straight into piles of debt and years of regret.

The reality is, you’ll end up spending more on monthly payments—plus interest—than you would have spent if you had just bought the thing outright. Oh, the irony. 

Instead, don’t buy things you can’t pay for right nowever.

8. Lie: Not using debt is a scary lifestyle change.

If you’ve always used a credit card and you’ve always had a car payment, it might be hard to imagine how you’ll get by without them. And let’s face it—being in debt can be comfortable. At first.

But it’s kind of like slowly cooking in a pot of boiling water. It’s warm and cozy at first, but before you know it, you’ve been boiled alive. Yikes!

The reality is, it’s just as easy to buy things without debt. A debit card works the same way a credit card does (yes, even for hotels and rental cars). And guess what? People still accept cash. Some even prefer it so they don’t have to deal with paying those transaction fees. (Because someone has to pay for your credit card rewards.)

9. Lie: Debt isn’t a big deal.

As long as I make the minimum payments every month, it’s not that big of a deal.

Uh . . . yes, it’s still a big deal—and an expensive one!

Your credit card has sneaky hidden fees and interest. Your student loans are growing bigger by the day. Your leased car is losing value as you read this sentence.

And if all that wasted money isn’t bad enough, think about all the potential money you’re wasting. For instance, the average monthly payment for a new car loan in 2022 was about $700 a month—ouch!2

If you took that monthly car payment and popped it into a good growth stock mutual fund at age 30, you could have around $4.3 million waiting for you when you retire. Don’t believe it? Try the investment calculator for yourself.  

That flashy BMW doesn’t look so good now, does it?

10. Lie: You don’t need your spouse to be on the same page.

Money and relationships can be tricky territory, but it’s even worse when a couple isn’t seeing eye to eye. Maybe one of you is fully on board with becoming debt-free but the other isn’t quite convinced that debt is all that bad.

Listen up—money issues aren’t something you want to disagree about. If you really want to get out of debt, you and your spouse have to be on the same page.

And remember, it’s not my money or their money—it’s our money. Once you get married, your vocabulary needs to change. You’re on the same team, and you have to start acting like it if you want to get anywhere.

The same goes for your debt. It’s not my credit card debt and their student loans. It’s your joint debt together. And if you want to get rid of it, you need to tackle it as one team too.

11. Lie: You need a credit card for emergencies.

Getting out of debt is amazing. But if you keep that ol’ credit card around for “emergencies,” you’ll find that everything starts to become an emergency.

Car trouble? Emergency.

Out of groceries? Emergency.

Christmas toys? Emergency!

. . . and the next thing you know, you’re back under a mountain of credit card debt.

Look, emergencies happen (Christmas is not one of them, FYI). But that’s why you need an emergency fund. Let a fat stash of cash be your safety net—not some overhyped piece of plastic that adds insult to injury by tacking on interest to your emergency. (BTW, the current average interest rate for credit cards is at an all-time high of 20.4%.3 It isn’t worth it!)

12. Lie: Getting out of debt just isn’t possible.

Yeah, getting out of debt isn’t easy. It takes a lot of hard work and discipline. But it’s not impossible.

People call in to The Ramsey Show every day to share and celebrate their debt-free victories—sometimes after paying off six figures’ worth of debt. And you can be next! All you need is a plan, and we’ve got one for you.

The debt snowball method (aka Baby Step 2) is the best way to get out of debt. Here’s how it works:

  • Start by listing out all your debts from smallest to largest (don’t worry about the interest rate). 
  • Keep paying all the minimum payments on the debts like normal. But that lowest debt on your list gets special treatment—that’s the one you target first. 
  • Attack that first debt with everything you’ve got! Any extra income, any time you come in under budget, and any and all extra cash you have goes here. Pay it off as fast as you can! 
  • Once the smallest debt is gone and out of your life forever, take the entire amount you were paying on it and roll that over to the payment on your next-smallest debt. 
  • Keep this up until you’ve knocked out every single debt on your list. Then, congrats—you’re debt-free!

Don’t Believe the Lies That Keep People in Debt

Look, we know trying to pay off a mountain of debt is challenging. There’s no sugarcoating that.

But remember this: Millions of people who were in your shoes are now living and giving like no one else because they followed the 7 Baby Steps. You’re. Next. It’s your turn to throw off the weight of debt and start building the life you’ve dreamed of. It’s so very possible. And you’re so very worth it.

You'll learn the best way to pay off debt and follow those Baby Steps with Financial Peace University (FPU). Hey, the average household pays off $5,300 of debt in the first 90 days of taking FPU. This stuff really works.

It’s time to stare all these deceitful myths right in the face and call them out for what they are: stone-cold lies.

Start learning—and living—the truth about money. Sign up for FPU today!

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Ramsey Solutions

About the author


Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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