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12 Lies That Keep People in Debt

Debt—it’s 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. We have a fun little saying around here when it comes to debt: Debt is dumb. It really is.

Debt robs your present and steals from your future. Debt keeps you stuck in a cycle that makes it impossible to build wealth. But sometimes, people are so caught up with being in debt, they can’t see a way out.

There are all sorts of excuses people give for staying in debt instead of taking steps to become debt-free, and all of them are bogus. Don’t fall for any of these 12 lies:

1. Debt is normal (or even beneficial).

Like we said, it’s totally normal to have debt hanging around your neck. A recent report showed that nearly 80% of Americans are in debt—that’s 8 out of every 10 people you know!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.)

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Those are straight-up lies that the toxic money culture is shoving down our throats. What’s so great about owing something to somebody? Nothing! And if you think it’s easy to stay on top of your debt, know that 1 in 4 Americans who have debt are in collections for at least one of their debts, according to our Ramsey State of Personal Finance Report.

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

If being in debt is normal, choose to be weird.

2. Money is complicated.

A lot of people in debt think they have to be some sort of math wizard to understand and win with money. But that’s a load of crap!

We’re in the business of making finances easy for everyone to understand by breaking it all down into 7 Baby Steps. You start small with a $1,000 starter emergency fund. Then you learn the debt snowball method for paying off debt and keep moving up through the stages of investing, saving for the future, and reaching homeownership. By Baby Step 7, you’re living the life you’ve always wanted and you’re able to bless others like Oprah during Christmas! You get a gift, and you get a gift. Everybody gets a gift!

3. You’ll never 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. But of course, making more money will help you get out of debt faster. The great news is, you can raise your income right now—no promotion needed.

These days, the options are pretty endless for bringing in extra cash. Get a part-time job. Drive for Uber or Lyft. Or deliver food through Grubhub or DoorDash. Don’t have extra time? Clean out the spare bedroom and rent it out on Airbnb. And hey—while you’re cleaning out the house, why not sell all that unused clutter on Facebook Marketplace?

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. 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 financial peace is worth it! So, ask yourself: What am I willing to give up now so I can get out of debt forever?

Start by making some small sacrifices. Could you give up eating out three nights a week and go down to just one night? Can you swap your week-long vacation at the beach for a weekend of camping at the lake? Or what would your life look like without cable?

Make a few small changes, and before you know it, you’re cutting hundreds of dollars out of your budget—and throwing it right at your debt!

5. Having a budget limits freedom.

Some people in debt don’t even know how much debt they’re in (or how much it’s costing them), because they’re not keeping track of it.

A recent study found that 80% of Americans currently budget, and 88% of those budgeters said it got them or kept them out of debt.2 That’s great news—but it also means there’s still 20% of Americans who aren’t keeping tabs on their money.

Some people believe this lie that a budget limits your freedom. But the truth is, the budget gives you freedom. And if you’re watching where every dollar goes, you’ll realize just how much you’re throwing away at debt.

Budgeting isn’t hard, but it does take a little bit of effort. Our free budgeting app, EveryDollar, takes all the stress out of making a budget. And best of all—you can take your budget with you anywhere you go. Now there’s no excuse for not knowing how much money you have left to buy groceries. Just pull up your app and it’ll let you know.

6. You need to keep up appearances.

The neighbors down the street just redid their kitchen, so we need to redo our kitchen. My old friend from high school just posted a picture of her new BMW on Facebook, so now I need a flashy new car.

This comparison game is known as the dreaded “keeping up with the Joneses” mindset. But little do you know, the Joneses have a leased BMW and they took out a huge loan to redo that kitchen.

The point is, the Joneses might look like they have it all togetherbut they’re usually the most broke people in your neighborhood. And if you’re not careful, you’ll follow them 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. “I want it, and I want it now!”

A lot of people in debt love material things. The more you have, the more powerful and confident you feel—and you can never have it soon enough. But it’s all fake. A lot of the time, you can’t afford that stuff. And it’s only going to weigh you down.

Between credit cards and installment 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 a mindset 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 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 in cash—ever.

8. Not using debt is a scary lifestyle change.

If you’ve always used a credit card and you’ve always had a car payment, sometimes it’s hard to make that change in your life. And being in debt can be comfortable. 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!

But 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 you’ll likely get a great deal if you bring a stack of cash to the dealership to pay for your car in full. Plus, you won’t lose any money in depreciation.

Look, we know that trying to pay off a mountain of debt can be scary and overwhelming. 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. If they can do it, so can you!

9. Getting out of debt isn’t a priority.

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. Your student loans are collecting interest. 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 car loan is about $563 a month.3 If you took that monthly car payment and popped it into a good growth stock mutual fund at age 30, you could have some $5 million waiting for you when you retire. That flashy BMW doesn’t look so good now, does it?

10. 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—this isn’t a place to be divided. 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 together.

11. You need a credit card for emergencies.

Getting out of debt is amazing. But if you keep that ole 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 charges you fees just for having it.

12. It just isn’t possible.

The truth is, getting out of debt isn’t easy. It takes a lot of hard work and discipline. But it’s not impossible. People call 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 to follow it:

  • 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 is going to get the 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 your next debt.
  • Keep this up until you’ve slashed out every single debt on your list. Then, congrats—you’re debt-free!

You can learn the best way to pay off debt and win with money with Ramsey+. It comes with access to online courses like Financial Peace University to help you run through those Baby Steps. And did we mention that the average household pays off $5,300 of debt in the first 90 days of working this plan? This stuff really works.

Your Ramsey+ membership also includes the easy-to-use budgeting app EveryDollar so you can take control of your money and your life now and stay out of debt forever. We believe in you!

Try Ramsey+ for free today.

Ramsey Solutions

About the author

Ramsey Solutions

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.

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