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12 Bad Habits of People Who Get Into Debt

12 Bad Habits of People Who Get Into Debt
Jennifer Leach Sep 16, 2019
Want to Earn Some Extra Money?

debt free habitsIn today’s post, we’ll be uncovering these 12 bad habits of people who get in debt.

Are you debt-ridden?

Did you start accumulating debt at a young age?

How did you get there?

Debt impacts just about everybody.

Unfortunately, our society is structured in such a way, that debt is required to get a lot of necessities that may be needed, especially early in life, like:

  • A college education
  • A car
  • A house

It’s ok to have debt but if you have a lot of debt, it can really weigh you down.

Things That People in Debt Say

  1. I’ll probably get an inheritance and pay off my debt then
  2. I don’t see my student loans as debt, they helped me get a college education
  3. When I get a raise, I’ll use that to pay towards my debt
  4. I’m not struggling, I can afford to make my minimum payments
  5. I already work full-time, I don’t have time to earn extra money to pay off debt

If you want to read about 15 more things people in debt say, check this out.

Have you said one or more of these statements?

The truth is, debt doesn’t have to be bad.

But, it can get to a point where you are financially burdened and so, you want to crush debt before it gets to that point.

I worked in the finance world for a decade and heard many stories of people financially struggling due to:

  • A change in their credit card interest rate
  • Their mortgage interest rate adjusting
  • Losing a job
  • Transitioning onto maternity leave
  • And, more!

Anything can happen at any time, and cause you to fall into a scenario where it might be difficult to tackle your debt and when debt is no longer manageable, it can hurt you in many ways:

  • Ruining your credit score
  • Making it expensive to buy a car or house
  • Making it tough to rent a house or apartment
  • Making it hard for you to open a bank account

Ask yourself if you are following these bad habits…

12 Bad Habits of People Who Get In Debt

This roundup will share 12 bad habits of people who get in debt. Do you do any of these things?

1. You Use Credit

This is a no-brainer.

If you continue to use credit, you are going deeper and deeper into debt.

Now, there are times using credit can be to your advantage, like these dozen crazy ways to get credit card points.

There’s nothing wrong with using credit cards but if you are continuing to use them, only making the minimum payments, and not paying off at least as much as you charged, if not more, then you’re going backwards here.

This is a bad habit that people with debt have.

They use credit cards today, thinking they will pay it off tomorrow, or in the future sometime, and never do.

Crush this habit by avoiding using credit cards and watch your balances shrink!

Here are some tips to shrink your credit card debt:

  • Pay your credit card bill on time
  • Keep track of your spending
  • Don’t use your credit cards to make ends meet

Paying Credit Cards on Time

Nearly 3% of credit cards are delinquent.

Not making your minimum payment on time can cost you in fees, big time.

And, what is one of the top reasons for late payments?

Because people forget!

If you pay your credit cards on time, you get tons of incredible benefits like:

  • Avoiding late fees
  • Keeping your credit in tact (payments 30 days or more late get reported delinquent to the credit agencies)
  • Keeping your interest rate from rising (some credit card companies will raise your rate or change terms if your payment history is poor)

How to pay your credit cards on time?

Set a reminder or put yourself on autopay.

With autopay, you can have your payments made to your credit card (and on bills) on autopilot, ensuring your credit card bill is paid on time.

Keeping Track of Spending

It can be very easy to lose track of spending and rack up credit card debt fast.

It’s instant money and can be very tempting to use to fuel your purchases.

Try this budgeting app to help control your spending and avoid putting strain on your budget.

Do Not Use Credit Cards to Make Ends Meet

If you fall into a situation where you are using credit cards to make ends meet, you are in a bad scenario, unfortunately.

This actually happened to me in college.

I moved to a big city to complete my Bachelor’s degree and I was living in a cheap apartment working a part-time job.

Things were tight and for the first time in my life, I was living paycheck to paycheck.

I was paying on credit cards with other credit cards and using my available credit to pay my utilities.

It was bad.

Fortunately, I wasn’t in this situation for very long.

I got a second job and started to find more balance in my budget, no longer struggling.

If this is you, take action now!

Take a look at these resources to help:

Recommended reading: 7 best tips for using credit cards & avoiding costly mistakes

2. You Make Impulse Purchases

If you can’t resist a sale or get fueled by making Living Social or Groupon purchases, then this bad habit is going to keep you in debt!

Fortunately, I’ve never been this way and actually hate shopping but, I have had many friends and family members around me who were impulse shoppers.

When you see those around you go shopping every time there’s a sale or always taking advantage of a shopping moment, then you know that they might be an impulse shopper.

How to cope with impulse buys?

  • Put yourself on a budget
  • Avoid opportunities to spend
  • Avoid social media (tons of opportunities to buy)
  • Learn to find satisfaction in what you already own
  • Avoid shopping websites
  • Empty out your email inbox of shopping offers (just unsubscribe)

Learn 12 more ways to stop impulse buying online.

3. You Try to Keep Up Appearances

This is something a lot of people do.

You don’t have to keep up with the Joneses, especially if you can’t afford it.

What does this look like?

Well, you are comparing your life to others, including friends, coworkers, people in the community, family members, and more.

  • You invest in material goods
  • You purchase luxury items
  • You try to one-up your friends or those you want to impress
  • You buy things you can’t afford
  • You live an extravagant lifestyle that you can’t manage

Stop doing this.

This is more of a mindset shift, than anything.

Change your way of thinking and be happy with who you are and what you have.

4. You Have No Emergency Fund

This can definitely lead to debt disaster.

This is because emergencies almost certainly do arise!

  • You get a flat tire
  • You need emergency medical or dental surgery
  • You need a car repair
  • You get involved in a car accident and must pay the insurance deductible
  • You get hit with a high utility bill
  • You get an unexpected home repair

This is just the tip of the iceberg and by the way, the first three items happened to my family, just over the summer!

If you have no emergency fund, then that means you will turn to debt to fuel these expenses.

Start building your emergency fund now and if you don’t earn enough to start saving, get a second job.

Yes, people do take on second jobs just for the purpose of saving.

Here are some second job options to try out:

5. You Don’t Budget

This is one of the top ways you can fall into debt.

It’s because lack of planning means you overspend.

This is guaranteed to happen, every time.

Before I discovered the power of budgeting, grocery trips would rack up to $300, for a 2-person household, lasting 1-2 weeks, in an affordable area.

With some budgeting tips put into play, I slashed my bill down, by over 50%.

Can you imagine if budgeting was never implemented?

That would be overspending by double, continuously, throughout the year, year after year!

Budgeting does not have to feel overwhelming or burdensome.

There are some simple tips you can take to get started:

  • Get a budgeting app
  • Track your spending
  • Create a rewards system

Getting A Budgeting App

Getting a budgeting app is one of the easiest ways to get started budgeting.

You can do it the old school way too, with a pen and paper or using a spreadsheet but, budget apps are totally the way to go!

The app does it all:

  • Tracks your spending
  • Categorizes your purchases
  • Set you up on auto payments
  • Gives you a bird’s eye view of your financial health
  • And, more!

Recommended reading: 16 best budget apps to save you money

Tracking Spending

Tracking your spending is a big one, if you want to lower your debt.

You have to know how you’re spending money.

A few dollars here and there will add up so, monitor your spending to avoid overbuying.

A budgeting app can help with this too.

You can also try tactics like:

  • Using the cash envelope system
  • Reconciling your spending manually every week (like balancing your checkbook, but for all spending)

Rewards System

Another trick to incentivize budgeting is to reward yourself for doing a good job.

Create a rewards system with goals that will allow you to enjoy a little reward every time you meet a goal.

Some examples:

  • Treat yourself to a day of self-care at home when you save $500
  • Buy yourself lunch, when you’ve used the budgeting app for at least 30 days
  • Buy yourself a treat at the grocery store, once you’ve lowered your grocery bill by 30%

A lot of budget apps are completely free so you really have nothing to lose by starting to use one.

Give this a try!

6. You Spend More Than You Earn

How can this actually happen?

It’s a lot easier than you might think.

If you are supplementing your income with debt, like personal loans or credit cards, you CAN spend more than you earn.

It’s called living beyond your means.

Symptoms of living beyond your means:

  • Carrying balances
  • Charging necessities
  • Balance transfers

Ways to lower your bills:

7. You Make Payments Late

I touched on this a bit up above.

Why do you make payments late?

  • You forget
  • You don’t have enough money to pay on time
  • You make less than what you owe

You Forget to Pay

If you forget to pay and make your payment late, this is an easy fix.

Set a reminder.

You can set a reminder on your phone, like an alarm on your cell phone, or a computer reminder.

You can also put your bills on autopay so bills are paid on time every month, on autopilot.

Some creditors even offer you a discounted interest rate and other perks, for doing this.

You Don’t Have Enough Money And/Or Make Less Than What You Owe

If you aren’t making enough money to support your bills being paid on time, then you’ve got to increase your income.

Here’s how you can do that:

  • Second job
  • Overtime
  • Start a business
  • Gig work
  • Side hustle

Second Job

Getting a second job in addition to your primary job is a great way to increase your income.

You can work after your job, evenings, weekends, holidays or seasonally.

There are lots of options here.

Getting a second job will not only allow you to improve your financial picture by paying your bills on time but, you can also start to save.

Overtime at Work

Asking for overtime at work is probably the easiest and fastest way to start increasing your income.

Work more hours and use the overtime pay to start paying toward your debts and saving.

Starting a Business

Starting a business is a neat way to supplement your income, while building something great for yourself.

There are businesses you can start with little to no out of pocket expense, like:

  • A number of service-based business like window washing, dog training, pet sitting, tutoring, tax prep, etc.
  • Freelance-based businesses like digital marketing, social media management, web development, and related

Learn more about starting a business with no money.

Gig Work Jobs

Gig work is all the rage, today.

These jobs are growing in popularity because of their ease in starting and flexibility.

You’ll enjoy other perks like:

  • Weekly pay
  • On-demand pay
  • Casual dress
  • Comfortable work environment
  • Flexible schedule
  • Freedom to work independently

Check out this list of 35 work from home gigs that pay weekly or daily.

Side Hustles

Side hustles are an easy, quick way to start earning money.

8. You Don’t Check Your Credit Report

If you don’t check your credit report, you are missing an important opportunity to find errors:

  • Incorrect name and address
  • Incorrect accounts, balances, and payment history
  • Mistakes in derogatory payment information like charge-offs, foreclosures, collections, and bankruptcies

Check this out: Credit Report Errors: Why They Happen and How to Fix Them

9. You Are Underinsured

When this happens, an event may occur where you need to call upon insurance and if you don’t have it, then you’re out of luck.

What kind of insurance do you need?

  • Car insurance
  • Life insurance
  • Home insurance and/or renter’s insurance
  • Valuable property insurance

Car insurance is a must and it’s a law to carry liability insurance, at a minimum.

Life insurance is important to have because you never know, anything could happen.

I remember talking to a customer several years back that was recently widowed.

Her husband was in the armed forces and got life insurance to cover his family, in the event he passed away, which actually happened weeks before my call with her.

She was a stay-at-home mom and that money really came in handy, to help with funeral expenses and daily living.

The younger you get life insurance, the cheaper it is, usually.

Home insurance for a home you own and renter’s insurance for a home you rent, both important.

A lot of people miss out on renter’s insurance as a renter but if you have a mishap like a kitchen fire or theft, renter’s insurance can help.

Lastly, valuable property insurance is for valuables like jewelry, art, and other expensive goods.

You can get insurance to cover the cost in case of loss.

At the very least, you’ll have peace of mind knowing that you are financially protected with insurance.

10. You Eat Out A Lot

Eating out is one of the fastest ways to get into debt.

When our family eats out, we spend as much as a week of groceries, on one meal!

It’s a treat enjoyed every now and then but it’s not like that for everybody.

Eating out has become the norm and a ritual for many people.

  • Eating lunch out while at work
  • Grabbing morning coffee at Starbucks
  • Dinner and drinks after work with coworkers
  • Hosting clients for expensive lunches
  • Weekend pizza for the family

Here are 10 easy ways to spend less money eating out.

11. You Buy New

Nothing is wrong with buying new things but there are tons of opportunities to buy used.

Buying used gives you the opportunity to get great quality items at a fraction of the price as new products.

Some examples:

  • Car
  • House
  • Clothes
  • Electronics

Buying A Used Car

Buy new or buy used, a question asked by many who are entertaining the idea of buying a car.

Did you know that new cars lose up to 11% of their value, the moment you drive them off the car lot?

And, up to 30% value depreciation within the first year?

This is a reason many people buy used.

Other benefits of buying used instead of new:

  • Cheaper price for great value
  • Lower insurance rates
  • Cheaper registration

While most people have to go into debt to buy a car, purchasing a used car is usually more cost-effective and there’s a greater chance of being able to buy a used car with all cash than a new car.

If you are in the market for an auto, look to used vehicles.

Buying A Used House

What’s a used home?

It is a home that has been lived in before.

This is usually the norm in home buying. There is far more inventory of used homes than there are new construction homes.

A new construction home is a brand new home built for your family.

It has not been lived in before and these homes come at a premium.

When I bought my first home, I happened to buy a new construction.

Because it was the very last home for sale in the community, I got a crazy good deal but comparing the before-sale price to similar homes I was looking at, that were used, the new construction was at least $15,000 more!

So, when it comes to buying a home, get the most value buying used.

Buying Used Clothes

Buying used clothes means purchasing pre-worn or preloved clothing from consignment stores, thrift stores, flea markets, or online, in places like Ebay.

You can find some gems and really awesome deals buying used clothes.

My mother-in-law turned me onto this, years ago.

The first time I went shopping with her, we visited this consignment store and I bought 20 items for my son, for the same price I paid for 5 items at a retail store!

Since then, I frequent consignment stores for clothing buys.

Buying Used Electronics

You can get a really great deal buying a used or refurbished laptop, tablet or other piece of electronics.

Where to buy?

  • Pawn shops
  • Used appliance and electronics stores
  • Ebay
  • Amazon
  • Wayfair
  • Retail stores

12. Using Debt to Pay Off Debt


Paying debt with debt is an endless spiral that never ends.

Why do this?

People that usually use debt to pay off debt are in a money crunch, spending more than they make.

To cope with this, there are a few things you can do:

  • Lower your expenses
  • Negotiate with creditors
  • Increase your income

Lowering Your Expenses

Make more money appear in your budget by lowering your expenses.

There are some easy ways to achieve this:

  • Lower your energy use (reducing your utility bill)
  • Unplug appliances when not in use (reducing your utility bill)
  • Refinancing (lowering your interest rate)
  • Couponing (lowering shopping expenses)
  • Trying these 26 frugal grocery shopping tips (lowering your grocery bill)


Next, call your creditors and negotiate.

The goal is to lower your payments.

Lowering your payments with lowering your interest rate is ideal but sometimes your only choice is to lower your payments without a lower rate.

This is not as ideal since you’ll be paying off your debts more slowly but it can relieve some financial pressure off you, for the short-term.

First, make a list of all your creditors.

Then, pull out all your bills and review the balances, payments, and interest rate.

Lastly, get on the phone and call each creditor, negotiating a better financial setup for each bill.

At the end of it all, if you can lower your payments by 10% or more, you’re winning!

Increasing Your Income

Increasing your income through getting another job, side hustle and gig work is a great way to improve your financial picture.

More money can mean less debt.

You will have more disposable cash to throw towards bills, paying them off faster and hopefully, be able to save at the same time.

Look at these 10 tips to find real work from home jobs that pay well.

Final Thoughts

There you have it, 12 bad habits of people who get in debt!

Are you guilty of one or more of these?

What are going to do to change these habits?

Share your thoughts down below. We’d love to hear from you!

Jennifer Leach

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