For some people, debt is a tool to create assets. However, if you are doing so, you are asking for trouble. Debt can be a solution to your money problems provided you handle it smartly. If you fail to pay off, you will naturally end up with a debt trap.

Although you can find it pleasing to fund your needs with debt, it actually robs your future and prevents you from building wealth. Time passes by, and you keep rolling over and over. First, you fall in the category of subprime borrowers and then end up with a CCJ.

Well, debt becomes a problem when you borrow more than your repaying capacity. Whether you are taking out a secured loan or bad credit loans in Ireland, you will naturally have a problem if you do not take into account your affordability. However, there are some other reasons too, why it isn’t very easy for some people to live a debt-free life.

It is hard for you to sacrifice

If you have sunk in debt up to your nose, you should immediately change your lifestyle. Can you resist not eating out for a full month? Can you cut subscriptions of your cable or magazine? You will have to make such sacrifices if you want to get out of debt. If you are serious about debt settlement, you can easily do that. If you fall to the temptation, remind yourself why you are doing so.

You want to keep up with the Joneses

Another reason why you are stuck in debt is you are keeping up with the Joneses. One of your friends has bought a car, so you will also buy to keep up with their class or status. You should not bother what your neighbours, friends and colleagues are doing in their lives.

Everyone has different financial circumstances, so you should spend money only if your pocket allows. The people who are buying luxurious items are likely in debt. Therefore, it is always advisable not to fritter away money to keep up with your friends.

A rule of thumb says that you should spend on things that are necessary to buy, and the spending limit does not need to be more than your pocket allows. For instance, you should not buy branded clothes to show off your friends when you cannot afford them. It is your life, and it is your money. Spend it to please yourself not to please others.

You have a lot of excuses

One of the significant reasons for not getting rid of debt is you do not set it as a priority. Once you have got multiple debts to handle, you start making excuses like interest rates are high, you do not have enough income, and so on, but you do not realise that you are falling into debt more profound and deeper because you are not cutting back on your spending.

Paying off debt is no joke. You will have to create a budget to track your outgoings. Take stock of your spending and see if your budget allows you to have some wiggle room. The more you cut back on your expenses, the sooner you will be able to repay your debt. It may seem hard in the beginning, but it will ease off the debt burden.  

Your income is not enough

It does not make sense to blame your income because it clearly indicates that you borrowed more than your affordability. Although lenders evaluate your income while signing off on loan, you cannot wiggle from your responsibility.

Credit card swipes quickly add up the debt. First off, you should not have borrowed money more than your repaying capacity, and if you have done so, you should figure out the ways to increase your income.

Debt should not be criticised for financial problems. It can help solve your money problems provided you are not borrowing more than your repaying capacity. However, sometimes you borrow money to keep up with your neighbours and friends that do not make sense. If you actually want to live a debt-free life, you will have to stop doing all things that pull you back from doing so.