You work hard and barely have any time left for relaxation. Yet, no matter how much you try to push forward, you still find yourself in debt. What’s wrong in this picture? Are you ever going to be debt-free, or is this a lifelong curse that you are bound to deal with until who-knows-when? No one wants to end up having to allot a percentage of his or her income for debt payments. It’s never a fun experience to go through, and it’s only natural that you want to grow your savings and retirement funds by putting in some money in the back every month. But then, if debt payments await to be settled, how can you possibly make this happen?

This is why it is worth into common culprits that cause you to be in debt all the time. Once you have identified the root of the problem, you will be able to address the issue in a more practical and more effective manner. Thus, the ordeal with debts may finally be over soon!

1. Low income leads to more debts

Perhaps your income is not always sufficient to cover for your basic needs. In fact, you may end up having to use your credit card too often to pay for your weekly groceries or even to settle your utility bills. The more you use your card, the farther and deeper in debt you can get. Otherwise, you can always use alternative measures to such as personal loan to pay off your monthly bills. Unfortunately, it is easy to get stuck in that cycle, and you may have a difficult time getting out of it unless you find a way to stop this problem over time.

Sure, using your credit cards offers a convenient means for you to make your payment whether it is online or not. Not enough money? Pull out that card from your wallet, swipe it in the terminal, and your bills are paid in an instant. But then, you have to face the reality that eventually, you will need to face that credit card statement with a 5- or even maybe 6-digit debt waiting to be paid. This is a nightmare that no one wants to wake up to each day!

If you think that your current job does not pay much, and your cost of living is a little too high for what you are making each month, it is time to seriously think about raising your income. You may consider getting yourself a part-time job or even maybe look for a cheaper apartment that you can rent. The idea is that you can still save some money instead of simply putting in all of your monthly salary to your credit card payments. This way, you can start growing your retirement money, or at least have a good amount for your emergency funds.

2. Being someone you are not can be a major financial trap

It is okay to have ambitions. In fact, these fuel up our desire to be the best version of ourselves. But the thing is, if this leads to setting up a false idea of who we are and trying to keep up with the Jones all the time, then the trouble begins. For instance, you want to be seen as someone who is rich and famous, an elite who rubs elbows with popular and powerful celebrities. So, you aim to own a flashy Mercedes or a gorgeous condo unit in some glitzy location in Singapore. The sad thing is, people have no idea that you are only renting your expensive car and condo – none of these are all yours.

Meanwhile, the cost of renting these just hike up each month. You accumulate more debts, and you end up struggling financially. The bottom line – vanity and boastfulness will never get you anywhere. Well, except maybe in deep, deep water.

3. Depression hits you and everything else goes downhill

Don’t you just notice how hard it is to move and get things done when you are feeling sad about your situation? The only thing you want to do is to stay in bed instead of waking up early to start your day and go to work. This impacts your performance not only in your career, but most importantly your personal life. This is the reason why people begin to get behind schedules and deadlines, which can be detrimental to their credit score. Once they fail to manage debts and bills to be paid, interest rates and penalties just accumulate until the whole thing becomes a big problem you are afraid to face.

So, what can you do if you are facing a massive debt that needs to be settled? This can be a very stressful and anxiety-filled experience for you, but then again, you need to try to calm down. Otherwise, nothing can be accomplished if you let your emotions get the best of you. Try to be more optimistic instead of dwelling with your fears, worries, and stress. While the whole issue is all because of decisions you have made in the past, this does not mean that nothing can be done to solve it. Slowly, you can recover from your debts, as long as you come up with a plan. You may try dividing your overall debts into smaller chunks. Determine when these are due to be paid, then minimize your expenses to have some money for your payments and savings. Eventually, you will be able to get over the terrible hump with making debt payments as you stay focused on your goal.

4. Go beyond the minimum payment

You use your card, yet you avoid paying the whole amount in full. Without any idea of what’s going on, your bill multiplies in amount over time until it gets very stressful for you to pay the principal and the interest rates combined. Keep in mind that paying for the minimum balance is NEVER the best way to deal with your credit card bills because the interest rates just spike up as days go by. If possible, do your best to pay the entire amount that appears on your credit card billing statement. There may be the temptation to settle just the minimal fee, but don’t fall into this trap. Aside from paying in full, you should be sure to settle your debts on time to avoid penalties building up.

5. Stuck on the holiday fever

You hear the captivating Christmas jingles playing at the mall, or perhaps the catchy tune that tells you all about the big sale happening at your favorite store. The next thing you know, you can barely grab all those shopping bags with two hands – and you can just imagine what your total credit card bill will be like once it comes!

Sure, it is fine to shop during the holidays. If you have kids, or you just want to treat yourself to a nice pair of shoes or bag, there really is nothing wrong with it. But what is completely not right is if you constantly buy items on impulse and not thinking about the consequences to your bank account. Now that will be the cause of your migraine headaches in the very near future! You may be having a great time shopping today, then you will probably want to forget the whole thing in a few weeks’ time because of the debt payments that need to be made.

The smartest and most effective way to stay away from the extravagant holiday shopping is by making a list – and be sure to bring it with you and stick to it – no matter what. It will also help if you avoid being with people who are known to be big spenders whether it is the holiday season or not. This way, there will be no one and nothing to pressure you to bring the plastic out and max out on your credit card.