'Why can't I manage to get out of debt?'
Too often we're so intent on ending debt that the opposite may happen
By Mary Novak
QUESTION: Why can't I get out of debt? I want to be debt free. It seems the harder I try the worse things get.
ANSWER: Often when people find themselves in a situation where debt has piled up, the focus becomes getting rid of the debt. All extra money is put towards paying off the debt. On the surface, that seems to make
What actually happens when the debt is the focus is the opposite of what a person would think. When a
situation arises that an individual has not prepared for, such as car insurance, clothing needs, car repair,
birthdays, more debt is created. That may happen in several ways. A credit card may be used to take
care of the need. Money may be borrowed from a friend or family. One or two bills may be skipped that
month to free up needed money. Other needs may be ignored that month.
No matter what method is used, the results are the same. More debt is created. The next month more
money needs to be available to make payments and to pay on debts. This leaves less money to meet
needs and prepare for upcoming expenses.
What is a person to do? I believe a shift in thinking has to take place. The short-term savings have to
become just as important as the debt. That is a difficult concept to accept for someone focused on
getting out of debt. The only way to get out of debt is to quit creating it.
Begin a Put 'n' Take Savings. By that I mean a savings that you put money in each time you get paid. If
you do that you will be able to take out of that savings when unplanned expenses occur. Once you have
established approximately how much you need, you can use money over and above that amount to pay
toward getting out of debt.
Recently, I worked with a client who desperately wanted to pay off her credit card, which had a $2,000
balance. She was paying $300-400 a month on her bill. Each month she ran short of money. She
planned for some frequent monthly expenses like groceries, gas, entertainment and toiletries.
What she didn't plan for was infrequent expenses such as clothing, gifts, insurance and car repair.
Because of that she continued to use her credit card each month and was making little headway. After
developing a spending plan, she began paying $200 each month on her bill and started a savings account
to use instead of credit. In April, after 12 months, she will make her last payment and begin to save that
$200 for her daughter's education. She still has a hard time believing that a change so simple helped her
accomplish so much.
Remember: If you quit creating debt you will eventually be debt-free.
(Novak is a Consumer Credit Counselor with FISC/CCCS of NE Wisconsin.)
Send questions to Counselor's Corner, c/o Catholic Social Services, P.O. Box 23825, Green Bay 54305-3825. All questions will be answered in print or through the mail. Identities will remain