25 Things That Are Getting You Deeper Into Debt

Couple managing the debt.
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Dealing with debt can be a difficult thing. While the struggle to keep up with the cost of living can often be a challenge, managing that while trying to pay down money owed can seem overwhelming.

However, there are quite a few habits that can not only lead to debt, but keep that debt going in a seemingly unending cycle. Luckily, these habits can be easy to break, so long as you’re aware of the pitfalls, and make a commitment to break free of the debt holding you back. Here’s a rundown of what many of those habits are, as well as some key advice from financial experts on how to not let them get the better of you.

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1. Watching Shopping Networks
“Mindlessly watching the shopping networks when you’re stressed with your credit card in hand,” said Felicia Gopaul, Premier Woman’s Wealth Builder at Financial Planning. This impulse can be a major factor for people in debt, particularly those who engage in retail therapy.

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This sentiment extends to shopping on your devices. With shopping apps at your fingertips 24/7 and social media constantly advertising a stream of influencer-approved products at “limited time” prices, you’re bound to be tempted by something you never even knew you wanted, let alone needed.

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2. Overspending
While this is one of the consequences of window shopping, overspending in general is a common habit of people struggling with debt. “It can be easy to spend an additional $5 here and $10 there when shopping, but this can quickly cause you to overspend,” said Tony Wahl, Director of Operations at Credit Sesame. “Small purchases add up, and before you know it, you’re way over budget. Continuing to overspend can easily keep you in debt, even if you’re trying to pay it off.”

3. Going Back to School Without a Plan
While the pursuit of higher education can be great, it can be a bigger financial burden than it’s worth. “Going back to college for ‘another’ degree while you are still paying off your previous degrees just to satisfy your ego without any expectation that it will lead to more income,” Gopaul explained. If you’re looking at going back to school, check to see what state your existing loans are in beforehand.

4. Using Debt to Pay for Education
Education is the cause of a tremendous amount of debt in the U.S. today. Bobbi Rebell, personal finance expert at Tally conceded that while you can’t put a price on loving your child, “the bills and the interest from debt used to support kids do have a price tag.”

Rebell says that a big problem for parents today is using debt to pay for education. “The intention is good but parents need to be realistic about the amount of debt they can take on, and the impact it will have on their own financial goals not just now but going into retirement.”

She also warned to avoid more appealing loans that have higher interest rates.

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5. Looking for Convenience
One big reason people end up in debt is due to “pulling out your credit card to pay for items because you don’t carry cash,” said Gopaul. While it can be more convenient, it means every purchase adds to your debt — and it can be easy to let that kind of spending get out of hand.

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6. Using the Wrong Credit Cards
Spending on credit is never a great idea if your goal is to get out of debt, but companies can make points and rewards programs to lure new users. “Credit card companies have excellent marketing and will often set up programs that gamify spending,” Rebell said, adding “but debt is never a win.”

7. Using Retail Store Cards
Speaking of the wrong kind of cards, those offered by retail outlets may seem tempting but often come with higher than normal interest rates. “Retail stores may try to lure you to sign up for their credit card usually by offering you a major discount on your purchase,” Wahl said. “Oftentimes, retailer credit cards also have higher interest rates and could cost you more in the long run if you don’t pay them off in full, getting you deeper into debt.”

8. Only Paying the Minimum
While paying for all monthly expenses by credit card is a viable way to means, it only really works if the balance is paid in full every month. Otherwise, it’s easy to fall into a pattern of only paying the minimum balance, meaning those interest charges begin to add up, meaning you’ll pay even more per month.

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9. Paying Bills Late
Even if you’re not paying bills with a credit card, paying them after the due date usually means you’ll be paying a late fee, too. “It’s critical to pay your bills on time since a missed payment could drastically impact your credit score and cause your debt to pile up,” said Wahl.

10. Not Tracking Spending
Oftentimes, simply keeping track of what you spend can help wrangle in any frivolous tendencies. “One of the most common bad habits is not tracking your spending through some form of low-level budget,” explained Scott Nelson, founder of MoneyNerd. “Without a budget, people often spend carelessly without understanding of the implications it may have in the long term.”

11. Focusing on the Wrong Debt
There are many different systems out there designed to help consumers pay down their debts more efficiently. Find out which one works for you, which usually involves focusing on the high-interest payments first, and going for there. Looking to get out of debt? Here’s GOBankingRates’ guide to making it easier.

Ultimately, the best habit to adopt when trying to pay off debts is simply setting realistic goals and sticking to them. Once you’ve committed to this plan, it’s likely you’ll start to see that debt start to shrink.

12. Being Wasteful
Sometimes staying in debt boils down to bad habits. “It often means people are wasteful with their money whether it is spent on monthly subscriptions that no one uses,” Nelson said. That kind of spending can also end up going to “expensive bills that can be found much cheaper elsewhere or on consumer goods and impulse purchases.”

13. Overpaying
Frequently, people can end up overpaying for basic services like phone or internet. Look at what plans and services are available in your area, and compare that with what you’ll need. A little research can lead to big savings for some month-to-month expenses.

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14. Going For Immediate Gratification
While no one doubts shopping can be fun, it can be a major contributor to ongoing debt. According to Nelson, people often focus on the feeling they’ll get making a purchase now rather than looking at the big picture. Saying no to yourself now could lead to a brighter financial future — especially in the case of big purchases and emergencies.

15. Not Doing Your Research
There’s the old saying about how if a deal seems too good to be true, it probably is. “People find themselves in this situation whereby they are using financial products to buy what they can’t afford, a terrible habit of not reading the terms and conditions, not researching the product or to fully understanding the payments they have to make occurs which leads people even further into debt,” Nelson said. “This is where interest and fees build up and people find themselves having to take on more and more debt just to survive.”

16. Not Living Within Your Means
Relying on credit makes it easier to live beyond your means. Or, as Michael Sangirardi, Certified Financial Planner with Ameriprise Financial called it: “Fake it until you make it.” Sangirardi went on to explain that “it is far more effective to live within your means instead of allowing financial creep to impact your financial health.”

17. Believing in The Scarcity Mindset
There’s a definite high-pressure mindset when it comes to home-buying these days, driven by unusually low interest rates. Rebell said these have “caused a lot of people to feel the clock ticking to buy a home when they may not be ready for that type of long term financial commitment.”

Rebell said that the urgency of needing to buy, especially right now, is likely driven by a scarcity mindset. “This is the belief that if I don’t buy now, there won’t be any affordable homes left for me to buy later. It often drives people to make knee-jerk financial decisions, and skip things like home inspections — which can turn the home into a money pit down the road.”

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18. Counting on Risky Investments
While investing in up-and-coming businesses can prove extremely lucrative, nothing is a sure thing. “If I invest in a startup, I won’t need to save a portion of each paycheck,” is a strategy that Sangirardi cautioned against. “Startups that succeed are genius for those able to get big payouts; however, the surest way to succeed financially is through saving and investing regularly (from each paycheck or monthly) over a lifetime.”

19. Not Investing
On the other hand, smart investing can be a way to help build wealth over time. While debt reduction should usually be the primary focus, it’s worth examining your investment options if you have the means.

20. Filing Taxes Late — or Not at All
Like all expenses, if due dates aren’t met (or ignored outright), there are usually financial consequences. However, the IRS is often open to working with people to help debts get paid down quickly.

21. Not Trying to Negotiate
If you’re struggling to keep up, it’s possible to try and negotiate better rates on your services, advised Wahl. “Even your credit card interest rate is often just a matter of calling your provider directly and asking what kind of arrangement can be made,” advised Wahl. He recommended a firm but non-confrontational attitude to see what can be done. “By lowering your bills, you might be able to pay them off more quickly, making it less likely to stay in debt,” he added.

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22. Carrying Unconsolidated Debt
Similarly, if you’re carrying debt on multiple cards, the collective interest rate could be overwhelming. Check to see if you qualify for a consolidation or forgiveness program. This can help dramatically lower monthly payments, as well as put all your debt into one place as a means to help pay it down more quickly.

23. Not Refinancing Loans
“Refinancing your student loans is a great strategy to pay off your student loans fast,” Wahl explained. “Every situation is different, but refinancing could mean you’re in a better position to pay down the principal and minimize debt as quickly as possible.”

24. Keeping Mum on Money
Like tracking your spending, being frank about your financial situation can be beneficial. Sangirardi said to “engage in honest conversations” rather than staying silent about it. “You don’t have to share money, but you do need to share information, goals, and priorities.”

25. Going at It Alone
Sometimes, the best decision is to have a professional come in and try and sort it all out. “Consider hiring a financial advisor to help discuss goals or even mediate difficult financial conversations,” Sangirardi said.

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Last updated: Oct. 13, 2021

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