Why People Decide to Finally Get Out of Debt (and How They Do It)

Published October 7, 2018

According to data from the Federal Reserve, a typical household carries $137,063 in total debt. The average credit card debt alone for a U.S. household is around $16,883. This just goes to show that having debt—even substantial amounts—is commonplace in our country. This is especially true given that the cost of living has risen faster than income, forcing many Americans to take on debt to cover necessities.

But many people get out of debt at some point in their lives. This begs the question: Why do people decide to finally get out of debt? And once they make this choice, how do they go on to actually accomplish this challenging task?

Because people are so varied in their personalities, lifestyles and types of debt, there’s no singular reason why people decide enough is enough. However, there are a few common motivators to consider.

Reason #1: Debt Is Stressful

Debt can be downright anxiety-inducing. People frequently feel shame, frustration or stress surrounding their debt. Not only does this affect people’s own mental health for the worse, but it may even drive a wedge into relationships if the debt becomes severe enough. Consider these statistics from the Journal of Accountancy:

  • 31 percent of Americans with debt “worry about it in general.”
  • 25 percent of Americans with debt “stress about it at bedtime.”
  • 18 percent of Americans with debt “worry about it at work.”

All that worrying uses a lot of brainpower. As such, many people decide to put effort into eliminating debt because they’re sick of living with money-induced mental strain. Becoming debt-free is like turning over a new leaf, allowing people to clear their minds and regain control.

Reason #2: There’s a Major Life Event on the Horizon

Major life events tend to cause people to reflect on where they are in their journey and where they want to be. And, since financial health is tied into many major life events, it only makes sense that people would use them as an opportunity to take action.

A couple planning on having children soon might decide to first focus on paying down their debt so they have more financial stability established by the time the first baby arrives. Another person might set a goal of moving across the country to fulfill a lifelong dream—but decide to tackle debt beforehand so it’s one less thing they have to lug along. Someone hoping to propose to their partner soon might first want to get their finances in order by tackling their credit card debt before joining finances.

Reason #3: It’s Time to Accomplish a Financial Goal

Simply put, debt stands in the way of other financial goals. Sometimes that’s all the reason a person needs to kick debt to the curb. For example, someone with extreme debt may have a more difficult time getting approved for a mortgage. Debt certainly holds people back from saving for retirement and investing. Treating debt like a hurdle to a larger goal is a good way to motivate yourself to act.

Strategies for Eliminating Debt

Actions matter more than intentions when it comes to debt relief. Consumers must research their options carefully before committing to any specific strategy. Someone with substantial credit card debt may determine that debt settlement is a viable option—but there’s still the crucial step of verifying the legitimacy of potential programs. Consumer reviews are your friend in this regard. For instance, Freedom Debt Relief reviews reveal a 4 ½ star satisfaction rating from more than 5,500 consumers in the last year.

Others decide to handle debt on their own, especially if they are starting with lesser amounts of debt. Many experts recommend targeting one balance at a time as a tactic for staying on track.

There are many reasons people get out of debt, and even more ways they do so. The make-or-break factor is whether people can turn their motivation into action by sticking with whichever debt relief strategy they choose.

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