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5 Tips to Break Out of a Debt Cycle

Making money can be easy, spending it can be easier. We all have wants such as new tires, new electronics, new shoes, new clothes, but many times there isn’t enough money. When you spend money you don’t have or lapse on bills, you can easily fall into a cycle of debt that can be hard to break out of. You may decide to make smaller payments on your debt while continuing to purchase things you don’t need. This will only extend the cycle making it so stressful your mood, personality, and overall well-being are impacted.  

Breaking out of a debt cycle is not easy, but having worked with people just like you across the United States, we’ve identified the factors that can drive people into debt, as well as identified opportunities to break out of it. 

 

How do people get into debt?  

Over the years we’ve compiled ways people get into debt, and we hope that this helps readers identify where they stand with their finances, and ultimately put them on a path to find solutions to build better financial health. 

Some common factors that cause people to go into debt include: 

  • Reduced income – a reduction in pay due to reduced hours or wages 
  • Money management – spending more money on “wants” instead of “needs”   
  • Unemployment – changes in employment status can cause a cycle of debt 
  • Gambling – addictions to gambling and similar issues can cause you to go into debt 
  • Medical expenses – needing medical attention and not having insurance or bills that are too high 
  • Unexpected bills – bills can often be higher than expected and occasionally we have unexpected bills that seem to appear out of nowhere  

It’s important to understand what has caused your particular case so that you don’t allow it to take over your life. By identifying why you are in a debt cycle, you can find solutions and begin making changes. 

 

How does debt impact a person’s well-being? 

Those in debt can begin to experience feelings of denial, fear, panic, anger, and in many cases depression. Any of these feelings can impact family life and work life. It’s important to identify these emotions and learn to cope.  Here’s how we might respond to our debt situation when we’re feeling overwhelmed: 

  • Underestimating how much you owe 
  • Not answering the phone when you suspect a collector is calling 
  • Leaving bills unopened, just stuffing them in a drawer or tossing them in the trash 
  • Telling yourself that everyone is in the same situation 

Don’t ignore the reality of debt. It’s a real thing, but we also have real solutions to help you break that debt cycle.  

 

How to break a debt cycle 

Being in debt does not mean the end of the world. It’s a hard place to be and we understand, but there are solutions to get back on track. Breaking out of a debt cycle requires patience and time, but it’s worth it in the end. 


TIP 1: Understand your mindset 

Understand why you are in debt. Understand the situation you are currently in and commit yourself and your mind to getting out.

 

TIP 2: Change your habits 

Once you understand what happened, you can begin changing habits and improving your decisions. It’s not easy, but we’ve shared several great tips to save money in a past article. Just following one of these tips will move you in the right direction.

 

TIP 3: Go on a spending freeze 

Commit to not spending any money, other than on bills you need to pay. It will be easier to see how much you have left at the end of the month. When you commit to a spending freeze you put your “wants” on pause, and focus on the “needs.”
 

TIP 4: Remove temptations 

Know what triggers your spending. It could be visits to your favorite stores or malls. Online shopping, magazines and advertisements could lead to impulse buys. Try avoiding your triggers for a month to see how it impacts your spending (hard, but again, think of what you’ll gain).

 

TIP 5: Inspire yourself 

What is something you’ve wanted more than anything else in the world? Let that answer drive you and inspire you to succeed. Remember that in the end, breaking the debt cycle is possible and will leave you feeling great. 


Depending on how much debt you have, it may be a good idea to combine your debt into one simple payment. This reduces the number of accounts to keep track of.  An installment loan can help pay off bills that are piling up; condensing them into one, affordable, monthly payment. Visit any of our locations and speak to a Sun Loan team member to help you get started.