When it comes to financial health, the journey toward wealth-building often starts with one simple realisation: Debt is not your friend.
For years, I was caught in what I like to call “debt or credit card roulette,” constantly shifting balances and living beyond my means. It wasn’t until I changed my mindset that I began to see a real path toward growing my wealth.
If you’re looking to break free from the chains of debt and start accumulating investment-grade assets, it’s time to confront the money mindsets that may be holding you back.
Here are five common beliefs that keep people trapped in debt—and how you can overcome them.
1. “I’ll Deal With It Later”
Procrastination is one of the biggest enemies of financial freedom. The mindset of “I’ll deal with it later” might seem harmless, but it’s a dangerous trap.
When you delay addressing your debt, you’re essentially giving it more power over your life. Interest compounds, minimum payments become more burdensome, and before you know it, your debt feels overwhelming.
In my own experience, this mindset was a significant hurdle. I used to tell myself that I could handle my debt “later” while focusing on immediate pleasures. But “later” never came until I realised that my financial future depended on my actions today.
Once I started proactively managing my debt—by creating a plan, setting realistic goals, and sticking to them—I began to see a clear path to wealth accumulation.
Remember, debt doesn’t disappear on its own. The sooner you take action, the more control you’ll have over your financial destiny. By prioritizing debt reduction, you’re laying the foundation for a future where you can focus on growing your wealth instead of just managing your debt.
2. “Everyone Has Debt – It’s Normal!”
In a world where debt is often normalised, it’s easy to fall into the trap of thinking, “Everyone has debt—it’s normal!”
While it’s true that debt is common, that doesn’t mean it should be accepted as a permanent part of your financial life. This mindset can prevent you from achieving true financial freedom and keep you from reaching your wealth-building goals.
For years, I believed that debt was just a part of life. After all, everyone I knew had credit cards, loans, and mortgages. But as I started focusing on my financial future, I realised that living within my means was crucial.
Debt wasn’t the answer to wealth; in fact, it was the very thing holding me back.
Breaking free from this mindset starts with redefining what “normal” should look like in your financial life. Instead of accepting debt as a given, strive for a life where debt is minimised or eliminated, and where your money works for you—whether that’s through investments, savings, or other wealth-building strategies.
3. “I Don’t Want to ‘Go Without’ – Life Will Suck While Paying Off Debt!”
The fear of missing out (FOMO) is real, and it can be a powerful motivator to stay in debt.
The mindset of “I don’t want to go without—life will suck while paying off debt!” keeps many people trapped in a cycle of spending and borrowing. It’s the belief that if you cut back, you’ll be sacrificing too much, and life will be less enjoyable.
I used to worry that paying off debt meant giving up all the things that made life enjoyable. But I soon learned that it’s not about deprivation; it’s about prioritisation.
I found ways to enjoy life while making smarter financial decisions. For example, I started valuing experiences over material possessions, which allowed me to cut back on unnecessary expenses while still enjoying a fulfilling life.
You don’t have to sacrifice your happiness to reduce your debt. Instead, focus on what truly matters to you and find a balance that allows you to enjoy life while making progress on your financial goals.
The freedom you’ll gain from reducing your debt will be far more satisfying than any temporary pleasure you might miss out on.
4. “What’s One More Purchase, Card, Loan? Add It to the Pile!”
Another common mindset that keeps people in debt is the “What’s one more?” mentality. Whether it’s an extra purchase, a new credit card, or another loan, this mindset can lead to a slippery slope of accumulating more and more debt. Before you know it, the pile of debt has grown to unmanageable levels.
I remember falling into this trap myself. Every time I made a purchase I couldn’t afford or opened a new credit card, I told myself it was just one more thing. But over time, all those “one more” decisions added up, making it harder to focus on my long-term financial goals.
Breaking free from this mindset requires a shift in perspective. Instead of thinking, “What’s one more?” start asking yourself, “Is this helping or hurting my financial future?” By being mindful of each financial decision and focusing on your long-term goals, you can stop adding to the pile of debt and start reducing it.
5. “It’s Too Hard with Rates This High”
With interest rates on the rise, it’s easy to feel discouraged and think, “It’s too hard with rates this high.”
High-interest rates can make it seem like you’re fighting an uphill battle when it comes to paying off debt. However, focusing on the challenges instead of the solutions can keep you trapped in debt longer.
When I was facing high-interest rates, it felt like progress was slow. But I learned that the key is to keep your eye on the long-term goal: financial freedom and a comfortable retirement. By focusing on reducing debt, even in the face of high rates, I was able to eventually see the benefits in my investment portfolio and cash flow.
It’s important to remember that reducing debt is still possible, even when rates are high. By creating a plan, prioritising high-interest debt, and staying committed to your financial goals, you can overcome this obstacle.
The sooner you start reducing debt, the sooner you’ll free up cash flow that can be redirected toward investments that will support your lifestyle in retirement.
Conclusion
Debt can feel like a never-ending cycle, but it doesn’t have to be.
By challenging these common money mindsets and taking proactive steps to reduce debt, you can start building a path toward financial freedom.
Remember, the goal isn’t just to accumulate assets—it’s to ensure that your investments provide the income stream you need in retirement. Reducing debt is a crucial part of this journey, as it frees up cash flow and allows your investments to truly work for you.
So, take a moment to reflect on your own debt scenario. Are any of these mindsets holding you back? If so, now is the time to make a change. By focusing on reducing debt, you’re not just improving your financial situation today—you’re setting yourself up for a wealthier, more secure future.
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