Top 5 Reasons You Are in Debt

in Debt Reduction, Debts, Humor, Rant

As my regular readers know my great love for numbered lists (remember the Top 10 Bad Financial Lists), so here is one that I have most likely covered before, however for reasons you are in debt you can never be too thorough. If you are asking, “Why am I in debt?”, this is the list for you.

Top 5 Reasons You Are in Debt

The list itself is pretty straight forward please note the important explanations with each point as well:

  1. You spend more than you take in, seems pretty obvious, this is how you got into debt and what is keeping you in debt, until you take in more than you spend, you can’t start thinking about getting out of debt either, so you will need to really slow your spending down.
  2. You make less than you spend yes, seems the same isn’t it? Well it is, it’s that simple, but remember there are two ways to get out of debt, OK, there really is only 1, earn more than you spend.
  3. Your income is less than your spending, with higher spending comes higher debt.
  4. Your earnings are not keeping up with your spending and is in fact lower than it, yes, if your spending is increasing faster than your income, you will be in debt.
  5. Earnings – Spending = Negative Number, that equation seems more complex than it actually is, as long as your earnings are higher than your spending you have the potential to get out of debt (or to stay out of debt).

My apologies if this list was too complex to figure out, I am attempting to keep to my point and not muddle the message with silly commentary on my part.

Did I miss any other points? Just for clarity, what I am saying is you need to earn more money than you spend to get out of debt (and stay out of debt), questions?


  • CannyCalgarian February 20, 2014, 12:23 PM

    Love this post!

    What amazes me is the amount of people that are 5 figures into debt on credit cards and car loans but yet can still afford a week all inclusive holiday in Mexico!

    Set a budget, stick to it and don’t splurge on the unnecessary until you have the means.

  • Mortgage Calculator June 24, 2011, 7:22 AM

    In addition to the Top 5 Reasons, I would add managing one’s emotions. For example when shopping for a home, a lot of people would fall in love with a property even if it is out of their budget, and push their bank or mortgage broker for a higher approval.

    This would bring their monthly expenses very high and push them into more debt. Use a mortgage calculator and stay within budget. Find a nice home that you can pay off faster.

  • Shaun Somers June 23, 2011, 6:37 PM

    Love this post. Explaining these 5 points should be required to graduate high school.

  • The Taminator June 23, 2011, 11:32 AM

    What’s the marshmallow test?

    • bigcajunman June 23, 2011, 11:45 AM

      Simply put, you get a child and tell them they can have a marshmallow right now, but, if they wait 15 minutes (and not take the first marshmallow), you’ll give them 2 marshmallows.

  • Heather Holjevac June 23, 2011, 7:58 AM

    Managing money is that simple. Spending is a decision about what you want now vs. what you can go without. Goes back to the mashmallow test. As always, great advice.

  • My Own Advisor June 22, 2011, 9:45 PM

    Why stop at five? 😉 Good post BCM.

  • Bankruptcy Ben June 22, 2011, 8:33 PM

    I’ve got this drama at work I got asked to write a 7 point plan on how to get out of debt??? It was hard not to make points 1-7 spend less than you earn. THERE ARE NO MIRACLES PEOPLE

  • Rachel Levington June 22, 2011, 3:07 PM

    It seems pretty simple,straight-forward common sense; however, millions are still in debt and remain so.

  • Financial Success for Young Adults June 22, 2011, 11:46 AM

    I’ve heard the best way to get out of debt is to make more money or cut back. That just about sums it up.

    • bigcajunman June 22, 2011, 11:54 AM

      So you are saying you should make more money than your spend?

  • Michael James June 22, 2011, 8:48 AM

    Another way to handle money problems is to keep getting new credit cards 🙂

    • bigcajunman June 22, 2011, 9:05 AM

      Thus creating another output buffer, which can then overrun your input buffer and create a data starvation model (i.e. Debt)…


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