These 10 Habits are Keeping you in Debt

There are 10 habits keeping you in debt.

I never believed there would be a day when I would become debt free.

It was during a Quarter-Life crisis that I had enough. Read about this here. I was paying $1,536.15 per month on student loans and because of my high consumption lifestyle, I continued to have a negative net worth and no money to save at 28 years old.

Because of this, I finally had enough and decided I was going to pursue debt freedom, no matter the doubts I would hear.

It took me 7.5 years to pay off $180,000! I’ve learned so much on the way and would like to share what I’ve learned with you.

To become debt free, here’s what you should let go of:

  1. Self doubt
  2. Paying attention to other peoples’ opinions
  3. Not having clear goals
  4. Having no budget
  5. Unnecessary spending
  6. FOMO (Fear Of Missing Out)
  7. Procrastinating
  8. Having only one stream of income
  9. Taking on more than you can handle
  10. Thinking other people should help you financially


Self Doubt

I’m the type of person who doesn’t want to be misunderstood.

If I say things I think can be misconstrued, I start to doubt myself. In turn, I become timid, shy, and only talk when asked a question.

It took me 32 years to learn how to break through self doubt; via education and experience. If I have something to contribute, I make sure it’s useful to others and in good taste.

Education is an important tool. The more you know, the more confident you become in your own decision making ability.

A few years ago I wanted to learn how to make the most out of the earnings from my second job. I googled “how to get out of debt.”

Dave Ramsey popped up on YouTube. During my hour long, 16 mile commute to the west side of Los Angeles, I played all the videos (listening to the audio only, of course) and then moved on to his podcasts.

To add to my new perspective on personal finance I moved on to books and audiobooks: Rich Dad, Poor Dad, The Richest Man in Babylon, The Millionaire Next Door, and other classics.

The personal finance books that helped me most are listed here.

After absorbing all this new info, my mind was overflowing with information. I thought, why isn’t any of this common knowledge?

“Without knowledge action is useless and knowledge without action is futile.”

Abu Bakr

Putting education into action is even more important than being educated.

Through the trial and error of each experience you’ll gain confidence in your own ability to take action.

I took what I learned from the personal finance gods and little by little I started cutting out unnecessary expenses, sticking to a budget, and setting goals.

What would’ve happened if I didn’t put any of what I learned into practice? I would’ve stayed doubting myself, never started my debt free journey and continued the commute to my second job, listening to personal finance gurus, and not getting ahead financially.


Paying attention to other people’s opinions

When I graduated college, many friends and coworkers of mine were in the same boat: millennials establishing themselves in their career, wondering how the hell and when we’ll ever escape debt.

The most popular opinions were: 1) we’re always going to be in debt and 2) having student loan debt is normal.

“Student loan debt is good debt”

A friend

The same people who have student loan debt will tell you that it’s good debt. With this mindset I didn’t think twice about the counterproductive ways having student loans prevents you from attaining financial goals.

“There’s always something that’s gonna keep you in debt.”

A coworker

With this reasoning in my mind, I continued my high consumption lifestyle. I thought, I’m always gonna have debt so YOLO

“We both know that Katrina can’t afford to live in Los Angeles.”

A family member to another behind my back.

These words probably hurt the worst. Some of my family members saw me as a broke millennial.

It was true, I had a negative $180K net worth and I’d been living with my mom. I felt like I had something to prove to gain approval from this family member.

I moved out of my mom’s and into an apartment. I was functioning without a financial plan or budget and pretty soon my net worth plummeted even more.

If you’re paying too much attention to other people’s opinions about you, you tend to adjust yourself to please them.

When you’re busy pleasing others you displease yourself.

Choose to go against the grain and prove to yourself that you can achieve whatever goal you set.


Not having clear goals

My goal at the beginning of my journey to debt freedom was, verbatim, “Pay off student loans.” There was no when, where, why, and most importantly, HOW, that was included in this goal.

I had no road map, so I continued to travel in circles.

The best way to set a goal is to create a SMART goal. Read more about this here. Is your goal Specific, Measurable, Attainable, Realistic, and Time-Bound?

This is what will navigate you to your destination, giving you clear instructions on how to get there.

So what would’ve made my goal a SMART goal? “My goal is to pay off $180,000 in student loans in 7.5 years by increasing my income, sticking to a budget, and controlling my spending habits.”

“Pay off student loans” is not attainable or realistic because there’s no road map.

If a goal seems unattainable I give up easily because of the overwhelming feeling of not knowing where to start.

Chopping things down into small steps helped, and the first step was starting with a budget.


Having no budget

My budgeting mindset as a newly graduated college student went like this: “I get paid $1,500 therefore I can spend $1,500.”

I threw in uncontrollable credit card usage to the mix and before I knew it, I had $2,000ish in savings, $2,000ish in credit card debt, $140,000ish in student loans, and a lifestyle that was so out of control that I can’t even put a dollar amount to it.

My lack of oversight in money matters proved itself; I was stressed and in debt.

Everyone needs a budget! Even Fortune 500 companies function off zero-based budgeting. Read about zero-based budgeting here.

To summarize, take the total of your paycheck and subtract your expenses, debt payments, and however much you’d like to save and/or invest. The total should equal zero.

This doesn’t mean you have $0, this just means every cent you made is accounted for and sent to the right place. Repeat this process every payday.

Don’t expect yourself to be perfect once you start budgeting. It took me 3 years to actually be good at it.

I still falter when it comes to personal expenses, but I did manage to cut out the unnecessary spending.


Unnecessary spending

My high consumption lifestyle contributed to my lack of ability to save money and pay down debt. Each month I spent $317.98 on things I didn’t need. Read about what I no longer spend money on here.

I had the need to get my “hair done, nails done, everything did.” My monthly memberships included HBO Go, Netflix, Apple Music, and CorePower Yoga. Not to mention spending about $20 on fast fashion items and another $25ish on the latest Sephora product.

The easiest way to cut expenses out is to ask yourself if this is something you NEED or something you WANT.

I crunched the numbers. By cutting these out of my budget I saved $3,815.76 yearly. 

Knowing that I could save this much money every year changed my mindset and made me realize these things just ate up my cash flow.

This doesn’t mean that I think getting your “hair done, nails done, everything did” is a complete waste of money, no. We can certainly cut down on the frequency of spending for it and budget for them when needed.

My life hasn’t changed even though I cut out HBO Go, CorePower Yoga, and the other monthly memberships I used to have. It turns out I didn’t need them at all.

I’m proud of the lifestyle change because I save money doing it.


FOMO (Fear Of Missing Out)

Before aggressive debt pay off my social life was at an all time high! I went to every festival, concert, tried a new restaurant each week, constantly went on vacations, etc.

I didn’t want to miss out on anything so I went everywhere my friends where. In turn, FOMO cost me $3,489. Read about this here.

Once I got into the habit of going out frequently, it was definitely a hard one to quit.

I felt left out when I started to stay home more. I didn’t want to seem like I was blowing off my friends every time they went somewhere.

Since being able to control my spending and achieving my financial goals, I don’t feel bad when I choose to miss out.

Staying home gave me more time to be productive. I dedicate specific times to work on my goals and get to the tasks I was procrastinating on.



Think about all those times you planned on doing something and put it off to the next day. Then the next day comes, you put it off again, and so on and so forth.

The next thing you know, you’re like the old me, 4 years since graduation have passed, and you’re still $140,000 deep in student loan debt.

What causes procrastination?

“One of the biggest factors contributing to procrastination is the notion that we have to feel inspired or motivated to work on a task at a particular moment.”

Kendra Cherry

This is one reason for procrastination among many, and reflects one of the biggest challenges for me. When I come to a specific task that I’m not exactly feeling too keen on doing, I put it off.

The reality is, it’s impossible for someone to feel inspired at every moment in a day. 

So how do we combat this?

Figure out a time that is most productive for you. For me it’s in the morning. If you’re a night owl, then late nights would be better for your productivity levels.

Use this time, on your days off of course, to work on your goals. You don’t need to feel inspired to do it, just do it. I use this time to budget and check in on the progress of my monthly personal goals.

By sticking to the habit of setting aside the time, it’ll become second nature, and you won’t have to even think about doing it. Just do it.

Create that budget, monitor your spending, and see what else you can accomplish during this time.


Having one stream of income

If you live in a high cost of living area such as Los Angeles, it’s daunting to think about how you’ll ever get ahead with your finances.

You’re juggling between keeping up with the cost of living, paying off Fedloans with an average of 5.25% interest, a Wells Fargo student loan with a variable interest rate at 6.5% that can increase at any second, credit card debt with 19% interest, contributing 7% to your retirment, and saving money so you can one day own a home.

Unless you only eat beans and rice, don’t have kids, or have successfully cut out everything from your budget, it’s difficult to gain any traction in paying off debt. 

When I decided to get a per diem job, I put every cent I earned toward my student loans.

I used my full time income to pay for my monthly expenses and student loan debt. Then poured all of my per diem income into my student loan debt.

By doing this I managed to pay off $36,000 in 6 months! Read about this here. 

As a nurse there are many opportunities for part-time or per diem work. For those not in the healthcare field, there are resources for side hustle ideas shared on the internet. Read this list of 50 ideas for side hustles here.

Many people I know drive for Uber, deliver with DoorDash, sell their creations on Etsy, teach kids online with VIP Kid, etc.

I have so much respect for the side hustlers out there! They dedicate their time and own resources to help others.

A word of caution for side hustlers out there, you’ll know when you’ve taken on more than you can handle.


Taking on more than you can handle

One thing about social media that I don’t appreciate is the glamorization of being busy. There’s a difference between being busy and being productive

Being busy is rushing from one place to another but not being mentally present, creating a to do list but not crossing of a thing, or just straight up doing things that take you further away from accomplishing your daily goals.

Being productive is not overbooking yourself so you don’t have to rush, being mentally present in your activities, and accomplishing your goals for the day.

When I was working full time with a per diem job, I also took responsibility of two committees at work. I worked 52 hours a week and once worked 8 days in a row.

I was exhausted physically and mentally, which showed through my mood and productivity levels.

Sure, I was able to pay off debt so much faster, but the effects on my mental health led me to unproductive coping mechanisms.

I turned to stress eating and gained weight. My stress level made my face break out worse than it ever did when I was an adolescent. This then tied in to my self esteem.

There’s such a thing called caregiver burnout; my days consisted of taking care of others at work while ignoring my own health.

It was time for a different approach. I studied and took classes for a nursing certification in my specialty to add to my experience, which made me a more knowledgeable, competitive candidate.

I’m humbled to have been given the opportunity for a higher paying job, one that pays more than both of my full time and per diem jobs combined.

Instead of filling my days rushing from one place to another, not being mentally present, I’m thankful to be fully present while taking care of others and having more time to take care of myself.


Thinking other people should help you financially

In the past I found myself having the thoughts of an entitled person; “The government should forgive the loans of people who work in health care” or “My parents should give me money to pay off my loans.”

After writing and reading this, I feel so disgusted.

Why did I ever believe that it was the responsibility of others to bail me out of a situation that I put myself in? Nobody ever forced me to take out student loans, it was my own doing.

As a young adult I made an uneducated decision to take out large sums of money without understanding the repercussions of how it would affect my financial state in the future. This realization was a hard pill to swallow. 

You need to take responsibility to help yourself. Figure out a plan that will get you out of debt. Neither the government nor your parents have that responsibility.

If you wait for others to help you get out of debt, you’ll be waiting a long time.


How badly do you want to pay off your debt?

“It’s supposed to be hard. If it wasn’t hard, everyone would do it. The hard is what makes it great.”

Jimmy Dugan, A League of Their Own

It’s not easy; realizing you put yourself in a precarious financial position, starting a budget, changing spending habits, and not listening to other people’s opinions.

The degree of our action boils down to one motivating factor: how badly do you want to pay of your debt?

When you first prove to yourself that you can accomplish your goals, you’ll continue to push it a step further.

As long as we can properly educate ourselves and take appropriate action, we’ll live a life of attaining goals that take us closer to reaching our dreams.


Millennial Challenge

  • What habit will you give up to get out of debt?

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