The Real Reason You’re Still in Debt (and How to Fix It!)

Are you deep in debt and not sure why you’re still struggling? I’m here to share with you the number one strategy to end the cycle – it worked for me and I know it will for you, too.

It involves unexpected expenses.

Most of us are smart enough to know that if we keep charging groceries or restaurant bills, we’ll keep ourselves in debt. But what about those unexpected expenses? Do you reach for your credit card then?

It seems so innocent… just a quick swipe here and there. But it adds up and pretty soon you’re deep in debt and you have no idea how it happened.

How Unplanned Expenses Keep You In Debt

Those unexpected expenses will get you every time. I know. Because I’ve been there. (More than once!) And this is the reason having an emergency fund is my number one strategy to getting out of debt.

The biggest and most financially damaging are unexpected medical expenses. This is one that is near and dear to my heart because it’s one my family has been struggling with. And it’s a sensitive issue, so please be prepared.

You see, three weeks ago, I had a miscarriage.

This was our second one (our first was in August 2016). It’s been an absolutely heartbreaking experience for my husband and me. And, as if that weren’t enough, I had complications from both of them that resulted in an extraordinary amount of medical expenses over the past six months. Specifically, with this most recent encounter, I’ve had two very unexpected surgeries in the past two weeks.

Plus, my husband was recently diagnosed with a blood clotting disorder and was prescribed a very expensive medication. I’m talking $1,300 for a 10-day supply of his prescription. I seriously don’t know what we’d do without medical insurance. But that’s a topic for another time…

Our emergency fund has saved us this month.

But medical bills aren’t the only things an emergency fund can help with. There are also car repairs (we had one of those this month, too), unexpected maintenance and repair costs for your home, and even the smaller expenses of life can keep you in debt if you don’t have a plan for them.

The Perils of Using Your Credit Card

Without a savings account, if you don’t have even a smaller, baby-sized emergency fund, you’re going to reach for the credit card every time.

Why? Because it’s easy. It’s a quick, painless fix to get you through your crisis.

But it puts you deeper in debt and you end up further from your financial goals. That dream vacation? Your kids’ college fund? That new purse you’ve had your eye on? Those all get pushed further and further away as your debt grows.

With an emergency fund, you can tap into that cash to pay for those unexpected events without sacrificing your long-term financial goals. It’s a win-win!

Getting Out of Debt by Using an Emergency Fund

Now that you see how important an emergency fund is, let’s talk about how to build it up. A good goal when you’re just starting out is to save $1,000.

That’s a significant enough amount to act as a buffer between you and life but small enough that you can save it quickly without getting discouraged.

So how do you get from zero to $1,000?

You’re going to want to talk to your family and get them on board. This needs to be an “all hands on deck” situation so you can get there fast.

A few simpler meals, skipping the morning coffee stop, and forgoing those weekly dinners out will help get you there.

You can also look for things to sell. I’m a minimalist and don’t have a lot of “extra” items hanging around, but if you’re like my husband, you’ll find there are plenty of extra, unused items lying around the house that you can sell.

Having an emergency fund is the single most important strategy to ending the cycle of debt once and for all. The faster you get to $1,000, the easier it will be. I know it’s going to take focus and some sacrifice, but I promise you it’s going to be worth it.

Do you already have an emergency fund? Share how you built it in the comments below. I’d love to hear your story!