Skip to main content

How Do You Justify Your Debt?

8 minute read

David Ning

By David Ning

Most of us are well aware how debt works. We know we shouldn’t buy things that we can’t afford. Instead, we know we’re supposed to save up for major purchases. It’s just smart financial sense to not make a bunch of purchases that drive up your debt. However, when it all comes right down to it, too many of us are happy to rationalize adding those debts to our legers. It’s quite easy to fall into some of the common traps that many of us use to justify racking up more debt. After all, we’ve probably all had these thoughts before. Thoughts like this…

“I Really NEED This!”

The line between “want” and “need” can often be blurry. There have definitely been times I pulled out the ol’ credit card to buy a “want” that I was certain was really a “need.” Unfortunately, it’s all too easy to classify something that is truly optional as a must-have. It’s only in hindsight that you might start to experience buyer’s remorse.

When I first started working, I often thought I had no choice but to use my credit cards. Whenever there was a pay period (or two) where I spent more than I was earning, I mistakenly thought that I was already living the frugal life. I justified my spending by thinking it was actually my job that wasn’t cutting it.

I Could’ve Cut Back Easily

Looking back, though, I realize there are areas I should have trimmed. I had cable TV and a cellphone plan with a major carrier. I also went out to eat and spent plenty of money on entertainment. To be honest, though, I certainly didn’t need any of that. Not if push truly came to shove. None of that was really necessary at all. But I had convinced myself that it all was.

I still remember one time when I thought I needed to use my credit card to pay for groceries. I had contributed too much money in my 401(k) that month, and stupidly left myself without enough cash flow to pay for basic necessities. However, if I had cut the cable or used a discount cell phone provider, I would have had plenty of extra money every month.

“I’m Getting Paid Soon.”

Another common justification for debt is that you’ll be able to repay it quickly. After all, your paycheck comes on Friday, right? Or you’re expecting a bonus from work. Or some other hoped-for payment. Sure, using your credit card as part of a budget plan can be a smart financial move. However, it really only works if you have the money on-hand to always pay it off. Using your card as a stop-gap until payday really isn’t the same thing.

Many people satisfy their impulse for instant gratification by telling themselves they’ll quickly pay off the card once they have the money. After all, they are gainfully employed. The paychecks keep coming in regularly. The reality, though, is that it’s difficult to keep track of how much money you’re actually spending with this manner. If you continue to pre-spend your paycheck, you’re only one unexpected expense away from being in a pile of debt that you can no longer erase when your paycheck arrives.


“It’s GOOD Debt!”

Just because something is considered “good” debt, doesn’t mean you should agree to more of it. Yes, it might make sense to borrow for an education. But do you really need to go to the most expensive school? Or need to take out additional student loans to cover living expenses, when you could be working part time instead?

Many people also use this rationale when they buy a house. Since a mortgage is considered “good debt,” they assume that a bigger mortgage is perfectly acceptable. However, stretching your finances to afford a mortgage that is bigger than you actually need is rarely a good idea. Even if the real estate never loses value, you’re life will be a constant struggle to meet those hefty payments. Before you convince yourself that it’s okay to go a little overboard with good debt, remind yourself that it’s still debt.

Debt is Debt is Debt

A mountain of debt can ruin your money dreams — no matter how you justify or classify the obligation. You may not realize it, but you’re just making excuses that holds you back. Yes, it’s true that some kinds of debt are better to have than others. At the end of the day, though, it’s all still money that you have to pay back. Don’t lose sight of that face.

Having debt doesn’t just affect your finances either. It can also impact other areas of your life. Getting out of debt, especially consumer debt, is important if you want true financial freedom. Otherwise, debt will keep holding you back.

Debt is a Resource Drain

Once you’re saddled with debt payments, you can no longer use that money for other things. Rather than using your hard-earning money to invest, grow, or save up for the next big financial goal, you just have to part with it to service your debt. You could miss out on a great investment opportunity simply because your debt doesn’t allow you any extra to speculate with. At the very least, you’re probably robbing your future self by not contributing enough to your retirement.

Before you get into debt for something, it’s a good idea to consider whether or not you really want it. Putting that purchase on your credit card might make you happy for a short while. However, will you still be paying for that item long after you’ve grown bored of it? What else could your money be doing for you instead?

That’s Not All

What’s worst, you will become over-leveraged at some point if you continue this behavior. You might want (or even need) to buy something else, but you won’t be able to because you have a debt payment to make. As long as you have debt, your money is obligated elsewhere and it isn’t yours to do with as you please.

Don’t forget that those payments include interest. That extra charge goes right into someone else’s pocket. It provides you with absolutely no benefit beyond the “privilege” of borrowing.

Lost Opportunity

The fact that your money is tied up in making debt payments isn’t the only way that you can’t use your money as you would like. There are a number of opportunities out there that allow you to use your money to make money. Or you could be saving that money up instead of paying your debt. Both things could lead to an earlier retirement.

Paying interest on a large amount of consumer debt is holding you back. It’s basically ensuring that you won’t have the flexibility you need to take advantage of opportunities that come your way. Lost opportunity is a very real financial issue. Get your finances in order and pay down your debt. You will be ready to take advantage of opportunities as they come along.

I Almost Lost the Opportunity of a Lifetime

When I decided to jump into my web business, I took the leap knowing that I would lose two-thirds of my income. Luckily, my expenses were low at the time. That gave me the confidence to give entrepreneurship a go. Fast forward 15 years (or so), that same business affords my family a comfortable living while letting me do something I enjoy.

My good fortune almost didn’t materialize though. A year prior to quitting my job to focus on my website, my wife and I almost bought a home. We were looking at a new construction build, signed up to be on the waiting list, and even went to a meeting with the builder where we were offered to put a deposit down. I’m not even sure why we decided to give up on our home buying dream — in the middle of this meeting. I guess something just didn’t add up for us. However, that one decision literally changed our lives.

If we bought that house, it would have come with a decently sized mortgage. I would have never quit my full-time job in favor of jumping into running a business on my own. It would have just been to risky, if the website didn’t work out the way I wanted. It wouldn’t even matter that the mortgage we almost signed for would be considered “good debt.” The lost opportunity would affect me, all the same.


Emotional Well Being

Another problem with debt is that it affects you emotionally. The stress of having debt can weigh on your mind. That stress feeds on itself to cause even more stress. Indeed, financial trouble is a major cause of stress in many people’s lives. When you’re constantly worried about paying bills and meeting obligations, the stress can be a real problem.

On top of that, your emotional wellbeing can have an impact on your relationships and even on your physical health. You are more irritable when you are stressed about money. That can lead to strains on your relationships with family and friends. How many marriages are stressed (or come to an end) because of money problems? How many parents snap at their children because they are anxious about how much money they owe? Being in debt isn’t just a red number in some spreadsheet — it can have a huge impact on your mental health too.

Stress Is Unhealthy

Don’t forget that anxiety and stress can cause heart problems and lead to other physical ailments. The effects might not be immediate, but the stress to our body is like rain drops that keeps chipping away at rocks. Eventually, even the strongest rock will erode and fall apart.

Make a plan to pay down your debt. Resolve to get a start on debt reduction. You’ll feel better almost immediately, just knowing you have a plan. Once you start to see those outstanding balances do down, you’ll feel even better.

The Bottom Line

Did you notice that I never tried to justify taking on any debt in this article? Not even a “good debt” — like a mortgage — is all that beneficial if your income can’t actually support it. At the end of the day, debt can severely hold you back — no matter what the reason you originally needed the funds is.

It doesn’t matter whether you took on a bigger mortgage to buy a larger house because your family is growing or you just wanted to splurge on a fancy sports care. Either way, you’ll have to make payments on those debts for quite a while. Those payments will certainly have an impact on your overall finances.

There are some more responsible ways to use debt, sure. And yes, a mortgage is still a mathematical win in almost every situation. However, don’t make the mistake of justifying your debt with non-logical thoughts. No, you don’t need that new iPhone when your old still works fine. No, you don’t need to keep up with your neighbors, who both drive brand new luxury SUVs. Going into debt for these needless reasons will only hold you back.

David Ning

Experienced Finance Writer

David is a published author, entrepreneur and a proud dad. He firmly believes that anyone can build a solid financial foundation as long as they are willing to learn. He runs, where he discusses every day money issues to encourage the masses to think about their finances more often.


How Much You Should Spend on an Engagement Ring and What To Look For Wedding Ring Around Rolled Up $100 Dollar Bill Financial Advice

How Much You Should Spend on an Engagement Ring and What To Look For

Spending three months’ worth of salary might be the rule of thumb, but is it necessary? That depends on a variety of factors, including your financial situation and your partner’s style. When it’s time to buy a ring, keep the 4Cs in mind: Cut, Color, Clarity, and Carats. Engagement rings can be marked up 600% […]

Read More about How Much You Should Spend on an Engagement Ring and What To Look For

8 minute read

Is Pinching Pennies The Ultimate Secret To Wealth? Financial Advice

Is Pinching Pennies The Ultimate Secret To Wealth?

I’ve always identified myself as a penny pincher. However, I wouldn’t necessarily say I’m proud of that label. Then again, I’ve never fully shied away from it either. After all, I credit my willingness to scrap and save for giving me courage to jump into the unknown of entrepreneurship when I started, all those years […]

Read More about Is Pinching Pennies The Ultimate Secret To Wealth?

8 minute read

Widow’s Pension: Everything You Need to Know Financial Advice

Widow’s Pension: Everything You Need to Know

Qualifying military members can set up a Survivor’s Benefit Plan (SBP) upon retirement. The SBP, along with standard Social Security, can be used by a widow to stay financially afloat. Both the deceased veteran and the surviving spouse must meet certain conditions to qualify for a SPB. The payment amount depends on a number of […]

Read More about Widow’s Pension: Everything You Need to Know

6 minute read

Reducing Debt: Is Your Debt Like a Yo-Yo Diet? Financial Advice

Reducing Debt: Is Your Debt Like a Yo-Yo Diet?

You’ve probably heard the term “yo-yo dieting” before. It’s the problem that many people face when they attempt to lose weight. They will make drastic, unsustainable changes to their exercise and diet plans. The weight drops off, they relax their diet and start skipping gym days, and the weight comes roaring back. Rinse, repeat, ad […]

Read More about Reducing Debt: Is Your Debt Like a Yo-Yo Diet?

9 minute read

Is Thanksgiving Being Taken Over by Consumerism? Financial Advice

Is Thanksgiving Being Taken Over by Consumerism?

One of my favorite holidays is Thanksgiving. It’s one of the simplest of holidays. You can celebrate it without a lot of fuss — and without the need for elaborate décor or expensive presents. Thanksgiving has long been considered a holiday mostly untouched by consumerism. After all, what is less consumer-based than gathering with family […]

Read More about Is Thanksgiving Being Taken Over by Consumerism?

7 minute read

Do You Truly Understand The Impact Of Your Financial Decisions? Financial Advice

Do You Truly Understand The Impact Of Your Financial Decisions?

Too often, we think of our financial decisions as being made in a vacuum. For example, we figure that the investment choices we make only affect us in terms of gains or losses. Or the decision to fund a 529 education account only means your child will have a better chance of making it through […]

Read More about Do You Truly Understand The Impact Of Your Financial Decisions?

7 minute read

Simple (But Not Easy) Tips for Financial Success Financial Advice

Simple (But Not Easy) Tips for Financial Success

Whether it’s through a blunt comment online, a gentle reminder in person, or just by the look on their face, people tell me the same thing all the time. “David,” they say, ” I already know everything you’re saying to me right now. I want to be financially free. I don’t need someone to rehash […]

Read More about Simple (But Not Easy) Tips for Financial Success

6 minute read

See all in Financial Advice