Debt can be a vicious cycle. We start the debt cycle by finding a way to JUSTIFY adding on new debt.
Ways we JUSTIFY Adding on New Debt-
1 To rectify our past mistakes.
(Example: You got in a fender bender by not paying attention and you need to fix your bumper.)
2 To reward ourselves.
(Example: You’ve lost weight so you deserve to buy a new outfit.)
3 To get rid of the old debt.
(Example: Taking out a second mortgage to pay off credit cards.)
As soon as we JUSTIFY it, we take on new debt. This causes more stress and more financial consequences. For relief, we JUSTIFY adding on more debt. The more we do it, the more problems result and the more we seek relief from the problems.
When we catch ourselves explaining, rationalizing, defending, or making excuses why we need to add new debt, we’re caught in the debt cycle.