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Why Do My Bills Keep Piling Up? 3 Habits That Keep You In Debt

Why Do My Bills Keep Piling Up? 3 Habits That Keep You In Debt
Screengrab from Netflix

If you watched the hit Netflix show “Squid Game,” you would know that behind the survival game premise, the series also has realistic undertones that tackle societal issues. For example, the main reason why the 456 contestants chose to participate in the Games is because many of them were in deep debt, and the Game organizers specifically chose to invite financially vulnerable people who wouldn’t be able to say no. In fact, the Game’s driving factor for the contestants to keep killing each other off is—surprise!—money. 

While there is no “Squid Game” in real life, the parallels of the plot to real people and situations are apparent: the VIPs and organizers could easily be the loan sharks that take advantage of individuals who are in extreme financial distress, leading them to get into even more debt. The desperation that drove the Game’s contestants to take a chance until the end is the situation of many individuals IRL, because sometimes, lives are on the line. 

In ”Squid Game,” the main character Seong Gi Hun is a gambling addict. In real life, there are different reasons why one may find himself in debt. 

Why we resort to utang

According to financial wealth coach and investment consultant Chriselle Soco, having trouble making ends meet is one of the main reasons why we resort to debts or utang. 

“According to a survey by the World Bank in collaboration with the Bangko Sentral ng Pilipinas (BSP), the majority of respondents identify lack of income as the main reason for running short of money for basic necessities, which oftentimes result into debts,” she shares in an interview with “Other factors as to why individuals go into debt is poor money management wherein people do not develop the habit of tracking and budgeting their income.” 

Still, others get into debt because of gambling, compulsiveness, and lack of self-control. 

“If an individual lacks financial awareness and financial education, they will keep unconsciously repeating these bad habits which might be passed down to generations. Research has shown that a person with better knowledge of financial concepts and has an abundant mindset is more likely to have money for savings and investments and less likely to borrow money or have debts,” Coach Chriselle adds. 

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How debt negatively impacts one’s life

Once a person gets into debt, it’s not only the actual lack of money that becomes the problem. In fact, this also has mental and emotional effects. An article by explains that whatever the cost and whatever the cause, “debt wreaks emotional havoc on our psyche.” 

“Some research found that worrying about debt triggers stress, which reduces your resilience against mental health problems. Behavior patterns that compel some to spend without restraint can drive a person into debt just as surely as a financial emergency caused by a car crash. Regardless of how someone falls behind, being in debt can trigger unsettling emotional responses,” says the same article. 

Coach Chriselle agrees: being financially stressed can also cause conflicts within the family, which can manifest in lack of sleep, loss of focus, and being angry and irritated most of the time. 

The different types of debt

According to Coach Chriselle, there are “good” and “bad” debts. 

A debt is considered “good” if it increases your net worth or has a future value. It’s considered “bad” debt, however, if you don’t have a stable income to pay for it. 

“An example of a good debt would be this: Let’s say a person borrows money from a friend in order to put up a business. Eventually the business would earn profit, which in return would not only help pay for the debt but also give you additional income.” 

On the other hand, “A bad debt is when you borrow money to buy a car, knowing that you don’t have a stable job/income,” she explains. 

However, there is no a specific type or amount of debt that is considered “safe,” since getting into debt in itself is a risk, whether it be for business or otherwise. 

“Most lenders and financial planners determine debt-to-income ratios which calculate how much of your total income goes to paying your debt monthly,” says Coach Chriselle. 

What’s a debt-to-income ratio? Let’s say you are earning Php 15,000 a month and you have to pay Php 3,750 to pay off your debt, then your debt-to-income ratio is 25%. According to Coach Chriselle, the higher the debt-to-income ratio, the more financial risk there is. 

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Common mistakes when paying off debts

Going back to the same, destructive habits.

If you find yourself regularly adding to cart things you don’t need, or spend money impulsively, this can greatly affect your finances. “It’s always the small, little habits that have the biggest impact,” says Coach Chriselle. 

Not creating a practical budget.

According to Coach Chriselle, having control over your finances highly relies on budgeting. However, it is also important to keep your budget realistic. 

Remember to develop a realistic budget that would address all of your financial needs such as basic necessities, housing, food, health care, insurance, education, and of course, your debt,” she says. 

If possible, allot money for your emergency fund too! 

Paying multiple debts at once.

“Spend your money only on essentials, and allot a specific amount of money to go directly to the highest debt. When it’s paid off, go [on to] the next biggest debt until all debts are paid off and eliminated,” explains Coach Chriselle. 

You should always go back to your budget. If paying multiple debts at once would make you go over your budget plan, pay them off one at a time—and refrain from getting into another. 

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How to pay off your debts

Once we have addressed why we got into debt in the first place, we can start following an appropriate payoff plan with the help of these tips from Coach Chriselle! 

Be consistent.

“Set a goal and be committed to it,” says Coach Chriselle. Paying off our debts requires discipline, willingness, and consistency. 

Make a list.

It may be terrifying to see how much you need to pay, but this helps you organize the realistic payoff plan that you have to follow. 

“Make a list of all your current debts, [and] arrange them from the highest to the lowest debt,” she says. Focus, and be patient. 

Learn how to say no.

Discipline is a crucial part of paying off debts, and learning to say “no” to impulsive buys, budols, and other unnecessary spending is part of the exercise! 

Increase your financial knowledge and awareness.

“Learn how to expand your financial awareness and you might discover the beliefs you have about money and how they negatively impact your life,” Coach Chriselle explains. 

At the end of the day, it is important for us to go back to the root of the problem. Handling our finances wisely, spending below our means, and planning ahead could help us live rewarding, debt-free lives. It all begins with a healthy perspective on money.  

To get Coach Chriselle Soco’s expert advice, contact FWP on Facebook or Instagram.

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