3 Reasons You Can't Get Out of Debt

Shedding debt isn't easy -- here's why you may be struggling.

Credit cards may lend themselves to convenience, but they often lead to debt -- and the unhealthy kind at that. Too much credit card debt can not only cost you money, it can also damage your credit score, thereby trapping you in a cycle where it becomes increasingly expensive to borrow money if you need to.

If you can't remember the last time you didn't have a nagging credit card balance hanging over your head, then it could be that your approach to managing your money needs a serious overhaul. Here are a few reasons why you might be trapped in a debt cycle -- and what to do about them. 

1. You're not following a budget

To pay off existing debt, you need money. But if you have no idea what your bills look like month after month, or where your paycheck actually goes, then you're likely to have a hard time shedding the debt you've accrued.

The solution? Set up a budget to follow. That way, you'll see what each of your individual expenses costs you on a recurring basis, and you'll also have an easier time identifying areas where you can cut back. For example, you might think you only spend $100 a month on leisure, only to realize that figure is closer to $300 when you create a budget. That knowledge will enable you to cut back in that area and free up cash for debt payoff purposes. 

2. You don't have emergency savings

Not having savings is a big reason why many people land in debt in the first place. And if you don't make an effort to build an emergency fund, you're likely to have a hard time reaching debt-free status. That's because without money in the bank, you'll generally have no choice but to rack up -- wait for it -- additional debt when unplanned bills pop up. 

A better bet? Cut back on spending to build some cash reserves. Ideally, you should have at least three months of essential living expenses tucked away in a savings account so you can access that money in a pinch. At the same time, if your debt level is high and your savings are virtually non-existent, consider getting a second job. Having money in the bank, will help you avoid a scenario where you come really close to paying off your credit cards, only to have to add to your balance. 

3. You're not tackling that debt efficiently

Paying off debt is by no means an easy thing to do. But you can make it easier by taking a more efficient approach. That generally means paying off the credit card with the highest interest rate first, and then moving on to the balance with the next highest interest rate, and so forth. 

Another option? Transfer your various balances onto a single credit card with a lower interest rate. That way, your debt will be easier to manage and less expensive. Some balance transfer cards even offer a 0% introductory interest rate. If you can capitalize on that type of offer, it may offer you some solid savings on the amount you owe. 

Being trapped in a seemingly endless cycle of debt is no fun. If you've been unable to shake your debt, see if any of the above factors are to blame, and then take steps to overcome them. Doing so could be your ticket to becoming debt free and improving your financial picture as a whole.