The Habits That Get People Into Debt (Without Them Noticing)
- Team at LSH
- Jan 11
- 2 min read
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Happy New Year! It's been a busy couple of months, now back to it.
Most people don’t wake up and choose debts. They repeat small habits that make debt inevitable. If you want a strong 2026 financial year, start by spotting these early.
1️⃣ Paying Yourself Last
Most people think of savings last. Whatever is left gets saved. Which usually means… nothing is left. This habit guarantees dependence on credit and debt when life happens.
Replace with: Habit of Pay Yourself First — even a small automatic amount.
2️⃣ Financing Convenience
“0% interest.”
“Buy now, pay later.”
“Just $39/month.”
Monthly thinking hides the real cost and trains your brain to normalize debt. Not all debt is bad or destructive. Debt for consumption normally hinders your financial progress towards your goals. A monthly amount fits how much you have and makes the payment easier. But the convenience generally means you probably pay more for the same product.
Replace with: Habit of Paying in Full or Habit of Waiting.
3️⃣ Avoiding the Numbers
Not checking balances. Not listing debts. Not opening statements. Avoidance doesn’t reduce stress — it compounds it.
Replace with: Habit of Planning e.g., one monthly money check-in. Calm. Boring. Honest.
4️⃣ Lifestyle Creep without Intention
Income rises. Spending rises faster. Savings stay flat. This is how high earners stay broke. When Parkinson's Law or observation (“Work expands to fill the time available for its completion”, highlighted for example at the Learning Loop) is applied to personal finance:
Expenses expand to meet income — and often exceed it — unless actively constrained.
As Karen Banes at the Wealth Tender put it, "We have a natural tendency to spend the entire amount (and often, in a world of easy credit options, somewhat more) each month".
As income rises:
Spending feels justified
New “needs” appear
Lifestyle quietly inflates
Savings don’t automatically increase
This is why:
High earners can still live paycheck to paycheck
Raises don’t create wealth by default
Financial progress stalls without intentional limits
Replace with: Lock in a lifestyle as the income increases. Let the raise fund freedom, not pressure.
5️⃣ No Cash Buffer
Every surprise becomes an emergency. Every emergency becomes a credit card swipe. Debt fills the gap where cash should live.
Replace with: Habit of saving. Habit of protection e.g., A small cushion that grows over time. First from $1,000 to 6 months of expenses.
Debt isn’t a moral failure. It’s often a habit problem. Again, not all debt is bad or destructive.
Change the habits → the numbers follow. As you become aware of what got you into the debts, you can make habitual changes that lead to more peace, stress less, and more available to you.
To your success.
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