12 Common Financial Burdens Difficult to Escape

Money controls every aspect of our lives. It helps us gain education, pursue our goals, and feel secure about the future. On the flip side, money problems cause immense stress and often trap us in vicious cycles of debt repayment and the paycheck-to-paycheck struggle. 

Although many financial struggles, like stagnant wages and rising living costs, aren’t our fault, bad money decisions can wreak havoc on an already unstable life. 

You should think twice before digging into an inescapable hole with these money pits. 

Credit Card Debt

figure of a man carrying bag of debt on his bag in the center of a maze
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Approximately 56% of credit card holders carry over their debt from month to month, while America’s collective credit card debt balance soared past 1 trillion dollars. 

Credit cards allow consumers to buy now and pay later as long as they pay a hefty fee in interest. Once you dig yourself into the hole, it’s harder and harder to dig out, as the interest charges often exceed the minimum payment amounts. 

Payday Loans

A man reading a debt collection letter.
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Payday loans are even worse than credit cards, putting people into endless cycles of high-interest-rate loans they can never repay.

Payday loans, which can charge up to 400% interest, often target communities lacking financial education and other banking options. When an emergency strikes, people are forced to accept the outrageous terms. It’s nearly impossible to escape once they get caught in the cycle. 

Flashy New Cars

Line up of brightly colored vintage cars that only show the very front of the cars.
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While most people need a reliable car, most don’t need an expensive sports car. Many young people starting their careers fall for marketing, telling them they need all the bells and whistles of a new vehicle, and end up with hefty car payments that stretch their budgets far too thin. 

Stick with an unassuming sedan, which typically gets better gas mileage and is built to last. 

Lifestyle Inflation

A woman browsing through the racks at a clothing store.
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Scoring a promotion with a fat raise is a feat worthy of celebration. But too many people raise their standard of living before considering their overall financial security. 

Before spending all your new money on a bigger house and a flashier car, ensure you have your basics covered. Build an emergency savings fund, max out your 401K, and dig out of debt. You don’t need to maintain the consumeristic trap. 

Putting off Retirement Savings

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Retirement seems so far away that it’s easy to ignore. But one day, you’ll see it on the horizon, and before you know it, you’ll be 65, thinking about quitting your job for good. 

Those who neglected their retirement savings for most of their lives are in for a rude awakening when they discover they’ll never be able to live their golden years in peace. 

The Wrong House

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Homeownership stands proud as a symbol of the American dream, but many people make massive mistakes when buying the most expensive item of their lives. 

Some fall for the perks, like a hot tub, walk-in closet, or heated floors. Others buy more house than they can afford, and a few even get caught up in FOMO and purchase a home without getting an inspection. 

The wrong home can cost thousands of dollars over time. 

Ignoring Taxes

Block letters "t" "a" and "x" standing atop small piles of coins that get progressively bigger to spell out "tax."
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I have a friend who decided not to file taxes for five years, hoping everything would work out. It did not. He owed the IRS thousands of dollars, which he eventually set up a payment plan to repay. 

If you don’t pay your taxes, you could face penalties of up to 25% or even criminal charges. 


An annoyed woman looks through papers while working.
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America runs on the ingenuity of small business owners, but far too many people have an entrepreneurial spirit without the foresight. 

Starting your own business is a wonderful idea, but only if you plan ahead and understand all the work and risks involved. Starting a business without a plan is a recipe for a costly failure. 

Bad Health

obese man on a chair with fast food in his lap
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The United State’s healthcare system punishes poor health to an outrageous degree. Although there’s nothing you can do about chronic genetic conditions, far too many people fall into bad health over poor health lifestyle choices. 

Eating a balanced meal, getting exercise, and seeing a doctor regularly can all reduce the odds of developing a chronic condition as you age. Refusing to make healthy choices now will create a future money pit. 

Attending your “Dream School”

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Many kids get caught up in the idea of a “dream school,” thinking that if they attend that specific university, their entire lives will fall into place. Unless your dream school is Ivy League, it’s not worth the extra cost. 

Outside of a few prestigious organizations, which you’re unlikely to get into anyone unless you know somebody, nobody cares which school you went to. Don’t burden yourself with extra debt for a fancier piece of paper. 

Marrying Wrong

Black and white photo depicting a bride and groom at the altar but neither looks happy.
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Our choice of life partner has long-lasting implications on our entire lives, especially our finances. Marrying someone with conflicting financial goals can cause years of heartache and strife, but divorce is the most challenging financial pit to recover from. 

Nearly 50% of all marriages end in divorce, and most people leave a marriage worse off financially. It’s especially damaging for women, whose wealth falls 43% after marriage, compared with 20% for men. 

It’s difficult to recover from such a massive loss of wealth. 

Having Kids Too Soon

An overwhelmed mom sits on her couch working on a laptop with her young son sitting next to her.
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The United States claims to love families but does nothing to support struggling parents. Having kids before you’re financially stable can impact your future wellness. 

It costs over $300000 to raise a child from infancy to 18 – a figure that doesn’t include a college education. Those who aren’t prepared to pay for formula, daycare, sports, clothing, and all the other incidentals that arise from parenthood may have to forego retirement savings or rely on credit to fill in the gaps. 

Avoiding Financial Pitfalls

A happy couple sits in their new home and counts money.
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The commonality in all these pitfalls is that they’re so intertwined with our everyday lives that they’re sometimes tricky to spot. Most of us strive for marriage, a home, kids, a car, a college education, and owning our own business. 

They only become money pits when we make impulsive decisions based on emotion rather than well-thought-out decisions based on planning and research. 

Making a financial plan that includes your life plan will prevent the happiest moments of your life from turning into money pits.