The Psychology of Getting Out of Debt

One week ago many of you started working on your financial resolutions for 2012. Hopefully those of you with debt resolved to put together a solid plan to destroy it once and for all. There are many factors that go into the process of debt elimination but one that is often overlooked or underestimated is the psychological side.

Anyone can say they want to become debt free but it’s our emotionally-driven behaviors and attitudes that will grant us final passage into the world of financial freedom.

Math is only a very small component in the game of debt yet it’s common for us to give it more importance. It’s true that without the mathematical principle that says we should spend less than we make the rest simply won’t work but it’s also important to point out that this principle relies heavily on our actions.

You can know you need to spend less than you make but if you don’t address the root cause of your debt you will never do anything more than just tread water. Many have been caught in the cycle of debt but it’s important you realize only you have the power to get out.

How Important is Your Freedom?

One of the most important questions you should answer before starting your debt free journey is WHY DO YOU WANT TO GET OUT OF DEBT? Figuring out the answer to this question should give you a sense of urgency but only if your reasons are important enough to inspire action. It goes without saying that if your reasons for getting out of debt aren’t emotional or important to you it is very unlikely that you’ll ever be motivated enough to pull the plug on your debt.

Getting out of debt must become a priority in your life and it should be something you think about daily. As soon as you take your eye off the prize you will lose interest and eventually fall right back into your old habits and behaviors. I can give you a very good example of how this happened to me. As some of you know I had a goal to lose weight in 2011 and in the middle of February I made it a priority.

  • I started doing P90X.
  • I started counting calories.
  • I started eating healthier.
  • I started writing regularly on Enemy of Fat.
  • I started losing weight.

Then it happened.

I became complacent and the little things I was doing that were making the biggest impact slowly started to become less and less important. As this happened, I began to go right back to my old ways of eating poorly, not working out, and of course I started writing less. My priority was no longer losing weight no matter what I tried to tell myself.

The same thing will happen to you in your debt elimination plan if you lose sight of why you wanted to get out of debt in the first place. First you will make excuses as to why you must slow your roll, but ultimately they’re just excuses. It’s our way of feeling better about the failure to come. When your momentum begins to fade that is when you must STEP IT UP the most!

Your Behaviors Must Change

Our behaviors are by far one of the most challenging aspects of debt elimination. It means we have to look ourselves in the mirror and face the truth that we have not been acting in our best interests financially. The key to a successful debt free plan is your ability to be willing to change the behaviors that got you into debt.

The obvious answer is to stop spending less than you make and start saving money for emergencies but it’s the individual behaviors and habits that keep us from doing both. We say things like life is too short and convince ourselves that making better decisions will rob us of something fun and exciting.

Since becoming debt free, I’m having way more fun than I was when I was having money fights with my wife, constantly stressed out, and trying to live paycheck to paycheck. No one enjoys change especially when it comes to how we spend money. But in order for you to truly enjoy your “short life” you must be willing to sacrifice something now to receive greater rewards later.

You’ll notice that as you start changing your behaviors taking action will become much easier. Your motivation will skyrocket and as a result the things you thought you would miss out on will suddenly seem less important.

The main take away would be to NEVER stop taking action towards what’s important to you. Your actions will determine your success or failure so keep reminding yourself of why you want debt freedom so badly. My wife and I had a few rocky moments when we were paying off our debt but ultimately we never stopped wanting to feel the plush greener grass on the other side. By the way, IT FEELS GREAT! πŸ˜€

Our debt freedom has made our life so much more meaningful and freed us up to do things we used to only dream about. Don’t give up on your freedom! It is worth every effort you invest!

photo credit – karmin photography



About Brad Chaffee

19 Responses to “The Psychology of Getting Out of Debt”

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  1. P90X is awesome! Have you done the plyometrics exercise yet? I only got through 30 mins of it.

    • Brad Chaffee says:

      Oh yeah! I have a love/hate relationship with Plyometrics! The mother of all workouts! Plyometrics is definitely tough but I love it. There were certain exercises I struggled with but mostly it was just hard to keep up with the machines on the DVD. I have known people who said they puked after doing that workout. LOL

      I made it through 45 days of the program before my doc told me to stop because of a prior shoulder injury (frozen shoulder) that wasn’t ready for the intense muscle building. That’s kind of where I fell off the wagon and never really gained back the momentum I had.

      I’m trying to get my wife to start P90X with me on Wednesday to start this year off right. πŸ˜€

  2. I love this quote: “NEVER stop taking action towards what’s important to you.” Everyone needs to use that line of thinking in their everyday life.

  3. Jeffrey says:

    Complacency is always a big uphill battle. It’s simply hard to maintain excitement in our new habits and goals. The best way to conquer this in my experience is to remind myself of my goals and why I started doing it in the first place. That way I’ll motivate myself since a lot of times I’ll already have put in a lot of time and effort.

    • Brad Chaffee says:

      That’s exactly right Jeffrey. It’s exactly why New Years Resolutions and the will to complete them are gone before January has a chance to pass. On my weight loss journey I have had to remind myself countless times as to how important losing weight is to me. Now it’s time for me to continue reminding myself more frequently. Thanks for the great comment! πŸ˜€

  4. Great post, and it shows why PF bloggers will always be important. Personal finance is both “personal” and “psychological.” That means each reader’s situation is usually different and requires a tailored approach. It also means that something beyond a simple 5 Point Plan is required.

    Part of what we do is help people cultivate the fire or spark that is causing them to want to get out of debt. That’s why I enjoy this so much – it’s about so much more than simple numbers.

    • Brad Chaffee says:

      Your right John! The best plan is doomed if the motivation to see something through fades. I have certainly dealt with that myself as I think most of us have. We all have things that we knock out of the park and others that end up being the biggest obstacles.

      Bloggers rule dude! It’s why I can’t wait till #FinCon12 In Colorado. (September) You going?

      • Brad, I really wish I could go, but I’m taking the wife on a European extravaganza in June and I don’t think I’ll be able to justify the additional expense to make #FinCon12.

        Sucks because I’ve been reading your site for a while and would really like to meet you and some of the other bloggers I admire.

        Who knows, maybe I’ll find a creative way to raise the money.

        • Brad Chaffee says:

          A European extravaganza sounds pretty awesome dude! I know you and your wife will have a terrific time! I’d love to meet you too so here’s to you finding that creative way. πŸ˜€

  5. Sometimes it even takes “hitting bottom” before we have the right motivation to complete our goals. Without a strong sense of “I MUST do this…” even the most well intentioned goal will likely fall by the wayside after a while. Sadly, this happens more often than not, because so few people really want to do the work.

    • Brad Chaffee says:

      Rock bottom is definitely a prime motivator! I’ve had a couple rock bottom moments in my life and looking back it was then that I became stronger as a person. Rock bottom for health is a dangerous thing to rely on though because it likely means getting bad news from the doctor. It’s why I know I have to lose weight in 2012! I want to avoid getting that news! πŸ˜€

      Great comment Kris! Thanks! πŸ™‚

      • Brad, hitting bottom with your health is definitely something to avoid, good luck losing weight, I know it is not easy.

        • Brad Chaffee says:

          Thanks Kris. I’d like to think that since I’m only 36 that I have more time than 2012 but I do have a sense of urgency about making it happen. As you know, 1 year quickly turns into 2 years and 3 into 4. In my case it has gone on for 10 years. Not to mention the fact that people can have heart attacks or other health complications in their thirties. The longer I prolong success the faster I lose the opportunity to make it happen.

          I talked my wife into doing P90X with me. We start later today! πŸ˜€

  6. Kathy says:

    Great post….since I’ve changed my behavior towards my debt, I find myself asking whether it’s a want or a need when buying certain things.

    The past couple of times I’ve purchased clothes, I found myself hesitating because I didn’t WANT to spend the money. However, the NEED was there to buy new clothes because they were for work. So, I took my time on choosing what I would buy and really evaluating on how much wear I would get out of it. It worked for me as I ended up with about half of what I originally put in my shopping cart.

    The one thing that I’m really looking forward to when I’m debt free is seeing my emergency fund and my savings account increase each month with the money I’m now WASTING by paying off my debt. And I use the word ‘wasting’ with scorn & derision because the interest alone is most likely double what I would have paid in total if I only had used cash all of these years.

    Now THAT’S something creditors don’t want people to know! Maybe there should be a class in high school or college about debt. And credit card debt in particular…lol.

    • Brad Chaffee says:

      It sounds like you are going through some exciting new changes. Having gone through the same thing you are right now when we were paying off debt I can really relate. Once you change your attitude about debt and stop buying onto the lie that says it’s a tool for prosperity your progress and momentum will only get stronger. It sounds like that’s where you are right now! Congratulations on making it this far and good luck with the rest of your journey!

      When you refer to paying off your debt as wasting money you are right and I feel the same way about accepting debt as an alternative to saving up for the things we need or even want in life. I haven’t borrowed a dime since 2008 and I’m still able to have fun by taking special trips and can even buy myself some things I used to think I needed debt for. Our opportunities and quality of life have quadrupled and it’s far more pleasant to live life without debt clouding everything up. When you use debt and don’t pay the total bill each month you are essentially agreeing to pay more for the item than it’s worth. It’s amazing that we as a society have accepted such nonsense as normal everyday behavior.

      There definitely should be some education in high school about personal finance. I kind of doubt though that debt would be revealed for what it truly is. With so many people that think it’s a tool I think it’s more likely than not that debt would be encouraged as being a tool. It’s things like that that keep Enemy of Debt alive and kicking. πŸ˜€

      • Kathy says:

        You: With so many people that think it’s a tool I think it’s more likely than not that debt would be encouraged as being a tool.

        Me:…Yes, however, it should be ‘taught’ that it’s not a ‘tool’, it’s a ‘manacle’ which tethers you to the ball & chain that is your actual debt. Because lots of people cannot even fathom living without credit. It’s a terrible misconception that lots of people (including me) think we ‘must’ have debt to live life.

        You: It’s things like that that keep Enemy of Debt alive and kicking.

        Me: Again, yes…you totally rock. And, boy howdy am I ever so glad I happened across your blog. You’ve got great posts and insight and knowledge that you’re so amazing to share with us out here in blogland. I’ve learned sooooo much in the past year just by reading finance blogs. Even though I actually started paying down my debt about a year or so prior to starting to read online.

        My point is that even if (we) learn at an early age about debt (high school/college) doesn’t mean it’s going to stick. People (such as the idiot I used to be) will continue to ‘think for themselves without asking for help’ and get themselves into debt very easily. Therefore, Enemy of Debt NEEDS to continue because it’s a much needed blog!

  7. I enjoy the wide range of PF bloggers because you can find the particular flavor of finance that applys to your situation. Whether young or old, in debt or investing, what a variety. I love it.

    • Brad Chaffee says:

      I agree Dave, it’s a great thing to be a part of! Are you attending FinCon12 in Denver this year? It’s even better when you get to meet everyone. FinCon11 was a blast! Hope to see you there! πŸ™‚

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