Debt: How To End Your Relationship
Money Women

End Your Comfortable Relationship With Debt

Stop trying to rationalize and justify your debt burden

In many cases, the biggest determiner of whether or not you achieve financial independence lies between your ears. One major obstacle to achieving financial independence has to do with your relationship with debt. The more comfortable you are with it, the more difficult your journey is likely to be.

I had a new client come into the office this week and the first words out of her mouth were, “I know you’re going to say that I need to save more, but I don’t have any money to save so what else can you do for me?”

“Well,” I said, “Let’s see.” As I started to review her income and expenses, I noticed a familiar pattern. Of course, she didn’t have any more money to save she was spending almost $2,000 a month on credit card bills. That amount of debt (keep in mind she was only making minimum payments on her credit cards so the overwhelming majority of that was interest or money down the drain) would be challenging to almost anyone. So I developed a chart showing $2,000 a month going into an investment earning a conservative 8% over the next 15 years which just happened to match with her projected retirement date. I wrote the ending total on a piece of paper and slid it over to her.

Her eyes got really big and she said, “I want that.”

But as we continued our discussion, I had to wonder if she wanted it enough to change her relationship with debt. The more we talked about her credit card purchases (all non-essentials), the more I realized that she was really comfortable with the whole idea of debt because she could rationalize and defend almost every purchase. She used terms like leveraging, once-in-a-lifetime sale, and even doing her part to help the economy. While these may be valid reasons for buying things, they are not reasons to go into debt for non-necessities.

While the national savings rate for Americans has been hovering around zero for the past few years, the level of debt has been steadily increasing. Sure some of this is due to economic or other conditions beyond our control, but much of it is due to our comfort level with debt. Over time it has gotten easier and easier to get into debt and many people have slid into an unconscious pattern of constantly charging, and the small monthly minimum payments we are required to make is perceived as an added benefit because it gives us the illusion we are in control when in fact, we have very little.

Financial independence, on the other hand, which for most of us entails being debt free, gives you real control. But it comes at a price. And the first thing on the chopping block is ditching your comfortable relationship with debt!

P.S. The total amount on the piece of paper was $680,000 and that was in addition to her current 401(k) savings.

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Patricia Stallworth, CFP® and CDFA, is the president of PS Worth, a financial education company, the author of Minding Your Money, and the host of the Minding Your Money Minute™. Learn more by visiting