The Shocking Truth About Debt: It’s Not a Financial Problem

Personal Credit

Are you tired of having credit card bills? Do you wish you could get out of debt once and for all?

If you want get out of debt permanently, first consider this: Debt is not a financial problem. Hard to believe, but true.

Debt is actually a personal problem that masquerades in financial clothing. That is why so many people have persistent problems with debt. They look outward for financial solutions, when the true solution is found by looking inward.

Planning a Permanent Debt Solution

Defining your debt problem correctly is critical to solving it.

That is where most debtors run into trouble. They mistakenly define debt as a financial problem and develop financial solutions. That is why their debt returns shortly after paying it off. They fail to identify the root cause of debt, opening the door to repeating the vicious cycle.


For a debt solution to be effective your plan of attack needs to be based on principles that actually work. Unfortunately, when you just pay off your balances you relieve the pain, but the underlying condition that put you in debt in the first place still lurks under the surface, ready to return.

Let’s face it, the real causes of overspending are your personal habits and attitudes. In other words, the true solution is personal — not financial. That is a key, and understanding this principle is what will make or break your success in slaying the debt monster for good.

Masking The Problem

When you get a headache what is the logical response? You reach to the medicine cabinet for immediate pain relief. Unfortunately, the various pills do nothing to cure the underlying disease: they merely treat the symptom. The cause could be excessive stress, brain cancer, dehydration, eye strain, or any number of other issues. By taking a pill you’ve treated the symptom — not the underlying cause.

The same is true with debt. Everyone knows they need to make more and spend less to solve their debt problems. So they pursue financially driven solutions to relieve financial symptoms. It seems logical on the surface.

Whether you choose to consolidate your credit card debt to lower interest rates or you choose any of the quick-payoff strategies (inheritance, gift, sell an asset, bankruptcy, home equity line of credit, or refinancing), the reality is you are treating the symptom and not creating a lasting cure.

Your financial problems are merely the accumulated reflection of the many small financial mistakes you are making on a daily basis — often without knowing any better. That’s why teaching a debtor to spend less and earn more is like telling someone to lose weight by eating less and exercising more. Everyone already knows that is the answer. The difficult part is not knowing what to do, but actually getting it done. The solution lies in your daily habits and attitudes.

[Related Article: 3 People Who Dug Out of Deep Debt]

Money Breakthroughs

I first discovered this approach to debt recovery in my work as a money coach. I started out making the same mistakes as everyone else. I thought debt problems were financial, so I coached my clients to financial solutions. The lackluster results proved it was the wrong approach.

The breakthrough came when I noticed my wealthy clients had mirror opposite attitudes and behaviors compared to my get-out-of-debt clients. For example:

My wealthy clients viewed their financial situation from a position of self-responsibility, whereas my debt clients were victims of their finances.My wealthy clients planned their finances, but my debt clients had no plan.My wealthy clients organized their plans around delayed gratification, whereas my debt clients pursued instant gratification.My wealthy clients associated their self-worth with intrinsic values, while my debt clients associated self-worth with extrinsic stuff.

These are just 4 examples from a long list of opposing traits. They are guidelines or tendencies that generally hold true. While there may be personal variation, on the whole the patterns were unmistakable. These mirror opposite attitudes produced mirror opposite financial results in life.

[Related Article: 7 Ways to Avoid a Debt Relapse]

Amazingly,when I applied these principles, coaching habitudes instead of specific financial actions, the debt problems solved themselves over time.

This is obvious when you think about it. Your daily financial decisions result from your habits and attitudes that drive those decisions. For example, consider the following choices and their obvious financial implications:

Do you buy fancy coffees throughout the day or do you make a pot of your favorite coffee in the morning and bring it with you?Do you lease a new car every few years or maintain your reliable used car?Do you dine out frequently or cook healthy meals at home?Are you a minimalist or do you desire the latest designer fashions?Do you shop to get what you need or do you shop for pleasure and recreation?

When you focus on financial solutions, you treat the symptom instead of the cause. When you focus on your attitudes and habits, you focus on the cause, and the symptom takes care of itself automatically without any self-discipline.

Let me be clear — this isn’t a quick fix. The results you produce from this approach will occur gradually over time. Just as it took time to accumulate the debt, it takes time to unwind it when you work with root causes.

However, the solutions are as permanent as the new attitudes and habits you adopt — and that makes all the difference.

The truth is the financial results of your life aren’t dependent upon how much money you make. Instead, they depend on how well you manage the money you already have. This article series will show you the easiest way to adopt wealthy habits and attitudes and be smarter with your money so that you can get out of debt — permanently.

[Related Article: 5 Ways to Get Out of Debt: Which Will Work for You?]

Todd Tresidder is a financial coach and consumer advocate. His unconventional take on worn financial topics has appeared in the Wall Street Journal, Investor’s Business Daily, Smart Money magazine, Yahoo Finance, and more. He’s authored 5 financial education books including How Much Money Do I Need To Retire?, Variable Annuity Pros and Cons, and the 4% Rule and Safe Withdrawal Rates In Retirement.