Acknowledge You Have a Problem with Debt


This is part one of my Getting Out of Debt: The Essentials series.

There is a reason why nearly every "recovery" program, despite the underlying issue, has the exact same first step.  The wording may vary slightly, but the underlying message is consistent: acknowledge the problem.

Not just in theory.  Not because you read it in some book or blog.  Ultimately, it's going to have to come from within yourself.  You're going to need to examine your own life, your own experiences, and your own beliefs.

You've got to be able to stare directly into the mirror and really acknowledge the problem.  I know from experience that this simple act will radically improve your chances for success.

If you are like me, you'll be able to remember the exact point in time it happened.  Sadly, I didn't use to feel debt was really that big of a deal.  I had been a long-time subscriber to the "you'll always have a car payment" mentality.  Like many, I opted to ignore any calculations of the true cost of my purchases.  If I was immediately able to handle the monthly payment, that meant I could afford it.  I was convinced that debt was a fact of life and that "personal finance" just meant being able to pay all the bills on time.

Then it happened.  The birth of my daughter shifted the view of my financial situation overnight.  The world stopped revolving around me and started revolving around her.  I realized that I while I was willing to carry around the burden that came with my debt, I wasn't willing to saddle my daughter with it.  It was at that point, I really acknowledged that my debt was a problem.

Obviously, your specific situation is going to be different.  Maybe you've already had the "man in the mirror" moment.  Or maybe you'll be able to step up to the plate without needing a life-changing event to push you.

Regardless of different situations, all debt shares one commonality: 

Debt limits freedom

Actually, debt thrives on limiting our freedoms.  And the more freedom we yield, the more dependency we build.  It's a nasty downward spiral for most of us.

The spiral can start for all sorts of reasons:

  • Some have unforeseen emergencies, such as medical expenses that come out of nowhere.
  • Others have a drug, alcohol, gambling, or even spending addiction.
  • Many of us simply lived outside of our means, slowly letting debt creep into our lives.

It's essential that once we admit the problem that we are able to honestly reflect on how it came to be.  We might need to expand our insurance coverage, seek out help for an addiction, or finally commit to spending less than we earn.  We are going to have to stop the bleeding if we are ever going to be able to heal the wound.

But the details on how we are going to heal the wound can wait for later.  Before we can plan for and execute the specific details, we have to build a mental foundation to weather the coming storm.

Before I really acknowledged the burden generated by my debt, all the fancy budgeting techniques, debt-reduction methods, and automation software in the world didn't matter.  I wasn't ready.  Once the switch flipped though, I felt invincible.  I had passion, conviction, and resolve.  I literally declared war on my debt and began to crave the inevitable freedom that would come from destroying it!

The next step in the journey was realizing that debt-free living was not only desirable, but attainable.  We'll get more into that process in the next segment of the series!

Until then, here are some additional resources on the current topic:

What about you?  Have you already had the "man in the mirror" moment?  Why not?  What did it look like?  How did it feel?  Join in on the conversation by adding you experience and perspective below!


Getting Out of Debt: The Essentials

Over each of the next couple of weeks, an additional segment of the series will be released.  The links below will be updated as each new articles goes live:

  1. Acknowledge You Have a Problem with Debt
  2. Debt-Free Living IS Attainable.  If You Want It, You Can Have It.
  3. Get a Grip on Your Debt:  Obtain a Clear, Concise Financial Snapshot
  4. Dissect the Source:  Understanding Your Income and Spending Habits
  5. Plan to Win:  Debt Reduction Methods and Emergency Funds
  6. Aggressively Attack Your Debt
  7. The Art of Maintaining Motivation while Overcoming Debt

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Guest's picture

I very recently confronted my *actual* debt situation. And it was painful. So painful, I had to do it in stages. Tally-ing up *all* of the credit card debt was the first part. Then, a month after adjusting to the reality of my credit card debt, I confronted the student loan debt. It is now all in a spreadsheet titled, "The Big Picture" and includes the good parts (my growing savings account!) and the bad parts (my debt). But at least I know where I stand. Now I'm figuring out how to turn things around. For me, knowing is better, even though it was startling to admit to myself just how irresponsible my spending has been. Now, I'm more in control and have the beginnings of a plan.

I look forward to reading this series as I tackle my own debt issues.

Guest's picture

Well done Adam! I shared a similar experience when my first daughter was born!

Thankfully I my family and I have been very diligent in our efforts to pay off our debt and we are now debt free (except for the mortgage).

Following a few simple debt reduction techniques we were able to pay off over $90,000 of consumer debt!

It wasn't easy, but believe me! It was one of the best things that my family and I ever did!

Good luck to you and yours and you are absolutely right! Admit that you have a debt problem is a bold first step!

Guest's picture

Like anything else. Once you can admit to yourself you have an issue, you will be able to begin fixing it, especially with debt.

Guest's picture

Thank you so much. I am only solvent in DA 58 days today after many relapses,excuses. It is hard. I have to cut up my remaining card. I am afraid. Today - I am not using it.

Guest's picture

Spot-on, Adam. In a nutshell: When in a hole, the first thing to do is to stop digging (and with credit card interest rates, the hole will keep digging itself to a lesser degree unless you're careful). If your hole is into five digits, it might be worth your while to try to negotiate your principal down with your credit card company, if that's where most of your debt is. Credit card debt settlement can help prevent a Chapter Seven filing. It helped my folks.

Guest's picture

I love that you "declared war" on your debt. I believe that if more people truly believed that debt is a relentless task master that needs to be fought against, then our nation would be in much better shape. Unfortunately, we as consumers prefer to lie to ourselves and figure "it will all work out in the wash." I'm excited to see your future posts in your Debt Series.

Guest's picture

I was reading a post on problem halved iphone app about a guy who had lost over 350 000 dollars to gambling.

Spending too much in other areas is like gambling. The problem halved app is full of people with financial problems.

Its a good community to ask advice in

Guest's picture

I lost around 50 000 to gambling. It is an illness and not that easy to cure.

Whats this problem halved app?

Guest's picture

It's an iphone app where you post a problem and fellow users help answer your problem. App was created by an english trash collector. Is wuite a hit i hear.