Updated on 09.16.14

The First Steps On How To Get Out Of Debt

Trent Hamm

A while back (has it been almost eighteen months already?), I wrote a very detailed article about coming up with a debt repayment plan. This plan works – it’s what I did when I realized that I was in serious financial trouble and needed to overcome it.

Yet it’s not the first step in the process. The absolute first step in getting out of a bad debt situation is to break your personal cycle of debt usage.

If you’re not willing to completely stop using debt and to spend less than you earn every single month, no debt repayment plan of any kind will help you.

This is often harder than it sounds. For many people who find themselves in a desperate debt situation, living above their means is simply a way of life. I know that it certainly was for me. I wouldn’t even think twice about spending small amounts of money and I usually found “good” reasons to spend larger amounts as well.

I firmly believed that I deserved lots of material items and the simple fact that I didn’t actually have the money to pay for them didn’t matter. I had credit, after all.

I had part of it right: I did deserve the good things in life. What I didn’t understand, though, is that the good things in life aren’t bought with a credit card.

The good things in life come from having less stress in your life. Stress is derived from a job that you can’t walk away from because you have so many bills to pay. Stress comes from facing a mountain of bills without much cash in your checking account. Stress comes from wondering whether or not you’re going to be able to make rent or make the mortgage payment next month. Stress comes from having more stuff than you can enjoy or possibly deal with. Spending less than you earn alleviates all of these stresses.

That reduced stress helps you across the board. It improves your health. It improves your energy level. It improves your attitude. When you improve in all of these areas, people notice.

When I was in debt, I had all the material trappings I could ever want – but that’s all I had. I stayed up at night worrying about my bills. I was stuck living in a tiny apartment – and even then I was sometimes struggling to pay the rent. I was scared to death to step out of line even one inch at work, which meant that I constantly played it safe, which meant that much of the enjoyment of the job evaporated since I was now doing work I didn’t really want to do. My wife and I got upset with each other quite regularly because of the money issues.

But, by golly, I had myself plenty of electronic gadgets and nice clothes!

Those material items were a prison. They kept me sequestered away from the life I really wanted to lead.

When I realized that those very things that I thought I truly wanted were the very things that were making me unhappy, it became easy to make some changes. I tossed the credit cards, sold off a lot of my gadgets to whack down my debts quickly, and started discovering new things to do.

Who would have ever thought it was more fun to go on a bike ride on a lazy afternoon than to buy yet another barely-played DVD or video game? Even better, when I got home, I wasn’t facing a stack of bills.

The first step towards getting out of debt is to recognize where the real problem lies. It comes from the things you choose to spend your money on – the very things you’ve convinced yourself that you need. Those splurge purchases that are the “spice” of your life are the very things that are causing you to be stressed out, stuck in place, and looking for a way out.

You don’t need that stuff.

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  1. This is also the premise of a wonderful book: “How to Get Out of Debt, Stay Out of Debt, and Live Prosperously.” One day at a time, just don’t debt. It’s based on the principles of Debtor’s Anonymous.

  2. You make some great points in this article. I love the concept of recognizing the real problem. People seem to want to take things at face value when in fact the real problem is so much deeper.
    So many people don’t enjoy the little things in life. Without that it is very hard to have motivation to change. If you don’t have a reason then why would you ever change? It sounds like for you stress was a driving factor.

  3. BirdDog says:

    I couldn’t agree with you more. I also found that while I was racking up debt, the pounds were creeping up on the scale as well.

  4. karyn says:

    We don’t splurge or overspend too often on ourselves. My problem is overspending on my children. And not so much on material things but on experiences — it’s been hard to let go of the idea that they need to be involved in this or that activity in order to be “well-developed”. But in all reality, we can’t afford all of these activities for three (soon to be four) children.

  5. Fully agreed. Breal the cycle of personal debt usage is the only logical first step. This has to happen.

    John DeFlumeri Jr

  6. sweetiegirl says:

    This is wisdom.

  7. Amateur says:

    Trent, I think your money meltdown was definitely stress induced but for many people debt is really associated with internal depression over many little things. People do need pick-me-ups and buying things alone and enjoying some things alone (like music cds/books) helps alleviate that down in the dumps feeling. It does take an insane amount of courage to tell people about internal issues, that we’re not perfect and our lives certainly need a ton of work to get there to become more self-reliant and self-fulfilled people without needing to buy all this stuff to feel good or fit in.

    Having to plan my media purchases and such has not been as bad as it seemed. Unless the item was not going on sale for another 6-8 months, I would not pay the full price and wait for a sale or a used version. In the past, I would rush out and get it release day and have it sit on a shelf after a few hours of use and realize I did not have the time to really enjoy it right away. I felt that I could save time by buying early and it would always be there, but did not consider that I spent more having it sit there. Baby steps all the way..

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