Breaking The Debt habit
Understanding the Debt Habit
The debt habit is carried by people from all income groups. From those earning a few thousand to those earning hundreds of thousands a year, it makes little difference. The underlying cause of most debt habits is not money but rather, beliefs, thoughts or emotions often developed in childhood. In some cases the debt habit is just that, a habit. The easy availability of credit from a very young age and the high selling pressure of advertisers causes youngsters to develop the habit of impulse, compulsive debt spending, they know no other way - they have simply never experienced the freedom of living debt free.
The process of getting out of debt is relatively straight-forward, the challenge lies in changing the behaviors that cause debt in the first place. To achieve this kind of change requires dealing with and overcoming the beliefs, thoughts and emotions that lie beneath the debt habit.
Identifying a Debt Habit
How can you tell if you have a debt habit? Here are some of the common syptoms of a debt habit.
- Always seem to be in debt
- Fearful or anxious aboup paying bills
- Borrowing from friends or relative and often not paying them back
- Hopelessly optomistic about sources of income
- Sense of elation when a new loan or credit card application is approved
- Bouncing cheques
- Looking for others or external events to solve your money issues
- Credit cards always carry a balance and often maxed out
Breaking the Debt Habit
The key to breaking the debt habit is to identify the underlying beliefs and attitudes that currently feed the debt habit and to challenge them. Whilst such beliefs may be deeply ingrained, they rarely stand up to any close scrutiny. The process of challenging these negative beliefs is not always quick or easy, but persistant chipping away, works. Slowly your attitudes and beliefs will start to change and your behaviours and your relationship with money will change for the better.
Below are three steps to get the process started.
Become Aware of Your Debt Habit
A debt habit is very like an addiction and the first step to overcoming it is recognizing it. Just becoming aware of your debt habit will start the process of challenging it and cause emotions & feelings to rise to the surface. Hold on to any emotions that you get, try to identify them, they are an important clue as to the basis of a debt habit.
Look into the Past
Most money habits have psycological roots based on events and beliefs developed in the past, often in very early childhood. You need to explore your past for key events and money messages that you may have received as a child. Here are a few things to answer and explore, consider writing things down in a notepad or on paper.
When you look back over your life examining key events, you will find emotions attached to some of them. Do you recognise them? Can you link any of them to your attitude about money?
- What money messages did you receive as a child, how did your parents feel about money and what did they tell you?
- When did you first go into debt, what persuaded you that it was a good idea, what benefits did you get?
- When was the last time you were debt free? How did it feel?
- Recall any major emotional events in your childhood.
List Out Your Debts
List out all your debts and include the following details
Then add up all the debts and do a summary of total debt owed and how much each month it is costing in interest.
- Who the money is owed to
- Amount Owed
- Interest Rate
- Interest Amount each Month
Self-Sabotage & Facing Your Fears
Breaking any habit is hard and the road to eventual success will be bumpier for some than for others. If you have a set-back, do not dispair, pick yourself up, learn from the failure and start again. Keep at it, persistance will bring you success and financial freedom, so it really is worth the struggle.
It is the nature of our subconsious to resist changing any deep-seated beliefs because they challenge who we are. We are looking to change the person we are now to someone who is "wealthy and successful", if that does not fit how we subconsciously feel about ourselves, our subconscious will resist.
Resistance manifests in many ways, but as soon as we start modifying our behaviours, we can experience anxiety and thoughts that try to drive us back into the old pattern, our comfort zone. Using positive affirmations and other positive thinking techniques to help push you through these moments definitely helps.