With Holidays Coming Up, Detox Your Debt
Kim Potgieter is a certified financial planner, ICF coach, New Money Story mentor, author and speaker. She helps clients get a return on their investments – and their lives – by having real conversations with them about money, meaning and how to make a magical life.
It’s always good to detox – whether it’s our bodies or our minds.
But before we clean up our acts, we need to come clean with ourselves. We’re creatures of habit, creatures who develop thinking patterns around whatever we’re habitually doing. It’s no different with debt. We develop habits that get us into debt – and then more habits that prevent us from getting out of it!
Worst of all, we believe our own lies. One is that we have to compete with others. We do compete; it’s normal. But it isn’t always good for us. Living a life defined by others means we live their lives and not ours. Plus, we spend more than we should. Because whatever the cost – literally – we must look the part (hairstyle, nails and clothes). As Edward Norton’s Fight Club character put it: “We buy things we don’t need with money we don’t have to impress people we don’t like.” Research tells us that people avoid thinking about money to avoid facing reality. So, somehow, pretending is at the core of our relationship with money. Because gone are the days of bartering – of swopping salt for sugar. Even our currency, founded on gold, has lost the connection to its value. Everything is blurry; credit cards, temporary loans and revolving loans are just some of the confusing credit options available. And online banking, banking apps and digitization make spending easy. Swiping a credit card or shopping online doesn’t even feel like spending, numbing us to our very own experiences.
Does this mean all debt is bad? No. Should we avoid technology? Absolutely not. Does it mean we should be more conscious when it comes to money? A thousand times over, yes.
So, how are you doing, debt-wise? Shedding habits means sharing secrets. Because denying your debt gives it power over you. If you’ve acknowledged yours, take the next step and talk to someone you trust. Ask yourself: why did you buy that new online item? Did you need it or want it? What does it represent? Does it make you feel worthy? Successful? Happier? Accepting your truth is everything.
Five debt detox to-dos:
- Describe, in writing, your best life.
- List your debts, with their corresponding interest rates.
- Pay them off one by one – from the highest interest-rated one to the lowest.
- Track your monthly cashflow. Where do you waste? Clothes? Restaurants? Be honest. (Beware: this might involve credit-card cutting!)
- Find a certified financial planner to develop a realistic plan for you. And when you’re tempted to debt-binge, reread your answer to Step 1. Remind yourself of who you are and the dreams you have, to ground you and get you back on your debt-free track.
Fraudsters can also get you into debt. Read our article on cybersecurity here.
Because there are lots of exciting things to get into in life. Debt is just not one of them.