Debt is not a financial problem. Debt is actually a personal problem masquerading in financial clothing to deceive you. 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. Defining your debt problem is critical to solving your debt problem. Since most people in debt define debt as a financial problem, they look for financial solutions. Big mistake! 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.
The number one reason for debt is personal life habits and attitudes that result in overspending. In other words, the true solution is personal – not financial. That is a key principle. Understanding this principle is what will make or break your success in slaying the debt monster – permanently.
Everyone knows they need to make more and spend less to solve their debt problems. As a result they pursue financially driven solutions to relieve financial symptoms. It all 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. You are performing the financial equivalent of blowing your nose when you have a cold.
The only permanent solution is to change your life habits and attitudes that got you into the problem in the first place. You are the cause of your debt, and you will be the solution. 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.