Psychology of debt III and 5 of the most effective debt busters

Yes the psychology of debt is that complex that it can take three meaty articles to bed it down in your minds so that you start to take note of your behaviour and with some luck, actually begin to change it. That’s the aim here. Understand your money behaviour and then make small changes for different results.


Blaming is like instant gratification. It’s like making someone else responsible for the problem so that it goes away. But that option is only temporary and ultimately it is up to you to deal with.

Often the banks are at the receiving end of blame for granting the loan in the

first place or structuring the repayments in the way that they have.

It’s not my fault the bank gave me so much credit – they should have known I

could not manage it.”

Making access to credit easy and inflating credit limits does promote loosely

controlled spending. But it’s not only the banks. Many car dealerships and other

HP retailers entice consumers with no interest for the first three months and

slap it on in month four. Even clothing retailers are guilty of this – if you don’t pay your monthly instalment on the day, interest is slapped on.

Before you know it you can no longer afford it – and that’s not very surprising.

But who is responsible? Who knows better than you what you can and cannot afford?


And if you are aware of your financial position you can learn to manage debt.

Firstly you need to look at what money means to you. Is your self‐worth tied to

how much money you make?

Begin to observe how you behave around money ‐ what bothers you or pleases

you about money?

How do you feel in the spending situation?

How do you feel thinking about the situation afterwards?

Some of the feelings might be guilt, shame, fear, anger, excitement,happiness.

  •  Start to play close attention to your spending trigger. This will help you to prioritise spending and avoid buying on impulse.
  •  Set yourself a realistic budget and live with it – forget about the Jones’s
  • Studies show that people are less likely to spend on things they cannot afford when they are using cash than when they are using a credit card.
  • Reduce your credit cards to one or two at the most and pay the amount due in full on the due date.
  • Once you have learnt to manage debt you can begin to save and work towards important goals like education for your children and a well planned and comfortable retirement.

When you know how to save money, the next thing you can do is invest it, and that’s where Moneyfor2morrow really gets exciting.

Hold tight ..