The most important step to get rid of debt

Debt, the most accepted and dangerous obstacle to building wealth for American, is continuing its growth without slowing down. Debt has become a life norm as a vehicle to lead us to a better life. It allows us to own a car, a home and many other believed to be necessities. No one in your life to be surprised that you have a debt and debt is so normal that the majority (56%) said that debt has “low” or “no impact” on their ability to achieve financial security. 

Now allow me to be very bluntly here. How many people around you who owes higher and higher debt each year accomplished their financial paradise? Most of them will forever in debt. You probably will argue that the debt will be paid off at some point. A 2017 study from Experian and, 73 percent of consumers had outstanding debt when they were reported deceased.

Here is another fact to show indebtedness has become such addictive disease that many of us don’t realize. Per Northwestern Mutual 2018 planning and progress study, 53 percent of Americans cited debt reduction as their top 2018 financial priority, average personal debt (exclusive of home mortgages and among those with some debt) climbed higher to exceeding $38,000 in 2018 compared to just over $37,000 in 2017. More disturbingly, credit cards tied mortgages as the leading source of debt, spiking from 19% to 25%.

More disturbingly, credit cards tied mortgages as the leading source of debt, spiking from 19% to 25%.


So why most people accept debt and even belive that debt is the ticket to happiness is beyond my understanding. There are so many downsides to indebtness:

  1. You are paying for higher price for everything. Interest you pay to your debt limits your lifestyle. You might not know this, financing company typically has a double gross margin rate comparing to selling same merchants without financing.

  2. Your life options and goals are gone. You are in a circle to allocate most of your income to debt that you have no long term objectives that can be prioritized. In another word, you live day by day and achieving financial independence is nearly impossible.

  3. Your stress level is up. Either you have to live unhappily or you spend more money to deal with your mental health problems. Dr. John Gathergood of the University of Nottingham studied the correlation between carrying debt and any depression and anxiety associated with it. Gathergood found that those who struggle to pay off their debts and loans are more than twice as likely to experience a host of mental health problems, including depression and severe anxiety.

  4. You learn to be in denial and fail to recognize debt will never truly resolve on its own. You shut down your thoughts on how to reduce your debt and let it erode your life.

So what is that most important step to get rid of debt?

Acknowledge it! Acknowledge that debt is an obstacles to your financial freedom, not a help!

Acknowledge your debt and set mentality of avoiding any further debt until you solve the debt at hand. Practically you can get rid of your debt if your mind is set to do it. Until you acknowledge that there is no such thing called “good debt” or “good loan”, until you are ready to solve it at a price of changing life style, until you acknowledge that debt is the biggest roadblock to your financial independence and freedom, you will not get out of the slavery of indebtedness.

How to get rid of your debt?

The simple principal is called “Avalanche” approach where paying down debt in the order of interest rates. Credit card debt that charges your interest rates, pay it off immediately at all cost including less spending everywhere. Then pay down for the debt that has lower interest rates.

Put your goal of getting rid of debt to a visible place, like your refrigerator to remind of yourself. Document your progress and feel proud of what you achieved.

Don’t use “snowball” approach

Snowball approach is where you pay off your small debt regardless interest rates. It might help you to feel a bit less debt, but at the cost that you can avoid.

Once your debt is gone, you feel a re-born and lift in your spirit that allow you to open to so many more options. Invest, invest and invest! It is a way of avoiding into another debt circle and helping to get you to your ultimate goal, financial independence and confidence. You will get there and we will do it together here.


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Simple Wealth For Women is a blogging website focusing on financial discussions. I help women to crush debt, learn how to invest and make more money. I show you simple approach and provide you with specific ideas to help you get to financial freedom and build an amazing life.