Debt is a Four Letter Word

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For most of my adult life, I never really considered debt a four letter word. You know the type I mean. Those coarse, offensive type you start using as a teenager to act cool around your friends.

I always viewed debt as a necessity, a way to get things I didn’t have the cash for immediately. Having a fifteen-thousand-dollar piece of plastic in my pocket felt powerful. My embossed name and member since on the front of the card made me feel important.

The monthly payments were not a problem. A few hundred dollars to have access to a credit line of fifteen-thousand that was a trade-off I was willing to take.

While that single card was not the problem, it did lay the foundation for the start of bad behavior that would be repeated over and over again.

Hundreds and hundreds of transactions and overspending over four more cards, with larger credit lines and all with their own minimum payments. That few hundred-dollar payments now ballooned to almost two thousand per month.

That’s just a math snapshot of the debt; it doesn’t tell the story of the stress, fear, and fights the debt caused. The feeling of powerfulness now turned to weakness, and the importance felt like an embarrassment.

The word debt was now starting to feel like those other four letter words. Those I often used in my youth, and now as a dad would never think of using in front of my own children. It was time for a change, time to take responsibility, time to clean up the mess this little four letter word had caused.

Dealing with that Four Letter Word 

It turns out that dealing with debt and managing your money comes down to pretty common-sense steps. The trick for many is having the initial introduction to the topic. Often the topic is not a typical conversation at home or taught in school and leads to bad behavior.

Here are some basic steps to help take control of your debt, that nasty little four letter word.

Realize you need Help – Once you accept this, it is easy to move on to the other steps. It took a rock bottom moment for us to realize we needed to make a change. Once we did, we began increasing our overall knowledge on the topic. We used blogs and books. Dave Ramsey’s “The Total Money Makeover” remains my favorite books today.

Define a Why – Changing your behavior and getting out of debt will not be easy. It will take hard work and sacrifice. It’s a good idea to discuss the “why” for these changes. Having a “why” a goal that you are trying to achieve will help keep you focused and motivated. Our why was to stop living paycheck to paycheck, build a better financial future for our family, and teach our children better money habits.

Build a Plan – Now that you’ve mentally and emotionally ready for the change, you need to create a plan. The best way is in the form of a budget. I started our budget using an excel spreadsheet and still use it today. You can jot it down on paper, use an app or software like Personal Capital, but whichever way you choose you to need to get your total income, debt, and expenses down in some format.

Track Spending – A budget could take time to evolve. I suggest tracking your spending for 30-90 days saving all receipts to see where your money is going. You may be surprised at some of the dollar amounts of some categories. They could be much higher or lower than you initially estimated. Once you have the data collected, you can make adjustments.

Communicate and Agree on the Plan – If you’re single, you’re in control of your own destiny, but it might be useful to get an accountability partner. Someone who can help keep you on track, or at the very least bounce ideas off. When in a relationship, it’s so important to be on the same page with your spouse, partner, children, etc. when making changes like this.

I was the one who initiated the plan for us, but before we started anything, I reviewed it with my wife. We compromised on some things but came away with an agreement on our money and budget. Then, we looped in our three children, so they were aware of the changes and to help start to educate them about all things personal finance related.

Communication is not just a one-time thing; it’s ongoing every day. Our family discusses money and budgets all the time.

Stop Building New Debt – You cannot get out of debt if you continue to add new debt. To be successful with your money, you need to break the cycle. You do not want to dig yourself further into a hole; you want to begin climbing out immediately. It will be challenging to break old habits, change your behavior, but once you saved a cash cushion, it becomes easier to stay out of debt.

Wants versus Needs – Once you have a clear understanding of the budget and all expenses, it’s time to prioritize the expenses into two buckets, either a want or a need. As an example, food and shelter are clearly needs, the new 60-inch television or pair of shoes are wants.

Once you organize your expenses into these two categories, you will find items to cut. These reductions will become saving that can be used for paying a debt or for building cash reserves. The key to remember is you can afford anything; you just can’t afford everything.

Emergency Fund – Or as I like to call it a peace of mind fund. You need to have some cash saving for when life happens or Murphy come to visit you. We never had an e-fund before 2010, and when an appliance broke, or we got a flat tire, it was stressful.

We didn’t have a plan for unexpected things and often used a credit card to cover these costs. A $1000 saving will cover most events and reduces so much stress and avoid money fights, and you will not understand this benefit until you have the savings in place.

Pick a Method to Pay off Debt – The debt snowball is the way we paid off our debt. The debt snowball is a debt reduction method where one owes on multiple debts and pays off the account, starting with the smallest balances first while continuing to pay the minimum on all other debts. After the smallest balance is paid off, the payment is snowballed to the next smallest debt. This method helps build momentum.

This worked best for us. Others use the Debt Avalanche method where you pay off the balance with the highest interest rates first. Anyway, you choose to pay off your debt is fine, as long as you are not adding any new debt along the way and adding as much additional money as possible to your repayment.

Most banks and credit unions offer free credit counseling. Check with yours, and they can supply you with additional advice and information that you may find helpful. You can always speak with your creditors yourself and request an interest rate reduction. The best approach is, to be honest, and be diligent. Don’t give up after the first “no.”

Once you have these steps in place, you need to continue to track your progress. Set time aside each week or month to review your progress. Maybe after some time, you need to make some adjustments to the original plan. It’s important not to set it and forget it when you first start.

It’s also essential to stay motivated over the long haul. If you need an extra incentive, one suggestion is once you complete a debt payoff, and before you roll it over to the next debt, use that debt payment to celebrate.

Build Wealth – Once you have completed your debt repayment, you will have a surplus of income each month. I would recommend building wealth. Increasing emergency fund savings is an excellent first step to cover you for when more significant life events happen. Could you survive a job loss? 

Build retirement saving by investing. Save money for college, a house, a vacation, a car, etc. The possibilities are endless once you free your income up to spend on your priorities and not minimum payments.


We stopped using the four-letter word in 2010. We built a plan for our money in the form of a budget, cut expenses, and increase income. It was really tough to cut debt out of our life cold turkey because we had relied on it for so long. 

After doing things a certain way for over twenty years and overnight begin to do them differently it’s not going to happen without a little pain. The hard work was worth it because being on the other side of debt for a few years now it brings a peace of mind. I never want to experience the uncertainty of living paycheck to paycheck or the stress that having debt hanging over my head can bring.

If you are living with the fear and uncertainty of debt, make a plan for your money, ask for help, and stop using the four letter word for good.

36 thoughts on “Debt is a Four Letter Word”

  1. We have eliminated all of our debt, except a small mortgage. The mortgage rate is low enough we aren’t in a big hurry to pay that off. I generally have a negative view of debt…..and as a result save up cash for big purchases like cars and so forth. We also pay off our credit card balance every month.

    I do believe that all debt is not created equal, however. Consumer debt is bad….because it generally leaves you with nothing (or at best a depreciating asset). My back ground is in engineering and land development, and I can appreciate why people use some debt to purchase real estate or business assets. If they asset isn’t heavily leveraged, cash flows, and has a low risk of collapsing in value….purchasing with debt can be a good risk


    • Thanks Bryan.Consumer debt should be avoid.It keeps you from building wealth. I have heard many stories of small business debt being left over after the business failed, so it can be risky too. Important to have a plan before deciding on taking on this type of debt.

  2. Thanks for sharing, Brian!

    People go into debt for so many different reasons- some of them are due to just plain bad luck. I agree with Benjamin Feldman’s quote about the misconception that debt indicates a character flaw or weakness. Debt has a stigma attached to it, leaving many ashamed to talk about it and afraid seek out help.

    As I was reading through Reasons Why People Go into Debt, I was most surprised at “Inability to pay back loans to finance wedding”. I know weddings can be costly, and I guess it’s been a very long time since I got married, but I can’t imagine taking out a loan for a wedding!

  3. We still have debt from student loans and we are about to take on a mortgage, but we will never be in high interest consumer debt again. The only form of consumer debt we might take on at some point will be a car loan, but this will be carefully considered first.

  4. Shocked to read that 3 out of 4 americans live from paycheque to paycheque. That does not corresponds with my view of the land of plenty and tons of opportunity…

    My wife has been in student debt, all paid back now. The other debt we have is mortgage… I consider this ok debt to have. We will always try to stay away from consumer debt. I do not see a reason to have that.

  5. I love this! I was surprised at the average total debt amount. We took on less-than-average amounts of student and mortgage debt, and have committed to prepaying them. I’m not sure if we’ll avoid all debt forever when we’re doing paying it off, but we will never have consumer debt, including cars. We might invest a rental property in the future, though.

  6. Debt can be a good way to get through college, but it’s so much better to avoid it or minimize it. I got a *good* job out of college and still have had to side hustle, cut expenses, and be smart about how I’m managing my money, all just to “get ahead” a bit. Debt can be debilitating, but if you can be proactive about managing your money better you can definitely get in a better spot.

    • I think it’s important to understand the big picture before taking on college debt. What the career path look like, salaries etc. It may help you make better choices with how much debt if any you take on.

  7. I’ve only been in high consumer debt for a few months in college. I have never felt comfortable owing people money so have always worked to get things paid back quickly. That being said,mwe are down to a small car loan and our mortgage and have no plans to take on more in the future.

  8. Debt really can get you into trouble. Congrats on working your way out. And thanks for sharing these great infographics! I love seeing visualizations of interesting stats.

  9. Good for you Brian as you have been free for so long now. Consumer debt is the worst, and it will only get better if you draw a sand in the line with borrowing. I tread very lightly around debt, as I hate it. Hey look at that another 4 letter word.

  10. These are really interesting infographics. I actually get encouragement from them now. Four years ago – not so much. I have some disagreement with the first quote you have from Feldmen. It’s true that unexpected circumstances can lead to debt, but it’s up to each of us to be prepared for the unexpected. We were caught off guard by job loss, and we went deep into debt. Now, we’re setting ourselves up so that if there’s another unexpected financial hit, we’ll be prepared, and it won’t result in such massive debt. So Feldmen is right in that circumstances beyond our control can negatively impact us, but he neglects the fact that it’s within our control to prepare for those times.

    • You make a great point Ruth. For us we failed to see that for years. we just kept repeating the cycle and feeling the stress and sorry for ourselves when these events popped up.

  11. Thankfully the largest piece of debt my wife and I ever had was our mortgage. After that it was probably my car loan. It could have been much worse.

    Both my wife and I had good examples growing up. Our parents live within their means. If my wife and I were still in debt today I think that would be one of my biggest motivators. I want to set a good example for my two girls. I want to show them that debt is a financial tool but that it needs to be treated respectfully and only certain things can/should be bought with debt.

  12. It’s hard to get out of the debt mindset, but it’s possible. And it’s worth it. I used to think that debt was completely normal until Mr. Money Mustache made me realize it was a pants-on-fire emergency, not something to keep around for 30 years.

    • It’s amazing once you flip that switch have different your life becomes in so many areas. Glad you found the deb free side!

  13. I believe debt is a 4-letter word too. And I’d love to see this whole notion of good debt vs bad debt obliterated from the conversation, while we’re at it. That makes it way to easy for people to make excuses for their debts. Take a mortgage — yes that could be considered good debt but how many people with a mortgage make payments that are only 25% of their take home pay, as Dave Ramsey recommends? Same thing with student loans — $25K may get you though school but if you think of it as a good debt, why not take $50K in loans and keep your pockets full for social activities, clothing, etc?

    • It is a funny argument good versus bad debt, why not just avoid debt in the first place. I bet you’ll live a more stress-free life if you do.

  14. We did some consumer debt when we were younger too. Buy a living room set with no down payment and three years to pay – sure! Why not? Luckily, I was warned about what would happen if you missed a payment or didn’t pay the whole thing back in time. Once I really understood that – I paid it off after the first year! Debt can relieve stress in the short term but then it kicks your a$$ over the long haul. People are allowed to take on WAY too much debt too. Cutting it off cold turkey worked for you – and I think it’s what many others need to do to. Not easy, but effective.

    • The long term effect is often what we fail to see. What’s the quote “life is a marathon, not a sprint..” The sooner you can visualize the big picture the better you’ll be.

  15. I know I’m abnormal, but I just don’t believe much in the “good debt/bad debt” theory. When a person is in debt that are in bondage to their job until they pay it off. Not to mention, as you did, about the immense stress that comes when debt gets out of hand. Use with caution, my friends. Or better yet, just pay cash. If you get a mortgage, get it paid off ASAP. Wonderful post, Brian. Well said. Thanks for exposing debt for what it is.

  16. The medical debt stats surprise me some, but, it shouldn’t be too much of a shocker seeing how our own premiums have literally doubled from a few years ago. We switched to a health sharing ministry plan for that very reason.

    And, health care gets real expensive real quick regardless of which insurance you have.

  17. That stat is surprising but just think of the cost of one unexpected stay in the hospital without coverage. The cost quickly adds up.

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