Breaking the Debt Cycle: A Simple Method To Permanently Get Out Of Debt

Getting out of debt is a huge motivator for looking at your money. Debt weighs us down whether we are thinking about it or not.
Did you know that over 70% of credit card users do not pay their bill off in full every month?
And that you are likely to spend at least 30% more if you are using a credit card?
The popular US department store Macey's actually makes it's main profits from the store's credit card, not from merchandise sales!
Our whole economy is supported by our money habits, and the majority of us are on the losing end of this economy.

My Debt Story
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I realised in my late 20's that I was not very good at paying off debt.

I left university in the UK with a total debt of around $2k. Not much compared to today's stats!!

I happily ignored the debt as I wasn't earning the amount I needed to earn to bring in the compulsory payment legislation, and the debt was interest free.

A couple of years later I took out a credit card which was offered to me when I changed banks. I quickly ran up a debt of around $1500, on essential things, and paid off the minimum amount monthly, adding to it again regularly so that I was usually maxed out. Luckily I had the good sense to ask them to cap my limit, even when my bank was increasing it without consent.

My next debt was a personal loan of around $2k. And I have to admit I have no regrets about this debt at all!!

It came about following a conversation with another homeopath at a networking meeting. This woman announced that she wanted somebody to accompany her to a 2 week seminar series led by a famous homeopath whose books I was devouring at the time. The seminar was in Mumbai, India.

I had long held a dream of studying homeopathy in India, where it is the second most popular form of medicine and is highly respected by the orthodox medical profession and the public.

Mr Bank Manager gave me the loan and I had the most amazing trip, taking some travel time after the Seminar.

My final debt was a luxury item. A very beautiful sofa! So we did actually need a sofa and this was before ebay and gumtree. Me and my partner fell deeply in love with this enormous, feather filled delux sofa and I (not my penniless partner) signed one of those 'pay later' agreements which gave me a year to pay off the debt or I would have to pay a large interest rate, 30% I think. I had never owned such a gorgeous thing in my life and I loved it.

I now had debt of around $10k aud. And if you want to find out how I paid it all off you will have to read to the very end!

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What Is The Debt Cycle?
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The debt cycle occurs when we have accumulated debt, have succeeded in paying it off, at least in part, but then add to the debt again for some unforeseen or necessary expense. This is kind of what I was doing with my credit card, although I wasn't getting near paying it off completely.

It is a very common experience. In fact we are now trained by financial institutions to use debt in this way. So many people carry a credit card 'for emergencies'.
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But carrying debt creates feelings of shame and helplessness which can prevent us from seeking the help we need and from taking positive action. Another negative cycle!
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How To Break Out Of The Debt Cycle
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If you have ever looked into how to pay off debt, especially on multiple lines of credit, you have probably seen several different systems such as paying off the smallest debt first, getting all the debts onto one card, living on a minimal budget for several months or years even and no treats!!

Many people do pay off debt, huge debt, probably using these systems, but most will end up back in debt very quickly.

The key is to use a system that addresses the underlying cause of the debt.

i.e using a little bit of emotional intelligence!


This is SOOO easy!!
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This system I am about to share with you does just that. And it works to permanently eradicate debt from your life.

Why We Get Into Debt

There are two very simple reasons why people get into debt.

1. Not Enough Money

Most debt is accrued by not having enough money for unexpected bills or those bills that come up irregularly such as car registration, insurance etc.

It is important to see these bills as necessities in your life, things you need to be able to pay for.

Not having enough money can lead to needs going unmet in less obvious ways too. For example you may neglect your need for a holiday because you can't afford it and then suddenly book a week away, or a trip to India! This is impulsive spending but the reason is pretty simple. You need a break, a rest, an adventure, a change of scene! This is normal and holidays are a need. My impulse to go to Mumbai was also driven by a desire to learn more about homeopathy, a desire I had to ignore most of the time as I couldn't afford the PD trips to London.

The simple fact that your income must be able to cover the occasional holiday as well as the non-monthly bills, and...the occasional emergency such as vets fees, repairs etc., would have been news to me back then.

If you already have a pretty organised budget and you know that you can't cover all these costs then you need to increase your income somehow. I should have been charging my patients more so I could attend PD events and they would have benefited hugely. Under charging is a whole other blog post but there are reasons behind it and things you can do to address it. Even just becoming aware that you are not able to meet your needs effectively, seeing the reality clearly, can be incredibly helpful in itself.

If you aren't clear where all your money is being spent it may be that when you review your spending you can actually plan more effectively and allow for holidays etc. while staying on your current income.


2. Emotional Spending

Emotional spending is a pattern people fall into for all sorts of reasons. One of these reasons can be poverty, not having enough for decent shoes and then one day spotting the perfect pair and putting them on the credit card. This was probably behind my luxury sofa. I had not had many luxuries in my life :(

Or it could be a deeper need, something more hidden. This is more likely to result in several pairs of shoes piling up for each occasion. Here I would be looking for an emotional need such as not feeling acceptable, not feeling valued or appreciated. And often these issues have their roots in childhood.
Whatever the underlying reason the resulting spending is compulsive, an ingrained pattern that is very hard to simply stop doing.

The Simple But Effective Way To Get Out Of Debt
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So the method used to get out of debt must address these situations. If it doesn't then the you will find yourself back in debt again, even if you manage to stick to the tight budget and pay everything off completely!

Prioritise Self Care

​I never view debt as a "bad thing". It is in fact a very useful red flag telling me that some inner need has not been met, either now or in the past. It is time to look at this and bring in compassion and support.

It is not time to beat yourself up or go on an emotional starvation diet!

It is essential to keep having fun, seeing friends, getting some healing or counselling, buying the occasional treat for yourself.

Yes ESSENTIAL!
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But... you can do this in a planned and organised way, sticking to a well designed spending plan and cutting costs where you can. For example you may choose to visit friends at home rather than go out together, buy a scarf to brighten an existing outfit rather than buy a whole new get-up, etc

​Save AND Pay

If you plan to pay every last cent you can manage towards your debt what is going to happen when you have your next emergency? You reach for the credit card!

And then you feel you've failed and fog out again, stop planning and lose touch with what's going on with your money. Sound familiar?

When you know what you can afford to pay off your debt each month, take some of that money and put it in a savings account instead.

If you have some savings then when you have an emergency you don't need to increase your debt. Simple!

This savings account is for the things you would normally put on your credit card such as unexpected car repairs, non-monthly expenses, flight to go to a funeral etc.

Yes I know saving money at this point this means paying a bit more interest in the long run, and taking longer to be debt free but...we are talking about changing the habits of a lifetime here. It can't happen over night and its absolutely worth it!

This Works!!
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Used by leading US money coaches with decades of experience this highly effective method eliminates debt for life because it addresses underlying causes and really shifts your relationship with money.

As with any debt payment plan you will need to begin knowing exactly where you are with your money right now.

You need to know:

• How much you earn
• How much you spend
• How much you owe

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Once you have these numbers all you then need to do is put one foot in front of the other, take small easily achievable actions and before you know it you will have moved mountains!  

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​Did it work For me?
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There is a cute little twist at the end of my personal debt story.

During my twenties I lived with a penniless but talented poet. I largely supported him while we were together and the relationship was definitely a learning experience! Being a 'muse' sounds very romantic but its a lot of emotional work ;)) 

Anyway, my poet won a bursary from the Royal Literary Society and as part of the bursary they paid off all my debts!

Yes they even paid the bill for the delectable sofa, about ten days before the awful finance agreement kicked in. The poet got to keep it though which I suppose you could call poetic justice!