Forget Your Debt. Just Forget About It. Really.

What if the most common strategies to repay debt are wrong?

Two popular methods are used to repay debt. One focuses on the interest rate; the other focuses on “small wins.”

I recommend reading this post if you want a solid understanding of these two methods. Here’s the executive summary: the “Debt Stacking” method says you should repay the debt with the highest interest-rate first. The “Debt Snowball” method says you should repay the smallest debt first, regardless of its interest rate, so you can feel the psychological “win” of crossing it off your list.

I think both of these fall short. So today I’m going to propose a third method: the Forget Your Debt method.

The Status Quo Stinks

The Debt Stacking method makes logical sense. You’ll save the most money if you repay the loans with the highest interest rate.

The problem is that many people have a hard time motivating themselves to repay a large debt, regardless of its interest rate. No matter how much money they throw at a big debt, the balance never seems to subside. The person feels like they’re not making progress. It’s akin to being on a diet but never seeing the pounds melt away. They become discouraged and quit.

The Debt Snowball method, which obliterates the smallest debt first, can keep you motivated.

But it comes with a large price tag. You’ll make minimum payments on high-interest debt — which means the compounding balance will climb higher and higher.

For anyone who runs a spreadsheet to compare these two options, the hundreds — maybe thousands — of dollars it costs to use the Debt Snowball method is a bitter pill to swallow.

Switch Your Focus

The problem with both strategies is that they both focus on the wrong thing.

The interest-rate method focuses entirely on the numbers, but fails to take psychology and emotion into account. The Debt Snowball method focuses entirely on psychology and emotion, but fails to honor the numbers.

What if there was a method that focuses on both?

Forget Your Debt

Both the interest-rate method and the Debt Snowball method share one trait in common: they force you to think about your debt.

Thinking about debt stinks. It causes debtors to feel trapped, shackled. It breeds discouragement.

I want you to do the opposite: forget about your debt.

You’re Already Free

Debtor’s prisons were eliminated in the mid-19th century, but focusing on debt makes people feel imprisoned.

You’re no more “free” when you repay your debt than you were when you carried debt. (The other way of looking at it: you’re just as free with debt as you are without.)

You still have to put groceries on the table, keep the electricity on, fill your car with gas, put clothes on your back, save for retirement, send yourself or your kids to school, write checks to your insurance company and give the government your tax dollars. Fail to do even one of these things and you’re in serious trouble.

So why do people feel free when their last debt is repaid? It’s because they’ve spent too much time and energy focusing on debt. They should be concentrating on the bigger picture – and that starts with eliminating the “d” word.

Eliminate the D-Word

Repaying debt is like dieting. If you focus on deprivation, you’ll fail.

Tell yourself “I shouldn’t eat chocolate … and cupcakes … and warm brownies with a delicious scoop of French Vanilla ice cream on top … and I shouldn’t eat pizza with spicy pepperonis and ground sausage and fresh mozzarella … and a steaming bowl of chili with an ice-cold beer … and I shouldn’t have bacon, eggs and a buttermilk biscuit … ”

Neither your brain nor your stomach hears the “I shouldn’t.” If you think about the fact that you’re dieting, you’ll fail.

The trick to dieting is to focus not on the deprivation, but on the abundance. Instead of thinking about all the foods you shouldn’t eat, think about the foods you get to eat: blueberries, quinoa, fresh-caught salmon.

Diets don’t work. Embracing a healthy lifestyle does. Eat more of what’s good instead of less of what’s bad.

A successful diet requires eliminating the “D” word — “diet”.

Repaying debt is the same way. The fastest road to discouragement is to focus on debt and deprivation. You shouldn’t go to the movies. You shouldn’t go to dinner with your friends. You shouldn’t get a haircut.

What a terrible way to live.

Successfully getting out of debt also requires eliminating the “D” word. Shed your “debtor” identity.

Focus on more of whats good rather than less of what’s bad. You’re not trying to repay debt. You’re trying to build wealth.

Adopt a ‘Build Wealth’ Mindset

Adopting a wealth-building mentality can be tough if you’re used to thinking of yourself as a debtor. You have to switch from a mindset of sacrifice to a mindset of creating abundance. Here are a few pointers on how to do it:

#1: Eliminate the D-Word. Cross out all written references to that word. Announce to your significant other, your family and your friends that you’re not allowed to say the D-Word. Place a jar on your kitchen counter: every time you say the D-Word, you have to contribute a dollar to the jar.

#2: Read About Wealth-Building. Buy books, read magazines and blogs, and listen to podcasts that focus on building sustainable wealth. Be choosy. Stay away from media that focuses on cost-cutting as an act of deprivation. Focus on media that celebrates wealth-building as an exciting opportunity.

#3: Remember: You’re Already Free. Take a look at your bills each month. You have expenses just like everyone else: groceries, electricity, gas. Maybe a payment to your credit card is among your expenses, but guess what? Lots of debt-free people have expenses you don’t have, such as caring for an elderly parent or supporting 4 kids.

Getting out of debt won’t set you “free.” True financial freedom comes from having passive investments that make enough money to cover your cost of living. Most people don’t experience that, and those who do enjoy it have spent a decade or more relentlessly pursuing it.

#4: Get Excited About Opportunity. There is a wealth of opportunity (pun intended) to build your net worth. Pick your favorite methods: you can invest in real estate, buy dividend stock funds, start a business … the options are endless. Focus on the opportunities at your fingertips. Once you switch to this frame of thinking, you’ll notice a huge opportunity staring you in the face — the opportunity to save $100 a month or $200 a month in interest payments. This isn’t your get-out-of-debt plan; this is one of many opportunities in a grand wealth-building lifestyle. If you make a few extra payments on that MasterCard balance, you’re not “climbing out of debt;” you’re taking advantage a stellar opportunity.

#5: Make It Visual. Post photos of all the wealth-building opportunities you want to capitalize on. If you want to own rental properties, put up pictures of a building in a location you love. Want dividend stocks? Put up a graph of historic returns. Want to see how much an extra $100 a month towards your car loan will save you? Draw it, sketch it, graph it, and hang it on your walls.

#6: Write an Opportunity List and post it somewhere you see occasionally. If you post it somewhere you see everyday, you’ll grow numb to the sight of it; it will start to blend in with the background. You’re better off posting it somewhere you occasionally see, where it will catch you by surprise. Stick a copy in your sock drawer. Paste a copy to your glove compartment. Try outlandish: Tape it to the inside of your freezer, so you only see it when you open the freezer door.

Thanks to Jason Rogers, Gloria Payne (Morning Glory), Alan Cleaver and Mene Tekel for the photos.


  1. says

    I love this post! I couldn’t agree more about the D-word. As a dietitian, there are so many similarities between saving and eating for weight maintenance or weight loss. Both take discipline and a positive attitude. I really hope you get a lot of traffic for this post!

  2. says

    I also like the mentality. What better way is there to earn 15% or more on my investment, both guaranteed and tax free? I am not paying off my credit cards; I am making a wise investment and improving my passive cash flow.

  3. says

    I was in a similar situation where I had an underwater mortgage debt and college tuition to pay for. Instead of worrying about nickel and diming my way. I needed to make more money. So, I rented out my rooms in my townhouse to do just that. Nearly 5 years later, I paid for grad school and paid off a significant amount of my mortgage debt. A world of difference.

  4. says

    At first I wasn’t so sure when I read your title. Forget Debt? Isn’t that irresponsible, I thought. BUT this is such a great reminder. As a recent college grad all I can see is a BIG HUGE FAT D and it is not only Demoralizaing Devastating and Dreary it is the only thing I ever want to do. But the reality is, I can’t send every penny I make off to SallieMae. I have expenses and besides people seem to think this kind of debt is “good” debt. (I hope they’re right!). I totally agree that sometimes the best thing is to forget the current situation and like Mike (above) have a little perspective so that you can get where you need to be in 5 years. Thanks for your creativity

    • says

      @Alysa — Thanks! Yep, that headline is meant to be an attention-grabber. And you’re right … the “D’s” of being in debt — demoralizing, devestating, dreary — can really bring you down! There’s no need to feel sunk. Your student loans are an investment in your future, and the financial decisions you make from this point forward will be great choices aimed at improving the “big picture.”

  5. says

    I’m fortunately not in credit debt, but am now in a bit of student loan debt. I found that even when I had money but was spending it too rapidly and trying to stick to a budget, the biggest detriment to my pursuit of balance and establishing good habits was punishing myself and feeling deprived. It seems that by focusing on my bad behavior, deprivation and how to “fix my spending,” I felt POOR not BROKE (there’s a huge difference) and I put myself on an emotional elastic band of making progress and bouncing back, feeling guilty all the way!

    You hit the nail on the head, focus on abundance and be kind to yourself as you work towards either a debt payment or savings goal!

  6. says

    You have a fresh perspective and I really enjoy your posts. I recently paid off my house so I’m totally debt free. Do I feel any freer? No, but I do feel a sense of accomplishment and peace of mind. And the opportunity to have the cash roll in and build wealth is a significantly different feeling, then sending that same wealth to the banker. But you are right the obligations remain, and things aren’t that much different than before I paid the house off.

  7. says

    I like the way you think! I’ve thought about it too; you’re no more free when you eliminate your debt than when you have it. You still have bills to pay. Wealth building is such a more positive way of thinking than debt elimination. I’m hoping the change in mindset will help me in the long run.

  8. says

    Loved this post! Re-framing the “debt mindset” to an “opportunity mindsiet” is a great tool. It makes me think of moving from a place of victimhood to empowerment by realizing all the different choices I have available to me. every time I make a purchase (or a debt payment) I’m making a choice about an opportunity given to me.

    • says

      I may be a little rusty on my hosrity in this area, so please forgive me if some of my facts are not perfectly accurate.Alexander Hamilton took out the first loan on behalf of the United States in 1789. The essential idea was for the debt to be repaid in a timely manner, saying if it is not excessive, will be to us a national blessing. Such a debt allowed for America to have much more purchasing power and access to liquid assets than, say, a system like France, which lacked a national debt system.The issue is that the debt has become excessive, even taking into account inflation from the dollar’s establishment to now. Under good policy, the debt could be repaid in several, several years; however, this would take much more than the 4 or 6 year term limits that the president or senators are based on. As such, it is unlikely that the debt will be repaid in significant part anytime soon, given that policy quality between terms of policy makers is seldom ever consistent.You must keep in mind though, the debt does not have to be repaid, but simply reduced to reasonable numbers once again. It is always inflated in times of great war or economic hardship, both of which the US is currently involved in.

  9. says

    Mindset is really everything.I read an interesting post about inner beliefs. Elephant in India, are trained from the beginning to obey.
    When they are big, there is no need to use bigger ropes as they dont even try to brake free! Those animals are convinced of NOT making it.

    We are not different. Most people need to brake the wall of inner beliefs and start doing what they REALLY can do.

    • says

      @Marlene — Great analogy!! I heard the same about sharks who are kept away from food by a clear glass plate that they crash into every time they try to attack their prey. Eventually they give up trying to attack the prey. Even when the glass plate is lifted, they no longer try.

  10. says

    You know, back when I had a pile of student loans, I never actually thought about or calculated the interest rate numbers. I did prioritize the debt by highest interest first but my primary focus was to reduce the amount of incoming mail. I never had more than one credit card and for me the small victory was to have to ink one less check that month.

    Reducing monthly expenses and simplifying my life were my goals. The numbers worked themselves out eventually.

  11. says

    Very much enjoy this reading and agree completely. Probably the most important thing about what you propose here is that you are creating habits of building wealth, savings and managing your finances instead of focusing on the habits that got you into debt.

    Once you create these habits and get out of debt now you are left with a solid foundation to build your wealth.

  12. Rosemarie Price says

    no “D” word allowed It’s true, no one is “free”, we all have obligations to pay for. But you are right the obligations remain, and things aren’t that much different than before I paid the house off. A world of difference. Mindset is really everything.I read an interesting post about inner beliefs.

  13. Josie Vance says

    What better way is there to earn 15% or more on my investment, both guaranteed and tax free? Most people need to brake the wall of inner beliefs and start doing what they REALLY can do. I am not paying off my credit cards; I am making a wise investment and improving my passive cash flow.

  14. says

    This was one of the best articles I’ve ever read on repaying debt. I’ve been in the process for a long time, although I only got serious in May, but this is the kind of mentality that makes it a lot easier to pay back my debts. Each month I am closer to not having so many monthly payments. Each month I am closer to having more money to do with as I choose. I’m free now, but I’m ensuring even more freedom later! Love this article :)

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