Breaking Free from Debt Denial: Your Ultimate Financial Wake-Up Call

We’ve all been there.

You swipe your card for that new pair of shoes, justifying it with “Treat yourself, you deserve it.”

Or maybe you borrow money from a relative, promising to pay it back “next month.”

Before you know it, you’re neck-deep in debt, and the idea of facing it feels overwhelming.

Let’s be honest…

We Filipinos have a unique relationship with money.

We’re resourceful, resilient, and always find a way to make ends meet.

But sometimes, this resilience can mask a deeper problem: debt denial.

Why do we deny our debt?

Debt can be a heavy burden, and it’s easy to understand why many Filipinos find it difficult to confront.

It’s a complex issue with emotional and psychological dimensions.

Let’s delve deeper into why we often turn a blind eye to our financial obligations.

Fear

The fear of facing the reality can be overwhelming.

You might worry about losing your home, car, or other valuable possessions.

Or perhaps you’re afraid of disappointing your family or friends.

This fear can paralyze you, making it difficult to take action.

Shame

We often associate debt with failure or lack of financial discipline.

This can lead to feelings of embarrassment and shame, making it difficult to admit our financial situation to ourselves or others.

We might worry about being judged or seen as irresponsible.

Hope

It’s human nature to hope for the best.

We might believe that our financial situation will improve on its own or that a sudden windfall will come our way.

This false hope can delay us from taking necessary steps to address our debt.

But here’s the harsh truth:

Ignoring debt doesn’t make it disappear.

It grows, like a silent monster lurking in the shadows.

Signs of Debt Denial

Denying your debt is like burying your head in the sand.

While it might feel easier in the short term, it can lead to significant problems down the line.

Here are some common signs of debt denial:

Avoiding bills and statements

You might find yourself stacking unopened bills in a corner, pretending they don’t exist.

Or maybe you open them, glance at the amount, and quickly put them away, hoping the problem will solve itself.

Making minimum payments on credit cards

While it might seem like you’re making progress, paying only the minimum means you’re paying more interest in the long run.

It’s like treading water when you should be swimming to the shore.

Using one credit card to pay off another

This is like using a Band-Aid to cover a gaping wound.

It might provide temporary relief, but it doesn’t address the underlying problem.

Borrowing money to pay off other debts

This is a dangerous cycle that can lead to a snowball effect of debt.

You’re essentially trading one debt for another, often with higher interest rates.

It’s like using one credit card to dig yourself out of a hole, only to find yourself in a deeper one.

Feeling stressed or anxious about money

Constant worry about finances is a clear sign of financial distress.

You might find yourself losing sleep, snapping at loved ones, or avoiding social gatherings due to money concerns.

If you recognize these signs, it’s time to wake up.

Breaking Free from Denial

The first step is acknowledging the problem. It’s okay to be in debt.

Many Filipinos find themselves in similar situations due to various reasons like unexpected expenses, job loss, or simply overspending.

Remember, what truly matters is taking action to improve your financial situation.

Face the Music

Facing your debt head-on can be intimidating, but it’s the first step towards recovery.

Gather all your financial documents, including credit card statements, loan agreements, and utility bills.

Calculate the total amount you owe to get a clear picture of your financial situation.

While it might be overwhelming, knowing the exact amount you owe will help you create a realistic plan.

Create a Budget

A budget is your roadmap to financial freedom.

List all your income sources and categorize your expenses into fixed (rent, utilities) and variable (food, entertainment) costs.

Identify areas where you can reduce spending without compromising your quality of life.

Consider cutting back on subscriptions, dining out, or unnecessary purchases. Remember, small savings can add up over time.

READ: What Your Budget Says About You: The Surprising Truth Behind Your Spending!

Prioritize Debts

Not all debts are created equal. High-interest debts, like credit card balances, can quickly snowball if not addressed.

Prioritize paying off these debts first to minimize interest charges.

Consider using the avalanche method (focus on the highest interest debt first) or the snowball method (focus on the smallest debt first) to stay motivated.

Increase Income

Boosting your income can significantly accelerate your debt repayment journey.

Explore opportunities for extra income, such as freelancing, part-time jobs, or selling unused items.

Consider your skills and interests to find a suitable side hustle.

Even small amounts of extra income can make a big difference.

Seek Help

You don’t have to go through this alone.

Financial advisors or counselors can provide expert guidance and support.

They can help you create a personalized debt repayment plan, negotiate with creditors, and develop healthy financial habits.

Don’t hesitate to seek professional help if you feel overwhelmed.

Final Thoughts

Remember, breaking free from debt takes time and effort.

There will be setbacks, but don’t give up.

Celebrate small victories, and reward yourself for staying on track.

Your financial well-being matters. It’s time to take control of your money and build a brighter future. You deserve it!

Have you experienced debt denial? Share your story in the comments below.

Start getting your finances in order by making a budget.

Try my free budget templates by clicking the image below.