The emotional side of debt and your money

In theory, money and debt management are easy and logical. In reality, it is emotional and psychological.

Photo by Tengyart on Unsplash

It sounds simple. It sounds easy. Just live within your means. Spend less than you earn. Save 10% of your salary.

But the truth is. It is not that simple. If it was, the majority of us would never be indebted. We would be able to live our lives to the fullest within our means. We will all be “Wealthy”. Unfortunately, money and debt are psychological.

It is OK to have debt

Please don’t misunderstand. It is ok to have debt. Not all debt is bad. There is something called “good debt”.

As mentioned before, most of us will have some debt at some point in our lives. And this is perfectly natural. As long as the debt is in alignment with the goals that you have set for yourself.

Examples of good debt are the student loan that allowed you to further your education, the mortgage for the house that you purchased (within your means), your first vehicle that was required to get you from point A to point B. As long as the debt is within your plan, is required to ultimately achieve something greater and that you can afford it, it is good debt and not the worst thing in the world to have.

The problem comes in when you are indebted due to overspending. Buying a home or vehicle that you cannot afford. When you use debt to fund your lifestyle. Funding your lifestyle through debt is a very dangerous game to play.

When are you in trouble?

The easiest (and harshest) way to determine if you are in trouble is to ask yourself this one question. Student, mortgage, and vehicle loan aside. Can you repay your debt this minute? Can you repay your credit card or personal loan debt in one single installment comfortably?

The answer should be yes. If the answer is no, you are either already in trouble or quickly heading for trouble. The problem is that debt is cumulative and habit forming. This means that before you know it, you have become accustomed to using your credit card and creating debt. And before you know it, you cannot get out of the debt that easily.

As mentioned before, it is imperative that you can comfortably afford your monthly payments on your mortgage and vehicle loan. If not, it is also a sign that you have borrowed above your means, and you are heading for trouble. Especially if the Reserve bank decides to raise interest rates for any reason.

Qualities of somebody that is “at-risk” for debt trouble

This is very difficult to really say that one person is more “at-risk” than somebody else as your circumstances can play a big role. I have seen people with severe health issues fall into a debt trap very quickly, just because their medical insurance did not cover all procedures.

However, we were able to identify the following qualities that you might want to work on to spare yourself from the financial burden :

  • Denial about your financial situation. Believing that you are not in trouble when you are. Have a look at your financial situation and be honest with yourself.
  • The need to impress others through your belongings. This situation sometimes goes hand in hand with low self-esteem. The need to feel better about yourself and to impress others is a very fast way to trouble.
  • No impulse control on purchases and things that you want (but do not need).

Beware of the holidays

With the festive season around the corner, it is easy to get carried away. Buying all those gifts, maybe throwing one or two in for yourself. Maybe even taking a small trip on the credit card.

An unplanned and unbudgeted getaway can become a very dangerous event financially.


The important thing to remember is that you are not alone in your journey and struggles with debt. It is possible to get out of it. No matter how difficult it may seem. With the right plan in place, you will be able to set yourself free from the debt trap.




Cloud Solution Provider. Passionate about cloud business efficiencies and security.

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Cloud Analytix

Cloud Analytix

Cloud Solution Provider. Passionate about cloud business efficiencies and security.

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