How To Gain Perspective And Find A Solution To Your Debt Problems

How To Gain Perspective And Find A Solution To Your Debt Problems

By |January 8th, 2014|

describe an elephant
Solving your debt problems can be as tough as a blind man trying to describe an elephant.

In the story of the blind men and the elephant, three blind men all come together to describe the animal.

The men are blind, so their descriptions are limited solely to the area of the elephant they touched. One man says the beast is like a tree trunk, another claims the elephant is like a snake.

It’s only when a sighted man walks by and sees the entire elephant all at once do they realize that they’re all wrong. Without perspective and the ability to see the full picture, they’re doomed to incorrect solutions.

Same with your bill problems.

You’ve got a mountain of debts and no clear way of paying them. You can start throwing money at the problem, but without seeing the full picture there’s a good chance you’re not going to get very far.

Let’s put together another plan of attack instead.

Take A Step Back

If you’re too close to the elephant, all you see is grey skin. Take a step back and you’ll notice the rest of the animal.

So, too, with your debts. Look solely at one bill then you don’t have a sense of your entire financial position.

Your credit cards may be up-to-date but your student loans in default. Rather than worrying about the student loans, take a look into ways you can handle the credit card debt.

Step back even a bit more and consider why you need to use those credit cards in the first place. Is your cell phone plan too expensive, which eats into your grocery budget and requires you to use plastic?

Looking at your entire financial picture gives you the perspective you need to get to the heart of the matter.

Brainstorm Ideas

When you’ve got a problem, you come up with the same short list of solutions. But what about something totally off the wall?

For example, about a decade ago I found myself in a financial bind. Business was terrible, my local economy was in shambles, and a major referral source had gone out of business. My debts were spiraling and things seemed hopeless.

Then I brainstormed by sitting down with a pen and a pad of paper. No solution was off-limits, no matter how insane (so long as it was legal and ethical, it was on the table).

After hours of frustration, I came up with a workable plan. I gave my car back at the end of the lease and started using public transportation. I cut my cable service. I sold some extras books and CDs online (remember, this is before iTunes and Kindles).

In the end, I was able to keep afloat until business turned around. Without brainstorming, however, I would likely have been in deeper trouble.

Say (A Theoretical) Yes To Every Option

There’s no single solution to a problem. Rather, there are many ways to get the job done.

Debt reduction can come in many forms, from cutting up the credit cards to credit counseling to smarter budgeting and more. The problem is that we view each of those options from behind the filter of our own biases.

For example, let’s go back to the cell phone plan. What would happen if you switched carriers or plans? Would you lose your phone and, if so, what options are out there for you? If there’s a termination fee, run the numbers to find out when the cost savings evens out.

With credit card debt, pretend you enter a credit counseling program and play out the long-term impact on your finances. How much would you pay each month, and for how long? What’s the impact on your credit score, and will any negative effect be outweighed by your ability to save money for the future?

Run the options by saying YES so you can see how it all plays out.

Be Your Own Best Friend

Let’s say your best friend comes to you with a financial mess.

You’ve done all your homework, brainstormed for the best ideas, and know the pros and cons.

What solution do you recommend?

Going through this exercise helps you keep from going through life like the blind guys checking out the elephant.

Do What You Need To Do

Perspective is useful, but only as an academic exercise – unless you take what you’ve learned and use it.

Whatever solution you find to your debt problems, you need to go out and fearlessly execute on it. Without action, you’re just wasting your perspective and dooming yourself to hanging around with an elephant.

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About the Author:

I've been a consumer protection lawyer since 1995, working to help people end their bill problems. I'm a faculty member at the Student Loan Law Workshop, a nationally recognized speaker, and a long-time member of both the National Association of Consumer Bankruptcy Attorneys and National Association of Consumer Advocates.