Breaking the Debt Cycle

“Without struggle, no progress and no result. Every breaking of habit produces a change in the machine.” – George Gurdjieff

steps to break the debt cycle

We live in a society that, not only encourages us to spend but which also makes it really easy for us to spend money we haven’t even earned yet. When you consider that carrying debt is so socially acceptable it’s considered “normal” but managing debt still isn’t taught in schools, it’s not hard to see how people can get in over their heads. The trouble with debt though, is that it makes you vulnerable. It takes away your buffer zone; it strips you of your ability to save and it forces you into a position where a missed paycheque or an unexpected expense can push you close to the edge financially.

Some people argue that carrying debt is a necessity and that “payments are a fact of life” but I disagree. I believe that, while there are circumstances that can lure people into taking on debt, accumulating and carrying debt is a habit. Fortunately, it’s a habit that can be broken. It’s not necessarily easy but I can tell you from personal experience that it is absolutely worth the effort. Here are my three steps to breaking the debt cycle:

Step 1: Get Irritated!

Whenever you’re trying to break a habit, your chances of success are much higher if you have a powerful reason for making a change. Doing something because we “should” or because someone else wants us to, is not usually a strong enough reason and this is why it often leads to frustration and failure. For me, the turning point was when I realized just how much money my bank, my credit card companies and other lenders were making because of my choices and my bad habits. I took a look at the interest I was paying each month and then I figured out how much I could be saving (and how those savings could be growing) if I didn’t have those debts and I got really mad.

I vowed that I would do everything I could to get rid of that debt because I wanted that money to be working for me, not for a creditor. That irritation was what kept me going as I climbed out of debt and it’s what keeps me from choosing to go back down the debt path. If irritation isn’t a powerful motivator for you, find something that is. Maybe it’s a desire to be in control of your financial future, maybe you want to be able to give more to the people who mean the most to you, maybe you just want all the “stuff” that goes along with having money. Choose something that means something to you and let that be the reason that drives you to change.

Step 2: Get Educated!

All too often, it’s not what you know that will get you into trouble; it’s what you don’t know. This is especially true when it comes to finances. As a financial advisor with a background in teaching, I don’t understand why our kids spend weeks in High School learning how to factor quadratic equations and no time at all learning how credit, debt and investing work. Financial Literacy and Financial Education are two things that I am passionate about because they make such a difference to people’s lives. The financial services industry does an excellent job of making people feel like they need a degree in finance to manage their own money but that’s just not true. Today, with so many great resources available online as well as in stores, there are plenty of places people can go to learn whatever they want to know about money and plenty of smart, credible people who are willing to share their knowledge and experiences free of charge. If you want to break the debt cycle, take advantage of these. Managing your money isn’t rocket science; it hinges on creating a few simple habits and sticking to them.

Step 3: Take Action!

For me, up until the point where I got irritated by my situation, money had never been something I considered terribly important. I didn’t understand much about it, I didn’t have a mad desire to become rich and so I didn’t pay enough attention to how much was coming in and going out each month. A series of bad decisions in my 20s led to a lot of debt in my early 30s which I didn’t worry about because I had a good job. However, when 2010 hit me with a house purchase, a marriage breakdown and a job loss (all within the space of four months) it didn’t take long for that ticking time bomb of debt to explode.

The one thing I know for sure about life is it’s unpredictable. I know that there’s nothing I could have done to alter the curveballs that hit me in 2010 but I also know that if my financial situation had been more stable, the impact of those curveballs wouldn’t have been nearly so hard. I believe that when life knocks you down you have two choices; stay down or get up.

Often the easier choice is to stay down, feel sorry for yourself and look for someone or something to blame for your fall. The tougher but more powerful choice is to look around, evaluate your situation and then get back up. No matter how bad your situation, no matter how hopeless it feels, there is a solution. It’s probably not easy, it’s probably not quick but a month from now, a year from now, five years from now, I can tell you from personal experience that you will be so glad you made the choice and put in the effort. Breaking that debt cycle was the single most powerful thing I have ever done for myself financially. It’s life changing.

It’s said that there are two times when people quit: right before they start and right before they succeed. If you feel like quitting right now, maybe taking the next step towards breaking that debt cycle, is what will open the door to success?

Editors note: is thrilled to have Sarah Milton join our team of writers. As an account manager with Clearpoint Benefits, Sarah’s role is to help educate people about how to manage their finances. We hope you enjoy the simple ease Sarah brings to helping people learn more about how to manage their money.

Category: Debt Management |

Dec 17, 2014


About Sarah Milton

Sarah Milton is currently stretching her professional wings in Edmonton, Alberta in a role that allows her to combine her talent for writing and speaking with her training in the financial services industry. She is passionate about inspiring people to get excited about their money and empowering them to take control of their financial future. Sarah is the co-author of the book, Take Control of Your Money, she writes a weekly post for and writes twice a month for You can follow her on Twitter @5arahMilton

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