If you’re working on climbing your own debt mountain, I’ll bet you’ve said more than once, “I wish I was out of debt” or maybe “I’d love to have no debt.” I understand those thoughts. Yesterday’s expenses are a pretty heavy weight to shoulder as you climb toward some big goals. Improving your debt ratio will give you more cash flow and flexibility. Just don’t call getting out of debt a goal. It isn’t.

Back in “the day” when I was an advisor, at the beginning of the first meeting with a potential client, I used to tell them we’d do two things: find out what their goals were and then talk about how they’re managing their money. These two parts of a financial plan should work together, but in most cases aren’t.

In many of these meetings, when I’d ask for a list of goals, a client would lean forward and say, “I want to be out of debt.”

I’d answer, “What do you want to do once you’re done getting out of debt?”

Most of the time people were so stuck on their debt problem that they’d never stopped to think: what if it wasn’t there? What should I do then?

Debt Is a Gigantic, Ugly Hurdle With Pimples

Did you watch the hurdles at the Olympics? Getting out of debt is a hurdle, but the world’s ugliest one. Each athlete has a series of problems in their way to find the finish line. Athletes don’t say, “Man, I’d like to get over that ugly-ass hurdle.” They say “I want to win the race.”

“Retirement” “new house” and “education” are some of the finish lines. Your debt ratio is keeping you from that goal.

Why It Matters

When you reach the summit and actually get out of debt, you shouldn’t be surprised when you bellow out a gigantic “WHAT NOW?” You have more money, more freedom and more flexibility. What do you do with it all these new resources?

Doughnuts? A sports car? Create a life-like statue of a car on a mailbox?

While those are excellent possibilities, I know what you’d do: use it to reach some goals.

You’re more likely to win if you focus on your goals. Here’s what I mean:

Anyone who listens to our Two Guys and Your Money podcast may not be surprised to learn that I’m a stutterer. They called me “The Jackhammer” in first grade. People would say over and over “stop stuttering” as my face contorted into an ugly grimace and all I could muster was “Th-Th-Th-Th-Th-Th-“. The phrase “stop stuttering” did nothing to help. In fact, if I thought about NOT STUTTERING, all I thought about WAS STUTTERING. Ironic, isn’t it?

Instead, I had to quietly think about the point of my sentence. I needed to look at the finish line. After two years of speech therapy at Western Michigan University, it’s barely apparent that I stutter. Some brilliant teachers taught me skills to make sure that you rarely know when I’m struggling to get the right words out. Mostly, this is because I was taught to focus on the end game, not on the hurdle.

It’s the same when someone says “I want to lose weight,” isn’t it? You could even substitute “I should stop eating ice cream” or “You shouldn’t pick your nose.” In itself, these only point out the negative that you SHOULDN’T focus on.

Why Debt Returns

Every once in awhile, we see a person keep the laser focus it takes when getting out of debt without real goals. Once they reached the top of debt mountain, though, they often don’t have anything to push on toward, so what happens then?

They jump right back into debt.

In short, their debt ratio sunk because they didn’t have a real goal for their newfound wealth. There was nothing the get-out-of-debt wagon was really driving toward.

It’s the same for what we’d call “shallow goals” in our office. People who wanted to “leave work” struggle during retirement. They cope with the fact that they’re getting older and there isn’t any reason to wake up anymore.

Those people didn’t have a goal to “retire.” They just wanted out of THAT job!

How to Stay Clear of the Ugly Debt Monster

It’s been written so often that you need to write down your goals that it seems trite to repeat here, but it’s true. When you focus on buying a new house, you’ll have to eliminate the debt hurdle to get there. Instead of being flustered by your debt ratio, you’ll watch it melt away because you can’t get the new house without the debt being gone.

By following a clear set of positive goals that you’re steering toward, it’s easy to focus on paying down debt. There’s something tangible now behind it. You can pick out curtains, look at furniture, imagine landscaping. It’s real. Tangible.

You might be thinking that finance guru Dave Ramsey has helped people clear the debt hurdle by celebrating it. He sure has. He’s turned “getting out of debt” into a celebration, where people want to be able to cheer about that finish line themselves. They want to holler on the radio. Maybe this is an easier way to fight the “debt as goal” problem that America has. If people want to be able to say “I’m debt free” enough, they’ll stay motivated to reach the finish line. While it works (you turn the celebration into the finish line), I believe for most of us the easiest path to a lower debt ratio is to focus on what you really want in your life, and the debt will melt away. You’ll be cheering, too.

Photo: Alan Cleaver