Advertiser Disclosure
Advertiser Disclosure: The credit card and banking offers that appear on this site are from credit card companies and banks from which receives compensation. This compensation may impact how and where products appear on this site, including, for example, the order in which they appear on category pages. does not include all banks, credit card companies or all available credit card offers, although best efforts are made to include a comprehensive list of offers regardless of compensation. Advertiser partners include American Express, Chase, U.S. Bank, and Barclaycard, among others.

What Is Debt Addiction?


Additional Resources

For many people, our personal demons show up in many areas of our life, including our finances. Some of us try to make ourselves feel better by buying things we don’t need, ignoring our money problems, or wishing for magical solutions. A common end to this road is debt addiction.

What is debt addiction? Debt addiction is more than compulsive shopping. Someone who is addicted to debt uses debt as a crutch for solving their financial and personal problems without any plan for living differently or getting out of debt. Other signs include living paycheck to paycheck and never planning for the future, constantly being in financial crisis, or being unwilling to take care of oneself in order to pay creditors. You can read a complete list of signs here. Debtors Anonymous, a 12 step program modeled on Alcoholics Anonymous, brings people together whose lives have been crippled by their dependence on debt so they can help each other.

How do you know if you have a debt addiction problem? Lots of people have built up significant credit card debt. It doesn’t mean they’re all addicts or that their debt was incurred for a bad reason. There is a big difference between running up your credit card when you have been laid off, and running up your credit card because you are upset that you have been laid off. Often there is a mentality of, “What does it matter if I put more on my card? I don’t care about my balances and I’m going to ignore it.” Running up debt as a way to avoid having to acknowledge that you don’t have the money to provide for yourself or your desired lifestyle is dangerous territory.

How do you recover from debt addiction? As hackneyed as it sounds, acknowledging that you have a problem really is the first step towards deciding that today is the day you will start to look for a way out. The next essential step is taking a complete inventory of one’s debt and developing an action plan to deal with the debt. Actually facing the amount of your debt is a big step towards acknowledging the role you and your personal demons have played in digging this hole.

What can we learn from debt addiction? The culture of spending that is prevalent in America has pushed many people’s reliance on debt into the red zone. We can all learn some lessons from how the members of Debtors Anonymous deal with the way that their debt has taken control of their life. Here are the four steps followed:

1. Make an inventory of your debt. Figure out the interest rates and total balance on everything you owe. You can pull a free credit report to make sure that you have counted everything.

2. Stop running up new debt. Make a budget that includes at least the minimum payment on all your debt, and pay only with cash for the things you need. As part of this plan, you will need to distinguish between your needs and wants. If you cannot devise a budget on your current income that allows you to pay your minimums as well as your daily necessities, call your creditors and ask for help.

3. Find ways to free up more cash to pay down debt. If you’re at the point where your debt has become overwhelming, it is time to take a step back from the lifestyle you’re living now. If there is any way to live in a smaller home, drive an older car, reduce your cable or utility bills, or otherwise cut back, now is the time to do it. It is not a deprivation – it is an investment in your future, when you will finally be able to do the things you want without constantly running on the hamster wheel of debt. If you are absolutely cutting to the bone already, it may be time to consider bankruptcy. Bankruptcy can also be viewed as an investment in your future so that you can rebuild your life without the yoke of debts you can never repay. With this said, bankruptcy should not be taken lightly. Always consider the reasons behind why you should avoid bankruptcy.

4. Get support. There are many websites and blogs (like this one!) that offer support and advice about finances. Subscribe by email or RSS feed to blogs written by others who are getting out of debt – there are many inspiring stories of people who are struggling with their debt and succeeding. There are also many support groups and forums online where you can meet and talk to others with similar problems. This will help you counterbalance the urge in your head to simply stuff those statements in a drawer and ignore your finances, and help keep you from heading down to dig the hole deeper once more. You are not alone in this fight!

Every day you do not go deeper into debt is a day that you get closer to getting out of it. Readers, do you have any other suggestions for taking control of your debt? What has been successful for you?


Stock Advisor

Motley Fool Stock Advisor recommendations have an average return of 372%. For $79, or just $1.52 per week, join more than 1 million members and don't miss their upcoming stock picks. 30 day money-back guarantee.

Stay financially healthy with our weekly newsletter

Kira is a longtime blogger and serial entrepreneur who enjoys gardening, garage sales, and finding stray animals. She lives in Columbus, Ohio, where football is a distinct season, and by day runs a research study for people with multiple sclerosis. She hopes that the MoneyCrashers team can help you achieve your goals and live a great life.