075: Dealing with Debt

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Welcome to another episode of Tuff Love, with Rob Kandell. This is episode 75, and the topic is Dealing with Debt, which is something people have commented is important and very timely. Debt is something that everyone in the modern world has to deal with, and a big part of personal growth and expansion is the ability to consciously deal with your debt instead of letting it run you. In this episode Rob shares his lessons around debt, and then coaches Chantel around her current situation with life and money.

There are all kinds of debt. The obvious ones are the financial debts we take on in life: bank loans, student loans, credit cards etc. However, there are many other kinds of debt that are not so obvious or overt, including things like emotional debt, physical debt, family debt, karmic debt, sexual debt and the list goes on. These are all ways that we can bring on a form of debt in our lives that we need to handle and confront.

There is another way to split up the types of debt, too. One way to describe it is overt or conscious debt vs. covert or unconscious debt. Conscious debt is when we know we’re getting into it, and unconscious debt is when we don’t know that we’re taking it on. Sometimes you know exactly what you’re doing, there’s a contract, paperwork and you can see the clear effect on you that it will have for years to come. That’s a conscious way to take on a loan. This might be a business loan or student loan for example. You sign up for it knowing you have to pay it back and you know what you’re putting yourself into.

Then there’s the unconscious debt. This is the one when you don’t know when you do something that you’ll be taking on debt in the very near future. For example, when you’re young, invincible and you’re going to live forever. We do things when we’re young that we have debt for in the future. For some that’s simply not paying enough attention in school, paying too much attention in school, missing out on a youth from taking on too much responsibility, not taking care of our bodies, hanging around with negative influencing people or bad eating habits. It’s places we’re not putting attention when we’re young that end up coming back to us when we’re older.

There can also be unconscious debt in families and relationships. Perhaps it’s taking on the debt of our parents’ expectations. For example, sometimes parents expect things like ‘because I raised you, you owe me.’ In some cultures there are even overt family agreements about this. Whether conscious or unconscious, it can be a heavy weight that we feel. In our romantic relationships, there can be unconscious rules of engagement and if they get broken it can cause conflict. Sometimes in dating there can be tit for tat assumptions. E.g. ‘I pay for dinner, you give me sex.’ Commerce is so engrained in our society that it’s hard to escape this kind of transactional thinking in our relationships. Look at where you have these debts that you’re not clear about and what’s the effect on you and the effect on your relationships. Even months and years later those debts come back alive and we argue about them. Look at the places where you take on debt in your life and also put debts on the people in your life.

Here are Rob’s key points around dealing with debt:

  • We are screwed if we do and screwed if we don’t. There’s almost a perfect storm because no matter what, we’re going to be laden with some form of debt in our lives. Accept that being in debt is part of the human condition. Unless you live in isolation, there’s some form of karmic, emotional, physical debt in your lives.
  • Read the fine print! Sometimes on college loans or other loans, there is fine print that we don’t take the time to read or the sales person perhaps glossed over the extra finance fee. It can hurt a lot, so pay attention.
  • Most of us rue, despise and fear debt. A lot of us have an angry energy and victimization around debt. Whining is great for a period of time but it costs precious energy in the end.
  • There is a cost to not facing your debt. It is and can be challenging, but if you avoid it from fear and refuse to confront it, that’s when it grows and grows.
  • Your ability to connect to and confront rather than avoid debt is the most important and powerful step that you can take.
  • Make a plan, don’t hide from it, take the mystery out of it. Spreadsheets are good! Once you have a plan, it makes things a lot easier.
  • Negotiate that which is unreasonable. You can actually work with the people you owe things to. Tell them you recognize it and want to handle it. Talk about it, bring it to the surface and don’t let it fester. This is how you move from victim to villain.
  • There can be important lessons in experiences that bring debt, and in the process of getting out of debt. The LA Mother Debacle has been one of the greatest lessons of Rob’s life.
  • Celebrate when you pay it off, and celebrate every step of the way. Don’t pay attention to the big overall number that might take you 2-3 years to pay off. Own the little wins, congratulate yourself that you’re moving from inert and stuck into more connected and real.
  • Be mindful of you and your debt expectations of others. Be willing to look at where you’re creating debt that’s not proper or reasonable. If you feel like you have that with someone, bring it to the surface, make it real, connect to it and from that there’s a lot of power and clarity.
  • The way you deal with your debts, conscious and unconscious, is your path to mastery.

Rob coaches Chantel on the topics of debt, money and energy. Chantel feels like life is going really well right now, but her bank account doesn’t reflect that. They explore:

  • Chantel finds it hard to get upset about her financial status because she feel good. She’s put so much energy into work (several businesses) and passions but not getting the returns as expected.
  • When we multi-task, we keep all parts of ourselves entertained and satisfied. However, every time you change project you lose energy and over time this keeps you stuck or even going backwards.
  • Focus on one project until you have the basis that you need, the foundation. Rob always asks businesses that are starting out, “Where can you make the most amount of money with the least amount of energy?” Focus there for now while you build up that foundation.
  • We can put our focus and energy into money products and sexy products. Money projects are the ones that pay the rent and build the foundation. Sexy projects are the ones that turn you on. This comes from Rich Litvin
  • Focusing mostly on sexy projects is when the bank account doesn’t increase, but focusing on only money projects is when you lose passion and concern. Find the ratio between the money and the sexy projects. The money has the higher ratio to begin with.
  • If you don’t have that foundation and you are focusing on sexy projects, that’s where you can easily get into trouble. Cash is the blood of your business and your life. Find the balance, create flow.
  • Even when you avoid a debt, never look at it or declar that you’ll never pay it back, it’s still there as an energetic debt. It’s still a debt on your shoulders whether you’re confronting it or not. Some part of you knows it’s there and every now and then it does come back to screw things up.
  • A credit score isn’t important until it is really important. It shows up at inopportune times so don’t think it doesn’t matter.
  • It’s not necessarily fun to pay these debts and pay taxes and be responsible. But it’s not fun to be weighed down by them either and when you pay them you free yourself. Learn the lessons, free yourself and be grateful for it and even more grateful that it’s done.
  • There is always an opportunity cost. In business we have to be aware of the opportunity costs when making decisions. In terms of how much energy we spend not confronting our money, that’s an opportunity cost because we spend time and energy saying ‘there’s no problem’ instead of putting the time and energy elsewhere.
  • Rob suggests using some software like Quicken or Mint.com for just two months and see if it doesn’t improve your life.

A loan is never a bad thing, but unconscious behavior around loans is toxic. Be conscious about it, pay attention to it. Our culture says loan=death because most of us are not willing to confront it. But if you’re willing to confront it, it could be the smartest thing possible.