5 reasons being Debt Free is Not Financial Management

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You’d be hard-pushed to find someone who hasn’t had some experience with debt. Especially in the US, it is a part of our lives pretty much from the age we’re able to vote. It is the norm. It is accepted, and for most unavoidable. It is no wonder then that our main financial goals and our financial management plan revolve around becoming debt-free. We often see that as our end goal, what we are working towards and that it is going to solve all of our problems.

And why wouldn’t we? With so many financial gurus and experts, especially in the US, drilling into us that our number one goal in life should be to pay off debt. There is so much wrong with that.  Don’t get me wrong, being debt-free is huge. It can relieve stress, can open up possibilities, and allow you to breathe a little easier again. However, real financial management is a lot more than just that. Here I’m going to discuss why focusing on debt can actually be hindering you from achieving financial freedom through smart financial management and how you can properly set yourself up for long-term success, no matter what is thrown your way.

Focusing Just on Debt is Problematic 

As touched on above, focusing all of your financial and budgeting goals on your debt is sabotaging your chances of achieving true financial success and freedom. Why? Well, it is a reactive approach. Often with actions that are taken responsively, you can rarely get ahead. It focuses on solving one or an immediate problem, rather than looking ahead and making premeditated decisions about the future. Reactive actions are “fixer-uppers” to put it ohhh so eloquently. Fixing “problems” from the past is never going to allow you to plan ahead. It can also help you to not make the same mistakes again so that you don’t have to use debt in the same way in the future.

True Financial Management is Proactive 

Once we stop focusing on paying off debt, we can change the way we think and take action when it comes to our finances. Turning the reactive approach that, let’s face it, doesn’t work into something productive, forward-thinking, and effective. Let’s take a look at some of the things possible, once we lean away from only focusing on debt.

Financial Management is Planning for the Unknown 

I mean, do I even need to give you guys an example for this…. I will anyway. The past year of all of our lives has shown us that nothing in life is guaranteed. The truth is, no one knows what is around the corner. Focusing too heavily on the past, won’t allow you to prepare for the future.

True financial management takes this fact into consideration so that no matter what happens and which waves hit, that you are an anchor in the sea that does move. We don’t have to be riddled with anxiety about the “what if’s” every day. We just need to be aware that we don’t have as much control over what is happening as we think. But, what we can control is how prepared we are for it. 

Financial Management is Planning for the Known 

It’s funny how your friends and family have the same birthday every year but it always seems to shock and surprise us when they come around. Christmas, holidays, yearly insurance, and things like taxes can creep up on us, even though we are fully aware that they pop up annually. Focusing too much on debt can cause so much undue stress when there are so many known expenses that you could be planning for.

What about home maintenance, car repairs, illnesses, and pregnancies, to name a few? These are not uncommon things. Why wouldn’t they be part of our financial plan!?! To reiterate the point, how can you have control over your finances without factoring in and planning for the future? 

Financial Management is Creating Actual Wealth

We get duped into a vicious cycle. A cycle that, when you’re stuck in it, feels like there is no exit. We max out credit cards throughout the year to pay for the inevitable expenses, some of which as stated above. We start relying on our tax refund to pay it all off and have this short sense of relief and satisfaction that we are now “debt-free” or in less debt than before.  We focused so hard on paying it off that we fail to save a cent of our income. 

What happens when we don’t have savings? We chip back into the debt that we were so elated to pay off a couple of months prior. That is the cycle. Are you wondering how you got into that cycle? Surely we don’t voluntarily sign up for this? With so much shame and guilt surrounding debt, it is no wonder that it’s what we focus on and the first thing that we want to get rid of. 

What we should be doing is saving for the things that come up, so that as we are paying off our debt, we can pay it off for good and not have to use it again. 

Financial Management is Creating Balance in Your Life

Life isn’t about saving or paying off debt. It can be hard to not get wrapped up in it when you’re consumed with worry and just general thoughts about money or lack thereof. Creating balance in your life while having a concrete financial management plan is going to ensure that you have the life that you wanted without sacrifice or without being consumed by what is in your bank account, plus, and minus. That’s why we need to redefine our money goals to not focus on paying off debt but creating a life that we love and that is filled with joy. 

Final Thoughts

Paying off all your debt would feel great. But it is not the be-all and end-all of life. We can only focus on paying off debt when we have created savings and wealth. Breaking the cycle may feel hard at first, but it is so worth it! It is also a vital element for successful financial management. It is so important that it is something that I focus on in my Bulletproof for Life Program. Check out the link to find out more. 

Looking for more expert financial and budgeting advice? Take a peek at the Bulletproof Blog

I’m Sarah


On a mission to change the world of finance from stuffy suits and guilt-trips to a place of understanding supported by solid strategy; I have personally journeyed from homeless teen mom to ass-kicking CEO and now my work centers around empowering women like you to do the same.

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