Apathetic Debtor

The following guest post is from Neal Frankle of Wealth Pilgrim. Wealth Pilgrim is on my short list of daily reads. 

Several weeks ago a young couple visited my office. Their situation wasn’t all that unique.

He’s a teacher and she’s a CPA. Together they take home about $100,000 a year – not too shabby.

They had a little under $10,000 in credit card debt – mostly from their wedding. They also had a $20,000 car loan and $65,000 in student loans. Not the end of the world.

They had about $20,000 they saved since before they were married. I suggested they take $10,000 and get rid of the credit card debt pronto. They agreed to do this.

Up until this point of the story – I liked what I was hearing. After all, they are a young couple with plenty of upside income potential. I wasn’t crazy about the credit card debt they had accumulated but it only came about as a result of the wedding – not a slow creep of living beyond their means on a monthly basis. I wasn’t too concerned.

However, I started to sweat when we went through their monthly expenses.

While they were in deed paying down their debts, they had the option of doing so much faster and weren’t taking advantage of that opportunity.

Instead, they were spending $400 a month on personal trainers and a whopping $1200 a month on dinning out with friends. This $1600 was only the tip of the ice berg. Together we figured they could easily cut a total of $2500 off their monthly spending.

I showed them that once they did that, they’d be completely out of debt (including the student loans) in about 3 years. Then we looked at what their financial life would look like if they continued to save that $2500 a month. The picture looked very rosy.

So why was I sweating it?

Because they didn’t seem all that interested.

They came to me looking for a solution to their debt problems. I showed it to them and they shrugged. I just didn’t get the feeling they were willing to roll up their sleeves and really do the work.

Forgive me, but I think part of it has to do with their youth. They were enjoying life and maybe they figured they could always get out of debt and cut their spending “manyana”.

This was frustrating to me because I know that for many people, “manyana” never comes.

I couldn’t find the right words to get them interested in taking action to get out of debt and on the path to financial freedom.

Was there something I could have said? What would you have said in order to motivate this couple? Is it a case of leading a horse to water and therefore, a lost cause? What’s your take?


  1. Nope, nothing could be said at this point. Maybe when they fail (and these days, that is a big maybe) they will alter some of their habits. As we see, there are some who can’t seem to wrap their minds around the need for change, no matter how necessary it might be.

  2. “You can lead a horse to water, but you can’t make him drink … unless you feed him salt.”

    They haven’t been fed the salt of losing a job, the salt of large medical bills, the salt of becoming disabled, or even the salt of common sense. Up to this point, they’ve only known the sugar of a free-wheeling, live-the-good-life existence devoid of children and real world financial experiences and disappointments. I was just like them when I was 24, newly married, and making more money than I ever thought possible (and STILL racking up debt).

    They’ll come around — eventually.

  3. The problem is that most of our motivators to help people get out of debt are negative in nature. We tell people “you’ll be eating cat food when you are old if you do not change your behavior.” That sort of thing rarely works. People don’t like hearing negative stuff. So they tune it out.

    To get people out of their apathy, we need POSITIVE motivators. You could have told them that early retirement was a good possibility for them and then detailed what that can mean. People are more likely to change their behavior to pursue an appealing vision than to escape a frightening one (we go into denial upon seeing frightening visions — so we never really see them).

    Was early retirement really a possibility for this deep-in-debt couple? Absolutely. IF they changed the money behavior. Most people have no idea what their possibilities are until they take out a pen and a pad of paper and work the numbers. The trick is getting them to care enough to work the numbers and that requires placing a positive vision of a different kind of life before them as motivation to make the change.


  4. “Young and dumb,” as my great-aunt used to say,and
    “With age comes wisdom.” And my favorite,
    “Youth is wasted on the young.”

    Many older people I know still don’t “get it” and by the time they do, they’re too enmeshed or invested in their showy lifestyle to change: big, expensive house, big, expensive cars, big, expensive vacations, big, expensive tuitions. What would the neighbors/family members think if they decided to downsize, sell the cars, take Johnny and Mary out of private school?

    Tell those in the younger generation to hold on tight to their money because there are many other people who want to get their hands on it! Maybe then it will become a competition to keep more of it instead of a contest to keep up w/the Joneses.

  5. Too much too fast, instead of cutting out $1200 a month going out, cut it to $600, instead of getting rid of the trainer, once a month to revamp the workout, little steps,
    They are clearing what $6K a month, and you want them to all of a sudden cut bakt to about half that, it take time or something bad to change fast. A year from now they could be there, you got them to get rid of the credit card debt, have them out of the car loan in two years, then they will feel that lifted, then two more for the student loans, then that lifted, then ask them so what are you going to do for your retirement party when your 50?

  6. Sometimes the balance of benefits and burdens for certain people does not weigh in favor of cutting things from their budget in order to pay down debt. While it might make sense financially, these people appear to be receiving some level of pleasure in living the way they are, to the point that they’ve decided they don’t want to cut these items from their monthly spending (I hesitate to use the term “budget” because it doesn’t sound to me like they deliberately sock these amounts away each month).

    In my own life, I know I could eliminate certain spending in order to pay down debt faster, but the journey would be brutal. I read a lot of personal finance blogs where people suggest eliminating all the luxuries you can without making life miserable, and I’m sure a lot of people could look at my budget (which, I admit, needs some work) and find plenty of room for cutting — but I’m currently paying off what I can while maintaining certain “luxuries” that make life more enjoyable. I think it’s important to revisit a budget on a regular basis — and I could definitely stand to revisit the “catch all” category of my own budget — but for now, your clients’ budget seems to be working for them. And as long as they’re not headed for immediate financial disaster, I’m afraid there’s nothing you can do to stop them! And although I’m inclined to agree with you that they have things they can surely cut from their budget, who’s to say who knows best for somebody else’s budget? Yes, the old paternalism debate 🙂

  7. I think they’re being short sighted. While in college I made some bone headed moves with my finances.

    I knew what was the smart move, but I wasn’t ready to change. Fortunately I learned my lesson and my husband has been great. I paid off my credit card debt before I got married. We paid off the car loan this year and we’re tackling my student loans. It’s a process and I hope that young couple thinks about and decides to get focused on getting out of debt.

  8. All of these are great replies! Ron with the “You can lead a horse to water…” is sooooo true.
    I was in the Navy for 20 years and would often have young Sailors approach me about their financial situation. One said he only had $100 after paying all of his bills according to the budget the Navy made him do. Wrong.
    He was drinking a Red Bull which cost $2…and he drank about 5 a day. This comes out to (roughly)$70 a week, $280 a month give or take, and $3640 a year! All because he didn’t want to drink coffee, which he did like, and thought it was a “cool drink” to drink. (His words, not mine)
    So the story ends like the couple that talked to you…he is still drinking Red Bulls and spending his money on who knows what, and has no idea where it is all going.
    Hopefully, like all of us, he and that young couple will come around before it’s too late.

  9. I am 27 and have been struggling to get my finances in order since I was 18. It wasn’t until rather recently that I took the initiative to make a lot of lifestyle changes in order to break out of my debt cycle.

    I am not really sure when the switch was flipped, or why, but it was like an epiphany. I realized that I was screwing things up and that if I didn’t do something quick I would be a financial mess the rest of my life. I began paying down my debts, cut my spending dramatically and just yesterday paid off my car loan. My last debts are my student loans and will be focusing my attention on those beginning in December.

    I don’t think there is anything you could have said to convince them to be interested in their finances. I do find it strange that they came to see you, and then ignore your advice but, I guess they really aren’t that interested in making changes in their lives in order to prepare for the future. They’ll figure it out once they start falling further and further behind.

    We aren’t too good at foresight and we tend to respond to emergency situations more effectively than we do to planning in advance.

  10. What everyone said about them not yet knowing the hardships is true. Until you hit rock bottom and see just how bad debt can be, you cannot truly appreciate your freedom from it! These two have it so easy, that to them, the gravy train will never end, so why plan for it? LOL! I’d like them to walk in my shoes for a day! LMAO!

    Did you try motivating them with talk about the immediate future? Like what big things do they want to have in their life in the next 5 to 10 years? A house? A world cruise? Trip to Hawaii? A baby or two? Things that they really want and see for themselves, then show them how the spending cuts and subsequent savings could make that happen? Retirment (even an early retirement) is too far in the future for these two to focus on or even care about right now. They are just too short sighted. So maybe by giving them more immediate goals (even something in a 3 year range/meaning slightly less debt getting paid off) might be the “nudge” that they need for enough gratification to take you seriously? Just a thought!

  11. I like Rob’s point about using positive reinforcement, rather than negative. So much of our society is driven by fear – fear of becoming broke, getting sick, not being able to protect yourself from dangers. It is reinforced by government and traditional media (have you ever noticed all the ads for anti-anxiety/anti-depression medications that run during the nightly news broadcasts?).

    I’ve even fallen into this trap myself regarding things like emergency funds, etc. It is fine to acknowledge risk is out there, but obsessing over it and using is to motivate others is probably not the optimal approach.

  12. My husband and I are a lot like this “young” couple (we’re also young), but I think the difference with us is that we jumped into starting a family kind of early, so maybe that matured us a lot. I am 23, and my husband is 28, and we are on the way to being debt free. We fell into the trap of thinking that we should have everything our parents worked 20 years for.

    Now we are less than a year from being debt free, since we have cut our lifestyle way down. Before we made lifestyle changes, we would have been fine. We were able to make minimum payments, save a little, and still have the “luxuries” that we thought we “needed.” Then we discovered how fast we COULD get out of debt, and the thought of being able to have what you described to this young couple (debt free saving $2500/mo) – and we didn’t ask questions, we just did what it takes, and now we are less than a year from being at that point.

    You can lead a horse to water…

  13. The two things I can think of that might motivate someone in that situation:

    *goals — do they want to buy a house? go on a big vacation? do they have something they’re motivated to do?

    *figures — they must be losing thousands of dollars a year on interest, and that number is sometimes compelling. I know it was for me!

  14. there is really nothing much you can do or say to make an uninterested person get their finances right. I think that you should gently prod them into adopting a more frugal lifestyle because that spending will become a major problem in the future. But if they dont want to listen and implement your advice, they say that experience is the best teacher. When they get burned by debt, at least they will not blame you for the mess. i know that this suggestion is kinda harsh but i see no other solution in sight

  15. I think it’s important to remember that some people just don’t want to. And that’s ok. Always remember that what one person views as ‘essential’ another will view strictly as a ‘luxury.’

    I often find it uncomfortable to watch people from older generations, who have achieved and already have all the things the younger generation wants (IE: house, full size car, etc.) telling members of the younger generation to save your money and pay off your debts. Good advice to be sure, but it seems to come easy from someone who already seems to have it all.

    I see this situation very simply, and probably from an unpopular viewpoint on this particular blog, but these people CAN afford it. Yes they need to pay down their debt. Yes, they should be more conservative with their money. Yes, something such as job loss, medical expense, could happen to them in the future. However, right now they can afford their ‘luxuries’ and they want to.

    Bottom line, you gave them the tools. They took one and left the rest, but at least you explained to them the how-to part of the solution to their money problems.

  16. A lot of my smartest decisions are based on logical, rational thought not motivated by fear at all. Instead, fear keeps me from utilizing my money in a way that makes me happy sometimes. (Though I’m working on getting over it, for the most part.) I invest because I want to take care of myself in the future, whatever that entails… I really don’t have any grand visions of retirement, just that if I work a little at it now, while I’m young, I can spare myself anxiety down the road and not have to work so hard to make up for lost time. (Which one can never do anyways.)

    I’m not entirely sure that making them think about goals would work. After all, they’re comfortable with the debt they have, and I don’t think it would phase them to take on more to do something they want to do. Unfortunately, it’s probably going to take a purely internal connection on their part to make them want to change their situation, on their own. And, like many have pointed out, life’s only too good at handing down some tough love and hard lessons.

    I would totally be cool with bringing home $2500/month….. But being able to save that much? Sheesh, I’d have most of my plans covered!!! (I’m a “broke college student,” so anything more than the ~$1k a month I make seems like a LOT.)

  17. I’d recommend 2 things, because nobody likes to reduce their standard of living, at least if possible…

    1.) I would reduced the cost of what they were eating. This is a win-win, because you still enjoy the company that you are going out with, and at same time potentially cut your meal cost by half. I’ve learned to become a fan of soups (some are quite taste). Now, I’m not saying every meal should be soup, but perhaps half of them… I actually starting to do as an experiment with lunches at work, it’s working out great.

    2.) This will be a bit more painful, cut out some of the extra dinners, maybe 1 a month, then 2 next month, etc… It’s small but it will add up…

    As for the gym membership, as long as they are using it, great… Their health is more important than the money in that case… If they aren’t using it, have them stop for a period of time (perhaps next year, if it’s a yearly membership).

    Hehe, For a comic reflection of how to handle these cases, see a funny post I did a few days ago on my site. It’s called “Advice for Spendthrift Friends in Debt”… I won’t work, but it’s funny 😀

    Good luck with that couple. 😉

  18. $1200 a month dining out with friends.

    The part you missed was the friends part. By telling them to eliminate going out, you were telling them to stop having a social life which they were not willing to do. If you offered an alternative that included their social life, perhaps it would have been more palatable. We used to do theme pot lucks and dinners at people’s houses. You can have martini night and not have to spend $8/pop. Theme nights could save about 1/2 or more and not compromise on the social aspect.

    Second, you have to understand that all those years of college eating ramen noodles is over for them. Most people motivate themselves in college by saying. “when I get out of school, I’ll never (insert phase) again.” For me, it was working weekends..for my husband, it was fixing his crapbox cars.

    I also agree about the fear thing. It wasn’t until a possible job loss that I started buckling down again.

  19. @Lawrence:

    You’re right on.

    But it seems to me that rainy days are not the exception but the rule. The person or family who makes it through an entire lifetime without a serious illness, a massive job loss, a full-scale depression, an accident, a house fire, a disabled family member who requires constant care, or some similar rainy day is pretty rare.

    We don’t have the luxury of knowing in advance which day is going to be the rainy one, or exactly what kind of disaster we’re going to face. It’s possible that the disaster is going to be so catastrophic that it wipes out any defense you put in place no matter how well you prepare. Yet at the same time, the better a family or individual prepares, the bigger a disaster it will take to completely wipe them out to the point where they can’t recover by themselves.

  20. Sarcasom filter—-Why prepare for the rainy day, when/if it comes the government will take good care of you, let everyone else pay for it.

  21. Many people are interested in my story (I am 30, just bought a house, am debt free, and a single mom to two boys.) I have taken fianancial courses and try to help others in similar sitautions, but most people don’t really want to change. Friends of mine bought a house they can not afford, have tvs and game system’s in each room, and eat fast food every day. They asked me to help them with there finances but after I met with them it ended there.

    It is sad, as I don’t really feel like we go without stuff. My boys and I have a good life!
    It is of course all God, and I would love to help others as well, but most are content being in debt and so on.

  22. Well, Neal…what do ya do?

    I had an Aunt and Uncle who were cancer researchers, they were both hospitalized for lung cancer because they smoked! While in the hospital dieing, they both insisted on SMOKING! (That was back in the day when a person could smoke in a hospital…I know, long time ago.) But, the point is still the same. Stupid is as stupid does.

    Welcome Neal, we miss Jason, but know he will get through the long process of grieving in due time. I cried every night for a year after the loss of my little sister to cancer who was 44. She left four children who had lost their father several years before. It is a long process and it just has to run its’ course and he will be fine and we will be here for him.

  23. It’s endemic to being human, and is particularly strong in younger people: They don’t think the present circumstances are going to change, and that is the one thing that is certain. Job loss could really put them in a financial hole or catastrophic illness.

  24. Thanks for all the great comments. As always, I learn so much from all of you.

    Fooddiaryuser #26 – That story about your Aunt and Uncle is amazing. I just about fell out of my chair!

    I am also very very sorry to hear about your sister. That hits home w/me especially because I lost both my parents at 17. Anyway….

    Other folks commented about the goverment role in our psyche and I think that’s actually a great point. Never thought about it before. I also think back to when I was young(er?) and must admit that the idea of turning 50 one day was impossible to imagine – yet it was 2 years ago.

    Maybe the younger we are the more difficult it is to understand that we are aging.

    I also liked Rob’s comment about the salt.

    Thanks everyone.

  25. Neal, great post – I’ve seen this scenario before – the variables change (i.e – golf memberships, outrageous cable bills etc) but the root is always the same – they simply don’t want to change. They want to live debt free and not worry about money without making any sacrifices.

  26. Neal – They may be apathetic, but they sure are having fun! Besides, going to you to ask for help is the step in the right direction, meaning they will probably buckle down after their fun is over.

    I don’t want to look back on my life and say I didn’t have MAX fun!

  27. Maybe once they pay off their credit card bill, they’ll get that “debt-payment” adrenaline rush (or a least a little swoosh) and will feel more motivated. But I do remember that when my husband and I first married, money and time always seemed tight. Then I became a stay at home mom, money and time seemed that much tighter. Now, with number four on the way and the single income life seeming to last longer – I can’t believe how much we money and time we had. But I still wouldn’t trade it; I just wished we had saved up more in the beginning. Live and learn.

  28. Why would I say something to them? You did your job, they weren’t interested, so it’s time for the rest of us, who do understand, to have a good laugh about that. They too will learn…when they hit rock bottom, or when exactly did you learn?

  29. I’m 28, and I was these people just a year ago. You know you should save money; you know you should pay down your debt; you know you should cut frivolous expenses, but you get by just fine doing what you’re doing. While I was growing up, my parents never taught me about money planning, it was never something I had to think about. Then a year ago my then fiance lost his job, and all of a sudden being in debt, having no savings to speak of, not watching what we spent was no longer acceptable. While it’s been tough not being able to do what all our friends are doing and not being able to buy new clothes all the time, etc. But in the long run (as strange as it sounds) I’m glad we were put in this position. It has forced us to be excited about savings and money planning, and hopefully it’s putting us in a better position for the long term. We’ve learned our lesson, and it’s one we’ll keep forever and pass on to our children.

    I think it’s more society than just these people’s age. Money management isn’t a priority for many people these days, as it was for previous generations. I think many of us are learning the error of our ways due to the state of the economy lately. Not always a bad thing…