Want to Reduce Your Debt? Think Like a Cocaine Addict!

Focus on Cocaine and Crack

…and debt too!

“Cocaine is like really evil coffee.”
–Courtney Love

The steps of getting out of debt are pretty simple. Budget. Spend less than you earn. Put the difference towards debt. Rationally, it’s not particularly difficult to envision the path to getting out of debt. However, like losing weight (take in fewer calories than you expend) or stopping smoking (don’t light up), just knowing what to do often isn’t good enough to get you to engage in the proper behaviors to be successful. If it were as simple as taking what we know we should do and doing it, then nobody would be overweight, nobody would smoke (by the way, if you smoke, you are killing yourself and you stink), and nobody would be in debt.

But…it’s not that easy. If all we ever did was act rationally, then we’d be set. We don’t. There’s another player in the game sitting inside our heads – Monkey Brain. Monkey Brain doesn’t like planning for the future and he hates sacrificing pleasure now. Monkey Brain was the one who caused you to get into debt in the first place! After all, you knew that you were spending more than you earned, but Monkey Brain was there, the devil on your shoulder, telling you all sorts of little white (or black) lies. Come to think of it, is there such a thing as a black lie?

  • You’ll make more in the future, so you can pay off this debt. Monkey Brain loves to assume anything which will make the present decision look palatable, so he tells you that you’ll get raises and promotions and a massive income in the future, so you’ll have plenty of money to pay off the debt. However, as workers since 1970 can attest, real wages – how much you can buy with the money you make, e.g., inflation-adjusted – have remained stagnant, so the money that was supposed to be created by raises and promotions has been eaten up by inflation. That’s for the people who kept their jobs!
  • It’s only $X per month. This is also the same argument that used car salesmen like to use on you. They’re appealing directly to Monkey Brain. Instead of a large number (“That 183” flat screen TV costs how much?!?”), by reframing the price into monthly payments, Monkey Brain softens the perceived blow of the cost. He also doesn’t calculate that the overall total cost of whatever it is that you purchased skyrocketed. He’s just thinking about how to squeeze more room for toys into the budget.
  • You have to have it now; you need it! This one causes you to go down all sorts of paths that you really don’t want to go down. First, Monkey Brain often confuses wants and needs. You need food, shelter, clothing, and reasonable transportation. Monkey Brain will tell you that you need the man cave. The other negative effect is that by telling you that you need something, Monkey Brain creates a sense of immediacy. Instead of saving up and budgeting for purchasing the item when you can pay cash, Monkey Brain tells you that you have no other choice but to whip out the credit card. You can pay it off later anyway, right?

If you’re in debt, then some or all of these probably resonate with you. Great, we’ve identified how we got into this situation, but we’re no closer to identifying how to get out of it. We didn’t get into debt in one day (usually), and we’re not going to get out of debt, either.

Applying brute force (“NO, MONKEY BRAIN! BAD MONKEY BRAIN!”) to the problem usually doesn’t work. It’s the equivalent of trying a starvation diet to lose weight. You might lose a few pounds, but then you’ll get frustrated and go on a binge, and suddenly, you’re twenty pounds heavier than you were when you started in the first place. One step forward yields two steps backwards.

Instead, you have to coopt Monkey Brain into working with you.

This is where the cocaine comes into play, a topic I initially explored in “Credit Card Debt and Drug Addiction: Are They Related?”

No, I’m not telling you to cut out a line on the mirror and start snorting.

What I’m going to share with you is how you can engage the same part of the brain that gets pleasure from cocaine to encourage yourself to pay off debt.

How to Kill Debt Like a Cocaine User

That headline makes you feel a little uncomfortable, doesn’t it?

Keep reading. It’ll make sense in a minute.


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Researchers from Harvard documented how giving causes certain parts of the brain to fire and give the giver pleasure. When you donate money to a charity, you engage a part of the brain called the ventral striatum. The ventral striatum is the rewards center in the brain. Do something that you like, and the ventral striatum fires away, giving you pleasure. This is the same part of the brain which responds to art and attractive faces. It is also the part of the brain that sends out signals when someone uses cocaine. It’s why cocaine is so addictive and unpredictable.

Furthermore, the researchers showed that the more you give, the more pleasure you get. This isn’t like buying a lottery ticket, where the happiness that you get from buying a bunch of lottery tickets is the same as the happiness you get from buying just one lottery ticket. No, it’s cumulative. The more you give, the more Monkey Brain likes it, and the more Monkey Brain wants you to give. It’s a virtuous cycle.

While it would be mere speculation, I imagine that there might be some link between success in paying off debt and people who continue to tithe 10%.

But, back to the problem at hand. You have debt. You want to pay off the debt. You don’t have money to give because you’re in debt.

Here’s what I recommend.

Set milestones for paying off your debt. I generally think that dividing your debt by 5 or 10 is a good place to start. So, if you have $10,000 in debt, then you will set milestones every $2,000. Once you reach a milestone, give to your favorite charity. Make it small to start, say, $25, but then ramp it up for each milestone. Once you’ve paid off $2,000 in debt in this example, you make a $25 donation. When you’ve paid off $4,000 in debt, you make a $50 donation, and so on. It’s important not to give so much that you derail your debt destruction efforts!

However, you can’t just write a check and mail it off to your favorite charity. You have to give it in person. Research from the University of Wisconsin’s Constance Flanagan and the University of Pittsburgh’s Matthew Bundick show that there are psychological and social benefits to giving in person which increase your overall well-being. It’s like you’re getting to double dip into the pool of goodness by both giving and by giving in person. It’s a BOGO for Monkey Brain!

I don’t intend to get into the moral discussion about donating to charity; however, if the psychological rewards of giving are strong enough, then they can be tied to goals that you have, such as paying off your debt. Pretty soon, you might discover that you like the habit and you’ll encourage yourself to earn more, invest more, and spend more wisely so that you have more money to give.

You’ll be a giving addict. And you won’t have the munchies.

Have you noticed a virtuous cycle of giving in your life? Am I full of bull? Tell us what you think in the comments below!

About Jason Hull, CFP®

Jason Hull, CFP®, is the Chief Technology officer of myFinancialAnswers, an online comprehensive financial planning service.