Once or twice a year, my wife and I spend a Saturday combing the local thrift stores looking for bargains. Kris is mainly after clothes. I target books — especially personal-finance books. On one recent trip, I picked up a two-dollar copy of How to Get Out of Debt, Stay Out of Debt, and Live Prosperously, a 1988 book from Jerrrold Mundis.

How to Get Out of Debt is built on the principles of Debtors Anonymous, a twelve-step program founded in 1971 to help those who struggle with compulsive debt. Mundis was himself a debtor, and he based this book on his own experience. This isn’t purely theoretical information from the mind of some Wall Street finance whiz who has never struggled; this book contains real tips and real stories from real people.

The debt spiral
The first part of How to Get Out of Debt is descriptive. It catalogs the different types of debts and the different types of debtors. Mundis differentiates between compulsive debtors (those who debt early and often), problem debtors (those who debt repeatedly, but not compulsively), and “reasonable” debtors (those who debt only occasionally and with a plan).

Mundis notes that many compulsive debtors and problem debtors often make excuses for their choices. They treat debt as if it were unavoidable. But he makes it clear: yours is not a special case. He writes:

You got into debt largely as a result of…distorted attitudes and perceptions, which led to destructive behavior patterns. [...] Simple recognition — seeing them for what they are — is a big part of freeing yourself. They have no more real substance than shadows on a dark night; when you shine the light of conscious awareness on them, you begin to neutralize them. The rest of the job is to replace them with healthy and realistic visions.

This may seem like strange stuff to read in a personal-finance book, but I think that’s one reason How to Get Out of Debt is so effective. It doesn’t focus on facts and figures; it focuses on behavior. I believe that money is more about mind than it is about math, and Mundis seems to agree.

Escaping the debt spiral
The second part of the book describes how to stop the debt spiral, how to stabilize your life. According to Mundis, the key is: Don’t take on any new debt. Not for any reason. You can not get out of debt by borrowing more money, Mundis says, so just for today — just this one day — do not incur any new debt.

Again Mundis notes that those who struggle with debt often make excuses. “But I have to take on more debt because…” He urges readers to discard this sort of thinking. He recommends repeating the following mantra every morning:

Countless others have already freed themselves from debt. I am just the same as them. I can do it too. I am doing it. I am doing it now.

I realize that some of you probably consider affirmations lame. But there’s real power to this. Mundis draws on the research into cognitive-behavioral therapy to help readers build positive mental patterns.

But this book isn’t all about mind games. It’s filled with plenty of practical points, as well. Though Mundis pre-dates Dave Ramsey by 15 years, he offers similar advice for tackling debt. His plan includes the following actions:

  • Stop debting. From this day forward, do not take on any new debt for any reason.
  • Track spending. Mundis advocates tracking every penny you spend and then using this information to draft a monthly spending plan.
  • Destroy your credit cards. “A credit card is a hand grenade,” Mundis writes. “It is instant debt.” Like me, he believes that those who struggle with debt should not carry credit cards. Yes, they can be used responsibly, but if you’re not one of those who can exercise self-control, you’re better off without them.
  • Eliminate your debts. Using a debt snowball-like method, the author encourages readers to slowly tackle their debt, even if they’re only able to repay a little every month.
  • Build a contingency fund. As your debt decreases and you build “margin”, establish a contingency fund. This is just like Dave Ramsey’s emergency fund, and is there to protect you from future problems.

The first part of the book describes debt and the second part offers practical tips. The third part is conceptual. It is here that Mundis discusses debting behavior more fully. The author’s message is simple and powerful: You cannot create results without taking action. It’s action that brings results, not wishing. But not every action will bring the results you desire. It’s important to remember that every action is a success, no matter the outcome.

Freedom, prosperity, and abundance
The final section of the book provides actual techniques for defeating debt. There’s a lot of meat here. And through it all, Mundis stresses the importance of balance.

“Debt repayment is not made at the expense of the quality of your own life,” he writes. “You are committed to repaying each creditor in full, but you come first; they come second.” This isn’t a license to spend like crazy. It’s merely permission to treat yourself as a human being.

Mundis suggests that you start small, especially if you’re struggling. Give each creditor a portion of the total you can afford to pay. If you can only pay $50 a month, then divide that $50 among the people you own in proportion to how much you owe them. He also warns readers not to be discouraged. Though debt repayment can seem daunting at the start, it will not take forever.

It only seems that way. Payments nearly always start small. They increase as time passes. The process builds on itself; in the end, repayment is often rapid and dramatic.

This was certainly true in my own life. I set out to get out of debt in five years, but I was finished in just over three. Many GRS readers report similar results. The most important thing is to get started.

How to Get Out of Debt, Stay Out of Debt, and Live Prosperously attempts to go beyond pat advice to get to the heart of why we spend and why we accumulate debt. Mundis wants to get behind the math, to force you to examine your attitudes, beliefs, and ideas. I think his approach is spot-on. I wish I’d read this book years ago.

If you’ve tried Dave Ramsey without success, read this. Even if you’re still on Ramsey’s “baby steps”, How to Get Out of Debt is worth reading. It’s 20 years old, but the information is timeless, and most public libraries should have a copy. (Or maybe you can find it for two bucks at a local thrift store!)

For another look at this book, check out the review at It’s Your Money! Update: The author stopped by to leave a comment!

This article is about Basics, Books, Debt