Debt Guilt: Why Shame Keeps You Broke

Episode Introduction

Steve Rhode: Hey, you’re back with The Get Out of Debt Guy Show, it’s me, Steve. The original Get Out of Debt Guy, and today we’re diving into one of the most powerful forces that keeps people stuck in debt: guilt.

Not the helpful kind that nudges you to make better choices—not talking about that. I’m talking about the toxic kind, the shame that whispers you’re a failure. It tells you not to ask for help, it convinces you that the hole you’re in is your own damn fault. So you better dig your way out alone.

But here’s the thing. Guilt doesn’t just sit quietly in the background—it pushes people into worse decisions. They drain their retirement, make minimum payments, take on another loan to hide the last one, and they say “yes” when they should say “I need help.” That kind of guilt keeps people broke, isolated, and stuck in survival mode. And it’s time we talked about it.

Say hello, Damon.

Damon Day: Hello, Damon.

Steve Rhode: As always, joining me to unpack all of this is The New Get Out of Debt Guy, Damon Day. And you can reach Damon through his website at DamonDay.com. And if you are at all feeling guilty about your debt, or guilty about how to deal with it, reach out to Damon. If you’ve listened to any of our past podcasts, you know that he’s an incredible resource.

Following Up on the Morality Episode

Steve Rhode: Damon, today we’re going to talk about debt, but last time we talked about the morality of being in debt, and that really woke some people up, didn’t it?

Damon Day: It did. Yeah, I actually got quite a few phone calls after that podcast. You know, it’s funny because debt—the guilt of debt—

[Package delivery interruption]

Steve Rhode: You and I are both juggling every outside force we can right now.

Damon Day: Well, at the beginning, I was going to apologize to the listeners because today I am in the mobile office, and there’s going to be some potential RV door slamming, dogs barking, kids complaining, cars driving by. But I’m in the mail room with Amazon stopping by.

My family is currently on what I’m calling the 2025 Summer to Remember. We’re on basically a baseball tournament tour to the East Coast. My son’s got a couple of tournaments out there this summer. So we’re going to be on the road for about a month and a half, two months. And we are currently in the Rocky Mountains in Colorado. My boys are fly fishing, and I am in the RV with the mobile office.

The “So What” Approach

Steve Rhode: So, you know, over the years, over the decades, I’ve run into lots of people that have felt guilty about their debt. Like it’s their fault, it’s their shame, it’s their burden. And I’m not going to mention the dude’s name again, but there are popular personal finance gurus out there that want to blame you. “Suck it up, you did it, you dig your way out”—that type of stuff.

But the example that I always use is: you’re a farmer. You go out and you’ve bought equipment, you have maintenance costs, costs for the farm. You buy the seed, you plant the seed, you do all of that, and then it doesn’t rain. Are you a failure? Should you feel guilty about that? Or does sometimes crap just happen?

Damon Day: Yeah. And there are times where it’s not an act of God—sometimes you just make a mistake. You make some bad choices.

I coach my daughter’s softball team—and don’t worry, I will tie this together. I’ve got a saying on the softball team and we use it a lot. It’s hard to drum it through 12, 13, 14-year-old girls’ heads, but that saying is: “So what?”

In fact, it’s on the back of several of my coaching shirts: “So What?” And we say that whenever they make an error. They make a mistake—hey, so what? Flush it, forget about it. It doesn’t matter. There’s nothing you can do about it.

But if you feel guilty about it, if you dwell on it, if you mope about it, what are you going to do? You’re going to mess up again. You’re going to stay in this situation where you’re not playing very well, you’re not making good decisions, and you’re going to let your team down.

So as hard as it can feel to do, as bad as you feel—so what? You have to just flush it and do better moving forward, for your sake and the sake of your family.

No Sense Wasting a Perfectly Good Mistake

Steve Rhode: There’s another adage I’ve said for years: there’s no sense wasting a perfectly good mistake. The best thing you can do is get some value out of learning from it.

I agree with Damon. We all make mistakes. If you screwed up and made a mistake, it’s not a cross you need to bear. It’s not something you need to carry around the rest of your life and beat yourself up over. You need to learn from it and move forward doing better.

Because you being lost, alone, afraid, confused, and not willing to ask for help—the only person you’re punishing is yourself. And you have other people in your life, whether it’s family and friends or children, that are counting on you to find a way forward.

When Guilt Makes Problems Bigger

Damon Day: I have clients that have issues with gambling, issues with spending in general. Everybody’s got different things that go on, and they’ve spent years with the guilt and the shame and “I got to fix it, I don’t want to tell anybody, I don’t want anyone to find out.”

In most cases, all that had done was make the problem bigger and make it worse. And then when they reached out and got some help, it’s like, “Hey, we acknowledge it. Now we can identify what got us there and we can take some steps to correct that.”

There are some things you can do depending on what the issue is—outside help like Gamblers Anonymous and things like that. But there’s nothing that’s so big that we can’t fix it. The first step is identifying what’s going on and changing some patterns and behaviors.

The High Cost of Everything

Damon Day: A lot of my clients don’t have a gambling addiction or a spending problem. It’s just—stuff is so darn expensive in the last couple of years. They kind of got into survival mode. This stuff went on the cards just trying to survive.

Everywhere they turn—I just got an alert on my phone. My son said he needed a couple of flies and some line for fly fishing, and they had to get fishing licenses. I just got an alert: a hundred dollars. My two kids, there’s a river right here, they wanted to go fishing and had to get fishing licenses. Those are 20 bucks each, you need a couple of flies and some line, and boom—a hundred dollars like it was nothing.

Steve Rhode: That’s like going through the Starbucks drive-through for your family.

Damon Day: Well, that was 40 because that was right before that. You see my point. Everything is just so damn expensive that a lot of people got caught off guard. When they look at what their life was like in 2018, and then look at what their life is like now—my lifestyle hasn’t really changed very much. I’m making about the same money, maybe a little bit more, driving the same or similar car, living in the same house. We’re going out to eat even less, and I have less money to spend and more debt than I had in 2018 and 2019.

The Shopping Addiction Story

Steve Rhode: Let’s see if this story applies. I had a client once who was, I’m doing air quotes, “addicted to shopping.” That was her release. She had one particular store she liked to go to—Victoria’s Secret.

She met with me each week and she would come in saying, “I was just feeling so stressed and bad about my debt. I couldn’t help myself. I went shopping and I bought stuff and now I feel guilty about returning it.”

I said, “You got the stuff in the car?” “Yeah.” “Let’s go to the mall.”

So we went to the mall and she says, “I feel so embarrassed and guilty about returning this.” And I said, “They’re not going to care. I’m going to go with you. I’m going to show you how easy this is.” And that was the beginning of her ability to return things.

Sometimes you just need to break through how you think other people are going to feel. Because if you think you need to feel guilty because of your creditors or a debt collector or somebody else, that is BS. They don’t care about you. The only reason they care about you is to manipulate you. The people you really need to take care of are the people who count on you and who love you.

Strip the Emotion from Financial Decisions

Damon Day: I know it’s easy to say because that’s taking the emotion out of it. But at the end of the day, that’s what you have to do. We have to strip the emotion out of the financial decisions.

We can discuss the emotion—the reasons why we got to where we’re at and what we can do to get out and how we feel about that. Of course that’s going to play a role. But at the end of the day, you got to make a decision that’s not wrapped up in the emotion.

Steve Rhode: Do you ever watch that series Ted Lasso?

Damon Day: No, I did not.

Steve Rhode: Very popular top-rated show over the past couple of years. He’s an American coach for an English soccer team. And when his team loses a game, he always has a saying: “Be the goldfish.” Goldfish have a 10-second memory—be the goldfish. Just like you’re saying, it doesn’t do any good to linger on it. Let’s do better.

We’ve Been Through It Ourselves

Steve Rhode: If you are struggling with a debt situation you’ve been carrying around, you don’t know what to do, you’re lost, alone, embarrassed, ashamed—reach out to Damon. He’s not going to judge you. I don’t judge you. The thing I find that overcomes guilt is truth and facts. Because once you understand what reality is, rather than assumptions and fear and embarrassment, you will come to completely different conclusions about what to do.

Damon Day: And for those of you that are new to our podcast, maybe you haven’t heard us before, don’t know who we are—Steve and I have both been through the ringer ourselves. So when he talks about “we’re not going to be judging you”—as bad as you think your situation is, try us. I bet you we can one-up you.

There’s no judgment here. We both went through bankruptcy and settlements and we’ve done it all over the years. How do you think we got so smart about how to deal with all this stuff? We have firsthand knowledge about how to deal with all of this stuff.

Steve’s Lowest Moment

Steve Rhode: I think one of my lowest moments was—I was so broke that I had to move, take my three-year-old daughter and my wife and move back into my parents’ house at 32 or something. I couldn’t afford the car that I had. So the only thing I could afford was a $500 used postal jeep, the kind that used to have the sliding doors.

The doors didn’t close all the way. It was wintertime and cold as hell. The only thing we could afford was to go out on a Friday night to a local pizza place. For like $5.50 we could buy a small pizza and put a quarter in the jukebox to have our little daughter dance to Aretha Franklin’s “Respect” because that was her favorite song.

I felt like a total loser. And I felt guilty back then, and it took me a while to figure it out. That’s why Damon and I know what we’re doing now.

Damon’s Garage Office

Steve Rhode: I don’t know what Damon’s lowest moment was. But one of them that I experienced with him was when he was sitting in his hot-ass garage in California with an air conditioner blowing out the vent. So it was blowing on his feet or crotch or something. And in the garage where his office was, there was the dryer with the tennis shoes in it going boom, boom, boom, boom.

Damon Day: Yeah, because at that time, my office was in the garage because the only thing we could afford to rent down in Irvine was a little two-bedroom house. It was only 1,150 square feet and there was just not enough room or quiet to have my office in there because I had a baby and a toddler at the time.

So my best option was to set up a desk in the garage. Most of the time in Irvine, being 20 minutes from the ocean, it was fine. But it still does get warm in the summer and I was sweating in there. So I got one of those window air condition units from Home Depot, but there were no windows in the garage. So I had to set the unit up next to the vent and I jerry-rigged duct tape and cardboard around it.

We lost our house, gave the house back to the bank. It was a great 5,000-square-foot custom-built house. This was before the market tanked in 2008, but we ended up losing that when we owed $800,000 on a house that was worth 300 at the time. California, non-recourse state—here you go. They even gave me $2,000 to move out of it.

That was 15 years ago or so, maybe more. But you do what you got to do. You don’t think I felt embarrassed or ashamed having to sell my truck? Why can’t I put a roof over my kids’ heads? It sucked, but you do what you got to do.

Steve’s Post-Bankruptcy Guilt

Steve Rhode: Well, it’s like after my bankruptcy—we’ve talked about this a couple of times. After my bankruptcy, I felt so guilty about having discharged my debt that I tried to repay my creditors. “I want to repay you, I feel like I have an obligation.” And their response was, “Please don’t.” “We don’t know what to do with the money. Don’t send it in.”

Damon Day: After my bankruptcy, I didn’t feel guilty about it. I was at the point where I had been in this stuff long enough to know this was just the system. People not being able to pay back certain debts is built into it. It is what it is.

There’s no point wasting time feeling guilty. And here’s the other problem with guilt and emotion about debt: it robs you of time and ability to get creative on ways to dig yourself out. Because you’re spending your time worrying about the debt or juggling payments.

That guilt and shame and inability to come up with a strategy and plan to get rid of it is continually pulling you down. You’re spending time, effort, energy, brainpower trying to juggle that and feel bad about it, rather than saying, “You know what, I’m going to compartmentalize that. It is what it is. Now I’m going to do better moving forward.”

I know I had this problem. I did that. Whatever. Now here’s what I’m going to do moving forward to get out of it. You need to focus your energy and effort on positive things, not things that were in the past. What’s done is done. So what? Move forward. Don’t let your team down. Don’t make the mistake again. Keep your head in the game. Ball comes at you again, you’ll be ready for it.

Time Is the One Thing You Cannot Buy

Steve Rhode: I’ve seen people make so many mistakes, waste so much time. And time is the one thing that you cannot buy. You can spend money and get a great solution that takes care of your debt now. You can get good advice. You can rebuild and start your life right now. You can begin to start savings and building an emergency fund and protect your family and keep your family and kids safe.

If you piss away years through regret and guilt and morality, whatever it is, just assumptions and fear—that is the biggest tragedy in my book.

Depression and Debt

Steve Rhode: Can you think of somebody who came to you and felt incredibly guilty?

Damon Day: Most of my clients. There’s not that many that say “I got into this mess and I feel fine with it.” That doesn’t really happen because they’re living through it alone.

Steve Rhode: The story I’ve told before is the guy I met with—my client met with me for the first time and he stood up to give him a hug and he just fell into my arms sobbing and he said, “I owe $3,000 worth of debt and I can’t survive.” It’s tragic that people make those kinds of decisions because of how they feel emotionally.

The other consequence of guilt from debt is—it’s the chicken and the egg thing. Depression can be created by the guilt of debt. And depression causes you to feel isolated, lost, alone, afraid, confused, unable to make a plan, unable to carry out a plan—just emotionally broken and needing mental health assistance. And that just keeps people down for longer and longer.

So let’s get over the guilt. Let’s say today is the day that I’m going to start to move forward.

Flipping the Switch

Steve Rhode: When I first went to college, I don’t know exactly why, but when I would walk across campus and people would walk towards me, I wouldn’t make eye contact. I would look at the ground and avoid their gaze. Something with self-esteem, self-confidence, I don’t know what it was.

But it didn’t take long. I still remember the exact moment. I was walking across campus by the fountain in the center of campus and somebody was walking towards me and I just went, “Screw it. I’m not going to look down anymore.” And I said hello and waved, and from that point on, that’s exactly what I did.

I don’t know how that switch flipped and I wish I had something magic to say to people to flip that guilt switch about your debt. But the absolute best thing that you can do is get in touch with Damon and talk it through.

The Cambridge Story

Steve Rhode: Now as a follow-up to that, I want to tell you a short story about how that philosophy 30 years later saved me from getting my ass beaten.

We’re in England and we walk out of this restaurant in Cambridge, England. There’s two police officers standing there and it’s starting to get dark. They said, “That part of town which you’re heading towards can get a little dicey. So just be very, very careful.”

So we’re walking—my wife, my 14-year-old daughter at the time—and we’re walking down the street. Ahead between two old buildings, I see this guy and he’s hastily approaching this couple. It looks like he’s mugging them. And he turns out of the alley walking directly towards me, kind of leaning forward and glaring at me.

I’m thinking, “Oh, this isn’t going to turn out well.” But I do exactly what I always do. He approached me and I stuck out my hand and I said, “Hi, my name’s Steve.” And he said, “My name’s Simon.” And for the whole weekend, every time I’d see Simon walking down the street, I’d go, “Simon!” He’d go, “Steve!” And we became friends.

Whatever that switch was, it saved me later in my life. So talk to Damon, get that switch flipped for you, and let’s get some positive help, positive energy, and solve this problem. Don’t be the goldfish. So what? Let’s move on.

Damon Day: Ditto.

Closing

Got a money question keeping you up at night? Well, don’t just Google it. Get real answers from real people who actually know what they’re talking about. Go to GetOutOfDebt.org/podcast to ask your question—you might hear it on an upcoming episode. But hey, if you’d rather keep it private, Damon Day has your back. Visit DamonDay.com because getting out of debt is easier with the right help. That’s GetOutOfDebt.org/podcast where smart money questions lead to smarter money moves.