Move Over Maslow: Prudence Debtfree’s Hierarchy of Conditions for Debt Reduction

(Just so you know, that’s Maslow’s Hierarchy of Needs up there.)

DH = Dear Husband

Combination of factors that led to success in our journey out of debt

I often reflect upon the fact that it took me SO LONG to adopt the basics of financial wisdom. From chaotic-overdraft-mode in my young adult, single years to hands-off, head-in-the-sand, leave-it-to-the-man denial through most of my married life . . . It took a combination of powerful factors to get me going in the right direction, starting in June 2012:

  1. 6 years of DH’s under/unemployment had made us extremely stressed by our finances from 2003-2009.
  2. DH had launched a home business in 2009, and it was succeeding.
  3. Those financially stressed years had been very tough on our marriage, but we’d stuck it out, and we were feeling a new hope together – for more than just the new business.
  4. In May of 2012, we listened to Dave Ramsey’s CD book, The Total Money Makeover. DH and I shared an “Ah-ha” moment: We were weighed down by our debts, and we had to get rid of them. We were psyched, energized by a new sense of power. We could pay off ALL the debts!
  5. Again thanks to Ramsey, we were inspired by a vision of how life would be once we were debt-free.

(The bold words are building blocks for the hierarchy coming up.)

With all of those forces in play, we began our journey out of debt. 4 years and 3 months later:

  • we’ve paid off all consumer debts ($21,400)
  • we’ve paid off all business debt ($80,800)
  • we’ve paid off about a third of our June 2012 mortgage ($55,000)
  • we’ve saved a full emergency fund (to cover 3-6 months of expenses in the case of unemployment)

Next month, our mortgage will go below $100,000. Ramsey says it takes the average household 7 years to get completely out of debt following his plan (which includes significant savings as well as debt repayment), and we’re on track.

Maslow’s Hierarcy of Needs ǁ Prudence Debtfree’s Hierarchy of Conditions for Debt Reduction

At New Year’s of 2013, just six months into our journey out of debt, I wrote a post in which I outlined a hierarchy of conditions for debt reduction. I modeled it after Maslow’s Hierarchy of Needs. “According to Maslow,” I wrote, “a person would live a fulfilled life to the extent that all needs were taken care of, from survival needs to needs for self-actualization.” There is an order to Maslow’s hierarchy. Basic needs have to be fulfilled before higher order needs stand a chance. Here is a summary of what I came up with as I created Prudence Debtfree’s Hierarchy of Conditions for Debt Reduction and the way it compared to Maslow:

First Condition

  • Maslow:  Food, water, shelter, air. (To begin with, a fulfilled life means your survival needs are met.)
  • Prudence:  Pointed discomfort with personal debt. (Debt reduction requires you to have a distinct discomfort with your debt load.)
Second Condition
  • Maslow:  Safety, steady income, insurance in the case of misfortune. (To have a fulfilling life, your needs for security must be met.)
  • Prudence:  Stable, improving or innovative means of income. (To succeed at reducing you debt, it helps to have at least a steady amount of income. It helps even more to have an increasing amount of income.)
Third Condition
  • Maslow:  Belonging, love, family. (To experience fulfillment, you need the love of family or a closely-knit group of friends.)
  • Prudence:  Team support. (Your success in reducing debt is strongly linked to the support you get from your spouse/ family / friends .)
Fourth Condition
  • Maslow:  Self-worth, accomplishment. (Part of a fulfilled life is the self-respect that comes from achievement in something significant to you.)
  • Prudence:  Recognition of your own power. (You will succeed at reducing your debt when you believe you have the power to make it happen.)
Fifth Condition
  • Maslow:  Self-actualization. (A fulfilled life includes complete acceptance of yourself and the freedom to be creative.)
  • Prudence:  Inspiring vision of life after debt. (You will find it within yourself to reduce debt if you are inspired by a vision of a better life without debt.)
Stumbling blocks?
Laurie wrote earlier this week about the financial rut she has experienced, and the fact that it can be hard to sustain a long-term effort to get out of debt. When I consider the ruts I’ve fallen into since our journey out of debt began, I get new insight as I see them fitting in with this hierarchy concept.
  1. When I experience an indifferent “Meh” about our goal, it’s a case of losing sight of the vision.
  2. When I feel defeated by an endless stream of big expenses, it’s a case of powerlessness.
  3. When I get frustrated because DH and I are butting financial heads, it’s a case of hopeless isolation – no team support.
  4. When I’m overcome by dread after a month or two of slow business for DH, it’s a case of income insecurity.
  5. When I’m lulled into complacency, it’s a case of losing that essential discomfort with debt.

I find that the more clarity I have about my own thought processes and feelings, the more effectively I’m able to channel them in the most constructive direction. Maslow’s Hierarchy gives insight into what might need to be addressed for fulfillment in your life. I hope that Prudence’s Hierarchy offers insight into what might need to be addressed in your debt-payoff mission.


Do you agree with this hierarchy theory? If not, how would you change it up? Are you able to see your own financial stumbling blocks as being connected to one or more of the levels of this hierarchy? Your comments are welcome.


Image courtesy of en.wikipedia.org

20 comments on “Move Over Maslow: Prudence Debtfree’s Hierarchy of Conditions for Debt Reduction

  1. Wonderful, Ruth!!! I identified with so many of these!! I think it’s important too to have a written plan in place. Something concrete that one can look at and make a decision to stick with it, sort of like a contract.

    1. Writing out goals is widely supported as a way to increase the chances of reaching them. I’m not so good at that – but when it comes to debt repayment, I write about it every week : ) I’m glad that you could identify here, Laurie!

  2. Looking over your accomplishments it hard to see any stumbling blocks, amazing progress, but I know there have been some bumps. I like the theory. Team support has been key for us. When anyone of us have had the moments, its helpful to talk it out, figure out why are we having these feelings. It great to get outside of your own head for a bit and have support from others.

    1. Thank you, Brian. When you look at the overall accomplishments, it looks like it’s been a smooth ride. But there have certainly been ups and downs along the way. There is no doubt that some people have a steadier time of it than others – depending upon income, expenses, family events, the unexpected . . . I like what you have to say about getting “outside of your own head for a bit” to get support from others. Many people suffer in silence and shame when it comes to debt. So glad you have your team of support : )

  3. I have heard about Maslow but that’s about it. I enjoyed reading about that and how you (or anybody else) can apply it to their real life. It’s similar to a leadership concept I learned in college (Forming, Norming, Storming, Performing) it might be the same class I heard about Maslow.

    Essentially it’s chaos at first because you need to address your basic needs and it takes time to balance that before reaching the performing stage (Maslow’s self-actualization).

    1. I can say that my finances were “chaos” at first too. No “balance” at all. I find there are links between just about everything and personal finances – debt-reduction in particular. I wonder if you would be able to take the “Forming, Norming, Storming, Performing” model and rework it for personal finances?

  4. So, so proud of you my friend! You have made so much monetary progress towards your goals and it is very inspiring to me!

    You are right about big expenses leading to a feeling of powerlessness. Sometimes it is hard to *not* feel frustrated. But we keep pushing on!

    1. Thank you, Mackenzie! Big expenses – especially unexpected ones – can be SO discouraging! Try to see it as a blip on the big screen of overall progress. I’m glad you’re inspired. And even more glad that you “keep pushing on” : )

  5. I always keep Maslow’s hierarchy in the back of my head when looking at where people are at in life and what they must be dealing with (it could be my social work background at play here).

    That said, I can totally relate to the Prudence Hierarchy! I really like “Recognition of your own power. (You will succeed at reducing your debt when you believe you have the power to make it happen.)” A person can have all the right things in place – desire, income, support – and never make it happen because they don’t actually believe they can do it. I think belief is a huge player for successful debt reduction!

    1. Sometimes people can seem to have everything in place, but there’s a relationship or cultural dynamic in place that handcuffs them when it comes to their finances – and people from the outside can’t see it. Some people have to overcome a whole lot to claim the power that’s there for them. As a social worker (cool to find that out!), I’m sure you saw this kind of dilemma play out in a few scenarios.

  6. I love the parallels you’ve drawn here in building your own hierarchy for debt reduction. I think it applies even beyond debt payoff to big goals like saving for retirement. I definitely lose motivation if I feel powerless, unsupported, or complacent. It certainly helps to identify the source of those feelings and thoughts, so thanks for the post.

    1. I’m glad to know this hierarchy applies to more than debt-reduction! Maybe I should rename it? Hierarchy of Financial Fitness? of F.I.R.E.? of Financial Freedom? Here’s to your power, support, and motivation as you move towards your big goals, Kalie!

  7. “I find that the more clarity I have about my own thought processes and feelings, the more effectively I’m able to channel them in the most constructive direction.” I think there is a lot of power in being “self aware.” It’s something I’m always working on improving. The more self aware you are, the better you can control your emotions, reactions, and how you respond to things.

    1. Amen to that, DC! I spent many years in denial about many things – including my own thoughts and my own emotions. Self awareness truly is huge for all aspects of life – including personal finances.

  8. I love your take on this!

    I have almost come the other way: been very debt averse and now as a homeowner learning to be more comfortable with it. Debt cannot stop me living my life and shouldn’t be a source of misery or depression.

    1. Unfortunately, debt is a source of misery and depression for far too many people. It sounds like your debt – a mortgage – is something you’ve put thought into. If it’s not an out-of-control amount, in no way should it make you miserable. When we originally got our mortgage for our current home, we maxed out, and we had other debts too. My husband lost his job a year later – when I was pregnant with our 3rd child. What followed were several stressed out years – and they would have been much less stressed if we had not been maxed out. I think your old debt aversion is a good thing to hold onto. A mortgage is an exception, I think – especially if it’s one that you can pay off in 15 years.

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