5 Debt Lessons from Titanic

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In 1997, Titanic was a runaway smash hit that was nominated for 14 Academy Awards and won 11. The fictionalized account of a few characters on the doomed Titanic ship sent people in droves to the theater.

5 Tips on Getting Out of Debt

While the movie contains both a fictionalized romance and a non-fiction tragedy, it also has important lessons that we can apply to debt.

1. Debt may feel at first like a helping hand that saves you from a difficult situation.

The protagonist of the movie, Rose, is engaged to a wealthy man named Cal, in part to help her parents’ desperate financial situation. While she doesn’t initially mind the engagement, as she gets to know Cal better, she realizes she detests him.

If you’re facing a difficult financial situation thanks to job loss, unexpected medical events, or other issues, you may take on debt as a necessary evil to help you through this difficult time.

However, after Rose is saved, she is still obligated to marry Cal. Her situation is still dire.

Likewise, debt may offer you a temporary crutch to help you stay afloat financially, but ultimately, you’re still responsible for paying the debt back. Borrowing the money just pushes your financial hardship into the future – plus adds interest.

2. A life riddled with debt is not sustainable.

The Titanic was doomed as soon as it hit the iceberg. It simply couldn’t stay afloat with such a big tear and so much water rushing in.

Likewise, relying on debt to float you along is unsustainable. If you can’t get by on what you make, you’ll have to make some changes, hopefully sooner rather than later.

Can you move to a cheaper place? Get a new job that pays better? Cut your expenses?

Just like the Titanic, taking on water in the form of an ever growing debt load is not sustainable.

If your financial hole is big enough it could be that you’re stuck in an unrecoverable downward spiral.

This can be the case for someone who is suddenly burdened with extreme amounts of debt due to a medical condition.

While bankruptcy isn’t the right answer for everyone it makes sense to research all your options and the potential implications.

3. Have enough life boats.

One of the critical mistakes that was made on the maiden voyage of the Titanic was not bringing along enough life boats.

There was almost a feeling that the ship was invincible, that taking precautions in case the ship sank was a silly thing to even consider. Sadly, we all know the consequences of that poor decision.

Even if you feel pretty secure in your current financial situation it makes sense to plan for unpleasant disaster.

Having an emergency fund to help you get past your own personal iceberg can help you tread water financially until situation turns around.

Even if you aren’t able to build up a big savings fund, simply having a plan for what you’d do if you lost your job or were injured and unable to earn income can help you stay calm in the face of disaster.

4. Use the buddy system.

While the Titanic is sinking panic sets in and the formerly “dignified” passengers quickly turn the race for survival into every person for themselves.

At this point Rose and Jack have an advantage, they have each others back. They’re looking out for each other in a time of crisis, using their collective instincts to stay alive as long as possible.

When you’re in a financial crisis, having someone you can turn to for advice and assistance can help keep you from making bad decisions.

It’s important to build those relationships before you run into a problem so you feel comfortable coming to them with your troubles (and so they’re willing to listen). This could be a friend, church member, or family member – someone you feel you can trust and that you’d be willing to help as well.

5. Sacrifice may be required.

After the ship sinks Jack saves Rose by getting her on top of a piece of floating debris, so she’s out of the icy water.

They could have both floated on top of the debris and let their legs dangle in the water. However, the frigid water would probably have claimed both of their lives before the rescue ship arrived.

You don’t have to sacrifice your life like Jack did in the movie but there will be things you’ll have to do without in your journey to pay down your debt.

As much as you hate it, you’ll have to let some things go so you can free up cash to pay down the money you borrow.

Everyone Could Use a (Debt) Hero

Although the sinking Titanic brought out the worst in some of the people on board it also led to acts of heroism.

One cool thing about a hero is that they set an example for everyone around them, they inspire others to do the same.

That’s one of the reasons that we named our new book ‘Get Out of Debt Like the Debt Heroes‘.

The 21 personal finance bloggers and authors profiled in the book serve as examples for getting out of debt.

Together they paid off over $1.7 million of debt, in a variety of different ways, and now they’re sharing their story in their book or on their website.

Ben Edwards founded the personal finance blog Money Smart Life in 2006 to share money tips for a better life – now he’s also the co-author of the Debt Heroes book.

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9 comments comments closed

  1. JP Morgan owned the shipping line and survived, because he wasn’t on the ship. Moral: the smart money is in owning the ship, not using it (put money in investing, not consumption).

    • I appreciate the sound advice on investing your money wisely instead of just consuming it. Making small sacrificing now can help to build net worth faster.

  2. Great post Elle, very creative! The title caught my interest . . . I like the analogy, it works well. After my contentious divorce (married 26 years) I suffered huge financial loss. I made the assumption that whatever I put in was mine but we were a ‘team’ and together were invisible. I lost nearly all of my investment into retirement because of my passive attitude. That was 10 years ago and I’m still in dire straights. Loss can take a strangle hold if one is not conscious of it’s grip. I would recommend every woman, regardless of marital status, have her own retirement account separate from her husbands.

    • Excellent advice! I know it must be tough. My parents divorced after 26 years, it wasn’t easy to go through with them.

      • Actually Elle, going through the process, although financially devastating, taught me more about myself and to pay attention to my highest values rather than hanging on to old dreams. I’m in the process of financial recovery and it’s going painfully slow so far, but grateful I ‘got’ the lesson.

        • I’m very grateful that you’ve shared this experience and how you handle it, not as an obstacle, but an opportunity to learn and make changes. Thank you so much for being a part of this community!

  3. Hi Elle, this is a great post with a very intriguing title. I agree with beachmama the analogy works well. Moral lesson of the story: entering into a debt requires safety lifeboats that can save us once disaster strikes. If we prepare enough, sacrifice may not be necessary.