4 Kick-Ass Debt Lessons from the Karate Kid

Most of us have been bullied at one time or another as a kid. Perhaps you were called a name or harassed or even hit.

This near-universal experience may be one reason why the movie, “The Karate Kid” resonated with both adults and teens. The underdog story of Daniel, the new kid in town being bullied by local boys, is one everyone can relate to.

As an adult, you probably think those days of being bullied are behind you, but if you have debt and are facing creditors’ calls, you may feel like a kid being picked on all over again.

In “The Karate Kid,” Daniel eventually triumphs over the bullies, which is why the story can be an inspiration to anyone trying to fight his way out of debt. Here are four debt lessons we can all take away from the movie:

1. Debt can feel like its taunting and bullying you.

Daniel was constantly tormented by the neighborhood kids, and it was hard not to feel like they knew where he was at all times. He was always on guard because he never knew when they would show up.

Debt can feel the same way. Worrying about debt can keep you up at night. It can feel like your debt is hiding around every corner, just waiting to pop out and smack you in the face. When the car breaks down or you have a major medical problem, your debt is right in your face, reminding you that you can’t afford to fix your car or even pay for medical help.

When your credit score is dragged down by how much you owe, your debt jumps out and pounds its chest when future employers or your insurance company checks your credit report. Living in fear of your debt can be discouraging and depressing – which is why it’s important for you to decide, like Daniel did, that you’re going to take the necessary steps to prepare and stand up to it.

2. Sometimes you need to ask for a break while you get things together.

Mr. Miyagi reached an agreement with one of the bullies, Johnny’s martial arts teacher. Mr. Miyagi trained Daniel, and Johnny left Daniel alone. Two months later, the two fought in an official karate match.

Likewise, you may sometimes need a break from paying down your debt to get your finances in order. You can negotiate with your creditors for lower interest rates to free up money to pay down your debt and start an emergency fund. The companies that lent you money want you to pay it back. Many times, they’d rather work with you on figuring out to pay it back rather than have you just walk away from the debt.

There are companies and services that can help you buy some time with your debt but some are out to take advantage of you so cautious when you’re researching and comparing what they offer.

3. You can benefit from having a mentor.

Daniel would have never been able to fight Johnny in the ring if Mr. Miyagi had not been his mentor and taught him how to be a successful karate fighter.

Likewise, you may need help paying down your debt. You can find help in a variety of ways. Perhaps you start listening to debt shows on the radio such as Dave Ramsey and learning about his popular debt snowball method. Maybe you check out books from the library about paying down debt and becoming smart with your money. Maybe you ask a trusted friend or family member for guidance. In whatever ways feels comfortable to you, find someone who can help guide you out of your current financial situation.

I recently put out a book along with Jeff Rose called Get Out of Debt Like the Debt Heroes that profiles 21 different personal finance authors and bloggers that collectively paid down over $1.7 million in debt. The idea is you can read about the different ways they got into debt and how they got out — then connect with the people that have stories most like yours. Each “Debt Hero” shares their fatal flaw that was instrumental into putting them in debt — then follows it up with the “Super Power” they tapped to help them get out of debt.

4. Knocking out debt can leave you battered and bruised, but it will also earn you self-respect.

Daniel sustained painful injuries while fighting Johnny, but he never quit. In the end, he earned not only Johnny’s respect, but respect for himself.

Paying down debt is often a long, difficult journey. It can leave you emotionally drained and physically exhausted, especially if you’re working many extra hours to generate extra income. But in the end, if you pay off all your debt, you will be so proud of yourself and all you have accomplished. As I mentioned earlier, make sure you explore all the options available to you and their pros and cons when you’re figuring out the best way for you to get out from underneath what you owe.

“The Karate Kid” shows us the growth of Daniel from a timid, picked-on youngster to one filled with confidence. You, too, can experience a similar metamorphosis in your own financial life.

Ben Edwards blogs about personal finance at Money Smart Life and is a co-author of the Debt Heroes book.

Photo Credit: Columbia Pictures


  1. 2


    Great analogy. I love the mentor part. I gained huge knowledge in my career when I put my tail between my legs and found someone to help me who’d been there before me.

  2. 3


    I love the Karate Kid (have seen both versions); I also pass as a bit of an expert in paying off debt and fast ($157,000 in three years). So, I can say with confidence that the four points you have come up with rock! Most of all, people shouldn’t feel intimidated by debt and be ready to take a break if they need one.

  3. 4

    Len Penzo says

    Great post, Ben. Like Joe, I too love the mentor suggestion. Although I’ve always been naturally adverse to taking on excessive debt, I learned some terrific lessons on exactly why that’s so important early in my life as a young adult from my cousin Kevin.

    There are plenty of nuances in managing our personal finances that sometimes aren’t readily apparent without a mentor to point them out — even to the folks who do a good job of managing their money.

    I think the key to being a great personal finance manager, rather than simply a good or average one, depends on understanding those nuances.

  4. 5


    Every thousand mile journey starts with your first step. The important thing is to take that first step. If you keep procrastinating to start paying off your debt, it will keep growing to the point that you will knock at the the door of bankruptcy court. Even though it should be the last resort.

    Keep taking the poison out of your financial life. Most debts are just pure poison.

  5. 8


    I agree the most with having a mentor. It can be hard to find a mentor these days with so many people dealing with the loss of money and lack of financial literacy, but that is what I like about some personal finance blogs. They show what they have done and that is always inspiring.

  6. 10


    The one thing I do NOT have is a mentor. the more I think about it the more I realize how important that can be, someone that can give you advice when you need it and more importantly, slap you on the back of the head when you need that as well!

  7. 11


    Nice points. Debt can leave you running in place or playing catch up,so much so that you cannot live a good life. I would do everything to get rid of it from having a garage sale to taking a second job.

  8. 12

    Dona Collins says

    As a martial arts student (yup, for real), I find this analogy to be fantastic. All of the points are spot on. You do feel bullied, you do need help, and you do need a break – all things you can negotiate. Sometimes that bullying, when it comes to creditor phone calls, is in the literal sense, too. I wish I had a mentor through my most difficult financial times.

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