Having debt can take an emotional and even physical toll on you. Dealing with debt can cause you anxiety and stress, which can lead to poor sleep, panic attacks and other physical symptoms. When you are dealing with these effects of debt, it can feel overwhelming. But just like you need to make a plan to tackle your debt, you should also make a plan to deal with your debt-related stress.
To help you overcome your debt stress, I spoke with financial pros and mental health experts to get their best advice. Here are their top tips.
Face Your Debt Head-On
“Money is emotional and our finances are personal,” said Andrea Ferrero, executive director at Pockets Change. “The first step to caring for ourselves and our finances is to be real with ourselves. Hiding out from debt decisions just lets the stress and the amount owed grow.”
Doug Milnes, CFA at MoneyGeek, added, “With debt, if we start to ignore the issue, it often makes things worse. We fall farther behind faster, incur more penalties and put ourselves in a spiral of increasing stress. Meanwhile, our imaginations conjure up the worst-case scenarios leading to further stress and potentially more paralysis.”
Get Started: Make a Debt-Free Future Your Reality
Money expert and author Nicole Lapin recommends taking a Stoic approach to dealing with debt stress.
“Ancient stoicism philosophy suggests that we suffer more in imagination than in reality,” she said. “I believe the same thing rings true today with money stress. Yes, debt is real. Financial trouble is real. But how real is it? Look at the numbers. Open up the mail. Check your balances. Tally it all up. Calculate how much you’ll need. Sometimes the biggest fears and stressors come from the unknowns. Once you can get over that hurdle, I bet that it’s not as bad as you imagined it to be. Remember: the only financial problems we can’t fix are the ones we don’t admit we have.”
Steve Gickling, founder of ETLrobot, agrees.
“In my experience, debt looms larger in everyone’s mind than it really is,” he said. “Whenever the unknown — or maybe more accurately the not fully known — is allowed to weigh on a person’s mind, it can breed a spirit of feeling defeated.”
Come Up With an Action Plan
Once you have a clear picture of your debt, “have empathy with [yourself], build a savings habit and take action on paying down debt,” Ferrero said.
Paying down debt will mean having to be disciplined about your budget.
“Make a plan for your money, aka a budget,” said Bobbi Rebell, CFP, personal finance expert at Tally. “Get intentional and start telling your money where to go. List out your monthly income along with all of your monthly expenses. Set aside part of each paycheck to cover your living expenses in order of importance. It should look something like this: rent, food, insurance, cell phone and Wi-Fi service, etc.”
Once you’ve covered your essential expenses, set a line in your budget for debt repayment — and stick to this number that you set. If you have an aggressive debt repayment goal, this might take some creativity. Deacon Hayes, founder of Well Kept Wallet, shared how he met his goal of paying off $52,000 of debt in 18 months.
“I knew that in order to get out of debt, I needed to not only decrease my expenses but increase my income as well,” he said. “If I wanted to be out of debt in 18 months, I would need to come up with an additional $2,900 per month, which didn’t seem realistic. I then realized I had a car that was $17,000 of the debt. I decided to sell the car, which substantially reduced my debt and gave me more money each month to put towards debt since I no longer had a car payment. I also worked a job on the nights and weekends delivering pizzas. Once I had a clear goal, the ‘how’ became clear and the stress diminished. I no longer let stress keep me from pursuing my financial goals, but felt empowered and motivated to keep at it, day in and day out.”
As for how to prioritize your debts, author, financial expert and host of “The Rachel Cruze Show” Rachel Cruze recommends starting with the smallest one.
“Use the debt snowball method to begin paying off your debt,” she said. “Start by paying off the smallest bill, regardless of interest, and work your way up to the largest one.”
Even if it takes you some time to pay your debt down, having a plan to do so can help ease your worries.
“While it takes time to alleviate debt, creating concrete steps towards a solution can be deeply reassuring,” said Dr. Michele Kambolis, mind-body health specialist, registered therapist, meditation teacher and author of “When Women Rise: Everyday Practices to Strengthen Your Mind, Body, and Soul.” “When you find yourself mired in anxious thoughts, pause, take a deep breath and remind yourself that you have a plan forward.”
Start With Small Goals
Once you have a plan in place, look at your spending and saving on a day-by-day, case-by-case basis so that you don’t feel overwhelmed.
“Set small goals and work your way up instead of trying to tackle it all at once, which could overwhelm you and make the stress worse,” said Braxton Yoeman, business consultant at Success Financial Team.
Bring Mindfulness Into Your Financial Actions
“Try going through your expenses one at a time and breathe slowly and deeply as you look at what you need to purchase versus what you want to purchase,” said Desi Bartlett, MS CPT-ERYT, creator of Desi Bodymind. “Make one financial decision at a time and stay present in your body as you do. Notice if a purchase makes you feel an instant spark (which can be a little adrenaline high from spending) or a deep sense of peace in knowing that you are using your finances to take care of that which nourishes you, your home and your health.”
Make Smart Choices, but Don’t Make Huge Sacrifices
If you make your debt repayment plan too daunting, it will only add to your stress.
“Whenever people ask me about dealing with debt, I like to keep a brighter future in sharp focus, even as we seek to address the missteps that got them where they are,” said keynote speaker John Hall. “For example, instead of simply saying something like ‘no more eating out,’ replace that financially harmful habit with something more positive. Never say ‘no’ to something without replacing it by saying ‘yes’ to something that controls expenses as it boosts morale.”
Seek Outside Help
You don’t have to deal with your debt stress on your own.
“When you’re facing money problems, there’s often a strong temptation to bottle everything up and try to go it alone,” Rebell said. “Many of us even consider money a taboo subject, something not to be discussed with others. Not only is talking face-to-face with a trusted friend or loved one a safe space to express yourself, but speaking openly about your financial problems can also help you put things in perspective. Keeping money worries to yourself only amplifies them until they seem insurmountable.”
Plus, it’s always useful to hear another point of view or get outside advice.
“Spending habits can become so habitually ingrained that we really need the perspective of a neutral party to ask us pointed questions,” said Misty Larkins, president of Relevance.
You may also enlist the help of a friend to help keep you on track with your debt repayment plan.
“Find your financial journey buddy, someone that can help keep you accountable and in all likelihood is navigating their own financial struggles,” Rebell said. “This way, you have someone on your side cheering you on, and who can also support you when you have a setback.”
Make Note of Your Progress
Celebrating your wins along your debt repayment journey can put you in a positive mindset.
“Schedule regular review periods as debt gets paid down,” said Yenn Lei, former head of engineering at Calendar. “Timed right, you can look backward and begin to see real progress.”
Take Care of Yourself
Taking care of yourself physically can impact your mental health as well.
“Get moving with some light exercise, don’t skimp out on sleep and find time to connect with your loved ones,” Rebell said.
You may also incorporate breathing exercises and meditation practices to help your body recover from the fight-or-flight mode caused by debt stress, Kambolis said.
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Gabrielle Olya contributed to the reporting for this article.