How to Not Let Debt Stress You Out
Brooke is a freelancer who focuses on the financial wellness and technology sectors. She has a passion for all things wellness and spends her days cooking up healthy recipes, running, and snuggling up with a good book and her fur babies.Read full bio
At a Glance
Debt stress comes in many forms. Of course, there’s the undeniable financial stress of owing money to another person or entity. But there are also psychological implications and even physical manifestations. If you’re plagued with debt, and it’s consistently causing stress in your life, here’s what you need to know about the consequences and how to handle debt stress.
Negative consequences of being in debt
Being in debt is no walk in the park. Those who have been in debt can attest to the negative financial, physical, and emotional consequences.
Financial consequences of being in debt
Many people with excessive debt experience negative implications on their credit score. If debt has become such a burden that you can’t meet monthly payments, the payment history section of your score may be repeatedly dinged. And a lower credit score could impact your ability to obtain credit in the future.
Physical consequences of being in debt
Debt stress isn’t just limited to the stress that goes on in your mind. It can manifest as physical symptoms too, which can present as headaches, fatigue, or sleep issues. Over time, constant stress can lead to more severe health issues.
Emotional debt consequences
You may feel embarrassed or ashamed that you let yourself get into debt in the first place. Unfortunately, this can cause low self-esteem and resentment of others who seem to have their financial life in order.
It’s also possible that you feel regret at how much money you spent or the fact that you didn’t shop around for a better deal that might have saved you more. All of these emotions can lead to frustration if you feel like you’re in so deep you may not be able to pay off the debt in the coming years or decades.
How to handle debt stress
Perhaps the most obvious solution to alleviating debt-related stress is to eliminate debt quickly. And depending on how much debt you have, it could take years or even decades to completely pay off your debt. But that doesn’t mean you can’t manage your stress in the meantime and work to get in a better psychological place when it comes to your finances.
Pretending like debt doesn’t exist or that it’s not a problem can cause unnecessary stress. Instead, acknowledge it and forgive yourself for getting into this position. Once you offer forgiveness to yourself, you can work to move forward without shame and blame constantly hanging over your head.
Get to know your debt
You can’t begin to attack your debt and alleviate associated stress unless you know what you’re working with. Create a list of all debt, being sure to include:
- Amount due
- Interest rate
- Minimum monthly payment
- Due date
With this information in hand, you can move toward making a plan.
Create a plan
The best way to alleviate stress from debt is by making sure you have a plan in place that you can follow to debt freedom. First, decide on a strategy to begin repaying debts. Two popular options are the debt snowball, which begins with paying off your smallest debt balance first, and the debt avalanche, which starts by targeting the highest interest debt.
If the sheer number of debts you have is what overwhelms you, consider debt consolidation. You can use a debt consolidation calculator to determine how much you might save by switching to a loan that can help to consolidate credit card debt, student loan debt, or multiple personal loans. There are plenty of debt consolidation programs you can lean on for help if you choose to pursue this route.
Debt repayment can be a long and lonely road. And there’s no reason you shouldn’t seek support in the journey. Consider confiding in a trusted friend or family member to see if they’ll help to keep you accountable and on track. You can also seek professional help in the form of a credit counselor or financial planner.
Benefits of paying off debt
There are many benefits to paying off debt, including:
- Lower stress: Perhaps the most significant benefit of getting your debt burden under control is alleviating the emotional stress of carrying it. The psychological benefits of paying off debt can be felt almost immediately as you get debt under control. You can lower your risk of mental health issues like anxiety and depression, and also improve sleep and focus.
- Ability to focus on other financial goals: 78% of respondents in the Northwestern Mutual Planning and Progress survey1 indicated that debt has impacted their ability to reach financial stability. Once you clear up debt, you can become stable enough financially to begin to pour more resources into other goals, like investing, retirement planning, and saving.
- Alleviate conflict in your relationships: Finances are cited as one of the top reasons couples get divorced. So it makes sense that eliminating debt and the associated financial stress can help alleviate some unnecessary arguments. You can also become a better teacher for your children and help them understand the benefits of eliminating debt and not taking on a stressful debt load in the first place.
- Improved credit score: Often, those struggling with debt end up with late or missed payments that can hurt your credit score. Paying off debt and getting a handle on monthly payments means you may see improvements in your credit score over time.
Debt stress FAQs
How to cope with debt burden
Coping with debt starts with acknowledging it. It’s important to assess your debt burden and understand the actions or habits that put you in debt in the first place. Then, you can create a debt repayment plan that will help eliminate your debt burden slowly and sustainably over time.
Why does it feel good to pay off debt?
Paying off debt feels good because it can help alleviate mental stress and change your emotional state. By removing the shame and embarrassment associated with accumulating debt, you may feel better simply from the absence of those emotions. When you pay off debt, you’ll instead replace those feelings with those of freedom, success, and accomplishment.