Your Guide to Dealing With Debt Stress
9 MIN READ
Published September 17, 2023 | Updated September 19, 2023
Having a lot of debt can feel like a huge burden on your shoulders. If your debt is taking a toll on your physical and mental health, it’s crucial to find sustainable, effective ways to relieve this pressure. Ignoring debt will only prolong the strain. Instead, focus on creating a budget, seeking professional help, and making an action plan to tackle high-interest debt for long-lasting relief.
What is Debt Stress?
Debt stress syndrome is a condition in which worries about debt negatively impact your mental and physical health. It can also affect your relationships and emotional well-being. When you’re constantly worried about debts, you may be tired, unable to focus, and have other health issues. Your performance at your job may suffer.
While debt is a necessary tool for accomplishing major life goals, such as buying a house, unmanageable debt can also create anxiety. It can make you worried that you won’t be able to save for retirement, you may feel like you won’t be able to repay your debt, and that it may lead to bankruptcy.
Mental and Physical Effects
Overwhelming debt can put your emotional and physical security at risk. It has been linked to increased suicide rates and can lead to many other mental and physical effects, as listed below.
- Chronic stress about financial problems can take a toll on your physical health. It can impact your blood pressure, exacerbate heart disease, and make it difficult for your body to recover.
- People with debt are more likely to be at risk of mental illness. Financial insecurity, constant debt collector calls, and pressure from lenders can trigger depression and anxiety.
- Debt can also lead to physical issues, such as headaches, insomnia, and lack of focus. It makes you more vulnerable to infections and colds.
- Financial worries can lead to behavioral symptoms, such as procrastination, changes in appetite, and irritability.
- High consumer debt can harm your marriage. Couples with a lot of debt tend to argue a lot, have lower marital satisfaction, and are more likely to get divorced.
- When you’re experiencing anxiety or depression due to debt, you’re more likely to overspend to relieve your feelings temporarily. Ultimately, this leads to more debt.
- Those who are experiencing financial stress because of debt may turn to alcohol or drugs to deal with anxiety and depression.
Who Is Impacted by Debt Stress
Whether you are a senior considering the cost of long-term care or a millennial with a lot of student loan debt, it’s likely that you may be feeling stressed because of finances. Americans of all age groups are impacted by debt, some more than others.
The average American has a debt load of $90,460, while members of Gen X (40 to 55 years) carry the most debt in the country at an average of $135,841. But this isn’t the only generation experiencing stress because of debt. Millennials are facing debt due to student loan debt and increased cost of living. Baby boomers carry the highest personal loan balances at $19,253.
Americans in every age group have high-interest credit card debt, which can also be a significant source of stress. Those with a lower household income are even more likely to be affected by debt stress.
It’s also important to remember that debt may not always be in your control. For example, 58% of debts in collections are because of medical debt. Additionally, many Americans are still experiencing the negative financial impacts of the COVID-19 pandemic.
Guide to Coping with Debt Stress - 9 Effective Tips to Follow
Debt-related stress can affect anybody. It can impact your physical, mental, and emotional well-being. However, there are several effective methods of coping with debt stress that can help you improve your quality of life.
1. Create a Budget
When money is tight, creating a budget may feel like a pointless exercise. The higher your debt, the more important it is for you to start budgeting. Budgeting is a money management tool that will help you see where your money is going and how you can use it for things that matter the most.
Make a list of your non-negotiable expenses, such as food and housing, and your minimum debt obligations, and compare it against your income. Oftentimes, creating a budget may show you that reducing your discretionary spending can help you make a big dent in your debt.
Your budget may also show you that you aren’t in a position to pay for much more than the essentials. If this is the case, you’ll need to make a few drastic changes, such as taking on a side gig, finding a higher-paying job, downsizing to a smaller home, or even taking on a roommate to improve your financial situation. Use budgeting apps to make this process easier, although you can budget just as well with pen and paper.
2. Prioritize Debt Repayment
If you have multiple credit cards and other unsecured debt, you’ll need to decide which debt to focus on first. This can narrow your focus and make your debt feel more manageable. Consider paying off credit card balances with the highest interest rate first before you move on to the next one to save more money in interest charges.
Another option is to start by paying off your smallest debt first and then moving on to the next smallest balance. If the number of accounts you have is causing you stress, this can be a better way of tackling debt. Remember to continue making minimum payments on all other debts while you are aggressively paying down one debt to avoid damaging your credit score. Cut down on discretionary spending or consider taking on a side gig and using those funds for debt repayment to get out of debt sooner.
3. Seek Professional Help
Consider seeking help from a financial advisor or seek nonprofit credit counseling services to plan a way forward. Credit counselors can take a look at your debt and provide recommendations on your next steps to become debt-free. They may also enroll you in a debt management plan.
If debt is causing anxiety and interfering with your daily activities, seek assistance from these resources.
- Federal Trade Commission- Guides on how to cope with debt, such as through credit counseling and debt relief programs.
- Employee Assistance Programs- Many employers offer EAP benefits to cover bills or copays for mental health treatments.
- National Alliance on Mental Illness- Free online resources and guides on mental health issues.
- Anxiety and Depression Association of America- Local and online resources for treating depression and anxiety.
- Community Mental Health Centers- These healthcare centers offer services across the country for those seeking mental health treatment.
- Centers for Disease Control and Prevention- Resources to help identify mental health issues and manage them.
4. Join Support Groups
Talk to friends and family members, or join a support group to make your debt stress less formidable. Finding a community of people to discuss your challenges can help normalize and validate your financial difficulties. You may be able to find online forums, as well as offline communities such as Debtors Anonymous, to help get control over spending habits as a source of support.
5. Reframe Your Thoughts
Negative thoughts about debt can prevent you from acting. To reframe your thoughts, start by acknowledging debt and understanding that it’s a part of your journey. Whenever you have limiting or negative beliefs about debt, question them. Negative beliefs may often be rooted in fear instead of reality. Finally, focus on solutions instead of obsessing about the problem you’re facing. Consider speaking to a professional, debt consolidation, budgeting, or other solutions that will shift your focus to action.
6. Practice Gratitude
When you cultivate gratitude, it can significantly improve your mental wellness. Gratitude can shift your perspective so you can focus on reducing the emotional burden of debt. It also encourages you to be more mindful about spending and helps you make thoughtful financial decisions. Reflecting on things you are thankful for regularly can reduce anxiety and stress. Start a gratitude journal, set aside time each day to think about things you’re grateful for, and express appreciation.
7. Develop Healthy Habits
When you recognize that debt stress is impacting your mental and physical and mental health, it’s time to start taking better care of yourself. Healthy habits are an essential foundation for financial stability. Consider incorporating regular physical activity in your daily life to reduce stress and improve your physical and mental health. This is a low-cost option for stress relief that is very effective. Eat a well-balanced diet to boost your energy and increase your focus and productivity. Additionally, participate in activities like deep breathing, yoga, and meditation to prevent emotional spending and manage stress better.
8. Stay Informed
If you want to make better decisions about your financial goals and debt, you need to stay informed about personal finance. Read financial blogs that provide valuable insights and tips about budgeting, managing debt, and saving. You can also find several podcasts that are specifically geared towards personal finance. Find one that resonates with your goals and apply the techniques you learn to your life. There are many resources available, for free or for very low cost, at your fingertips that you can use to your advantage.
9. Set Realistic Goals
Getting out of debt is a long-term, often complex process. Setting realistic and achievable goals is the key to long-term success. Take the time to assess your financial situation, including your income, debt, and expenses. Create a balanced budget that allows you to systematically allocate money to pay off debts while still taking care of your essential expenses.
Set SMART (specific, measurable, achievable, relevant, and time-bound) goals to reach your short-term and long-term goals. Review your progress regularly and adjust as needed to stay on track.
The Bottom Line on Debt Stress
Whichever debt relief option you choose to follow, one benefit you’ll experience is a reduction in anxiety and stress. As you start paying off your debts, you’ll be able to breathe freely, have more discretionary income, and will be able to better plan for your future.
If you’re not sure how to start tackling your debt, get in touch with TurboDebt for a free consultation. Our team can review your financial situation and recommend the right debt relief solution for you.