With both interest rates and fears of a recession on the rise, now is an excellent time to look at your spending habits and prioritize paying off debt, especially if you have a credit card balance. While that seems relatively straightforward, and we’ve discussed developing a debt payoff plan before, the truth is that debt is usually much more emotionally charged than any of us like to let on.
When you think about debt, you may experience feelings of fear, shame and anxiety that can often be paralyzing when you consider taking action, leaving you trapped and hopeless. Before you can work on the math of your debt, you need to get a handle on the emotions if you want to empower yourself to move forward.
Listen to the week’s episode of the rich & REGULAR podcast about credit card debt, and keep reading for ways to help empower yourself to face your fears and begin tackling your debt.
Debt is all around us
Debt is a fact of life for many of us. Even if you don’t have to deal with crushing student loan debt after college, you might still have a mortgage, credit cards or a car loan that keeps you up at night, worrying about the future. Debt is on the rise in 2022, with total household debt reaching $18.3 trillion in the first quarter of 2022—an increase of 8.3%, according to the Federal Reserve System.
While an increasing number of people are feeling the financial pinch, many may also feel emotionally overwhelmed when they consider digging themselves out of a debt hole. There is usually no quick fix to paying off debt, and maintaining the mental and emotional energy to keep going can be challenging.
Checking in on your mental state before tackling the practical side of debt can help you keep a clear focus. Spend time with your journal and consider the following to help you create a plan:
Examine your fear of debt
Depending on how you grew up and the money story you’ve carried with you, you may have a crippling fear of debt. While debt is unpleasant for almost everyone, it can become an actual mental—not to mention financial—health problem if left to fester and grow.
Spend some time sorting out your feelings about debt. Are you ashamed or scared? Do you hear the voice of a parent or caregiver in the back of your head saying you’re stupid for taking on this amount of debt?
Learning about the debt and your motivation for spending can help take some of the emotional charge out of the numbers on the screen. If you feel that your emotions around debt and finances are genuinely preventing you from developing a plan and living the life you want, consider speaking with a counselor who specializes in finances.
Reframe limiting beliefs
A helpful way to banish some of the recurring thoughts you may have about debt is to write them down and reframe them. If you believe you’ll never be able to pay down your credit card balances, it can make you feel like starting is a moot point and it is better just to keep your head buried in the sand.
Instead of giving up, write down all of the things you believe about your debt and your ability to handle money, whether they’re true or not. Then, write down the opposite, positive belief to help you reframe your thoughts and develop a list of statements to counter your limiting beliefs.
For example, if the limiting belief is that you will never pay down your credit card debt, your reframing statement might be, “I am learning to manage my money and make positive steps toward my financial future.”
It sounds hokey, but catching your negative thoughts and reframing them into a positive response can help you adjust your frame of mind around money.
Track your progress for momentum
Keep track of how much debt you have paid off so that when you feel down about your progress you have tangible proof of how far you’ve come. Paying off debt can take a long time, and slow and steady definitely wins the race. Develop a system to track your progress, like making a mark in a spreadsheet or keeping an old-school paper tally to help you see what you’ve done.
There are even coloring sheets you can use to make paying off debt a little prettier, or go all the way back to elementary school and create a paper chain to help you measure your progress. For every predetermined amount you pay off, remove a ring of the chain until you’ve eradicated the debt.
Talk to someone
Talking about our fears can be the last thing we want when we’re embarrassed or feel ashamed. Consider if there is someone in your life who is either going on a similar debt repayment journey or whom you trust to support you through this period. A trusted family member, partner, friend, pastor or counselor can help you keep going when you feel like giving up.
Going through debt payoff is rough, but it’s even worse if you try to do it alone.
Debt repayment looks different for everyone and brings many of our fears and other negative thoughts to the surface. Knowing that we have the support to make our financial futures brighter and reframe our negative thoughts around money can help us make progress. Empowering yourself to conquer your debt means that not only are you better prepared for whatever ups or downs the future holds, you’re also in the best place to continue your financial journey.