How to Handle Debt Stress
Dealing with debt can be incredibly stressful. Bills keep piling up, creditors won’t stop calling, and collection agents may even begin to threaten you. When you have more debt than you can afford to repay, this situation can affect your entire life. When you’re worried or stressed out by debt, it becomes tough to eat well, exercise, get a good night sleep, socialize with friends and family, or live a normal life.
Debt problems can consume every aspect of your life and every thought in your brain, which is exhausting and potentially damaging to your mental health.
If you are anxious or stressed about debt, here are some strategies that could help you cope as well as some ways that you can work to resolve your financial issues.
Look at Your Debt
For many people, even thinking about their debt is too stressful. This means that they leave the bills unopened, ignore the phone calls from creditors, and pretend that everything is fine. Unfortunately, not only does ignoring your debt not make your situation any better, it actually makes it worse. When you ignore debt, interest keeps accumulating and missing your payments could seriously hurt your credit rating, especially if your debts are sent to a collection agency.
Instead of ignoring your debts, look at them and understand them. Determine how much you owe to each creditor, how much interest you are paying, when your payments are due, and everything else that is important. This information can help you come up with a plan to solve your debt problems. When you have a plan, your stress levels will drop since you’ll be more in control of your situation and you’ll see a light at the end of the tunnel.
Identify Your Issues
People end up in debt for many different reasons. Some people lose their job and do not have enough money saved to help them deal with the situation. Others may be overspending or spending their money unwisely. Another common issue is trying to live above your means. If you’re overspending, there could be a reason why. For instance, some people spend money when they’re anxious or stressed. Others shop for entertainment or to relieve boredom.
Figure out what is leading to your debt problems and this can help you change your habits.
A good way to do this is to review your spending. If you’re not tracking your purchases, you can get a lot of information on your spending by reviewing your bank and credit card statements. Try and figure out where your money is going and see if you can spot any patterns. Once you know what your money is going towards, it becomes easier to make a plan for dealing with your debt.
When you look at your spending history, see if you can determine why you spent what you did. You can then come up with other methods to help you deal with your stress, anxiety, or whatever is leading to your overspending. For instance, you may want to plan to go for a walk outdoors instead of heading to the mall when you feel the compulsion to shop.
Create a Plan
As mentioned, having a plan for dealing with debt helps you feel in control and this will calm your anxiety and stress.
A major part of your plan should be setting a budget. The goal of a budget is to spend less than you earn each month and to allocate your spending where it makes sense. Write down your average monthly income. Then write down your expenses. If your expenses are higher than your income, you’ll need to make some cuts so it balances.
Be sure you put some money aside each month for emergencies as having emergency savings can help you avoid going deeper into debt when something unexpected happens (such as a job loss or an unplanned expense, for example). A lot of people end up in debt trouble because they don’t have an emergency fund to help them out when they need it.
Another aspect of your planning process involves coming up with a strategy for paying off your debt. One common strategy is to focus on paying off the most expensive debt first. If you pay off the debt that is costing you the most in interest, you’ll save money over time.
Get Help if Needed
If debt is overwhelming your life, or causing you significant stress, and you can’t come up with a plan to get your finances under control, know that there are options available. One option is speaking with a Licensed Insolvency Trustee. A trustee can help you understand the debt relief options that may be available to you.
As stressful and difficult as debt can be, know that there are options out there to help you. A trustee can help you find them.