Dealing With The Stress of Debt Pressures
Having a lot of debt can be incredibly stressful. Bills keep piling up, creditors will not stop calling, and collection agents threaten court action and paycheque garnishment. When you have more debt than you can afford to repay, the pressure can affect your entire life. And when you are worried or stressed out by debt, it becomes tough to cope day-to-day. Staring at the bedroom ceiling all night worrying about your debt problems can affect your life and your health.
If this sounds like your situation, and if you feel you have become overly anxious or stressed-out about the debt you have, here are some strategies that could allow you to cope with it all, and some tips to help you work towards resolving your financial issues.
Take A Closer Look at Your Debt
For many people, even thinking about the debt they have is too stressful. This means unopened bills and a pile of ignored envelopes, not taking phone calls when you think it is a creditor calling and pretending everything is “just fine.” Unfortunately, not only does ignoring your debt pressures not make your situation any better, but it also makes the situation worse. When you ignore debt, interest continues to accumulate. And missing monthly bill payments could seriously damage your credit rating, especially if your debts get sent on to a collection agency.
Instead of ignoring your debts, sit down at your kitchen table, rip open those envelopes and take some time to organize all your bills. Make a brief list of who you owe money to and when each payment is due. 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 will feel more in control of your situation.
Identify Why You Are In Debt
People end up in debt for many reasons. Some people lose their job and do not have enough money saved to keep up the bill payments as well as pay rent and buy groceries. Some are dealing with a family emergency where they need to financially care for others or are facing a health crisis of their own. Some of us are overspending (or spending our money unwisely). Another common issue is trying to live beyond your means. If you are overspending, there could be a reason. For instance, some people go out shopping for clothing or cool new electronic devices when they are anxious or stressed.
If you can figure out what is triggering your debt problems, you may be able to change your habits and manage your money more effectively.
One way to determine your spending triggers is to review your spending behavior. If you have not been tracking your spending up until now, you might be surprised how much information on your spending you can obtain by reviewing your bank and credit card statements. Try and figure out where your money is going to see if you can spot any patterns to your spending. Once you know what your money is going towards, it becomes easier to correct those behaviors and start saving money each month. 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 buy something.
Create a Plan
As mentioned, having a plan for dealing with debt helps you feel in control, and this can calm your anxiety and reduce stress.
A major part of your plan should be setting up a simple monthly budget. The goal of a budget is to spend less than you earn each month and to allocate your money where it makes sense. Write down your average monthly income. Then write down your expenses by category (i.e., rent, groceries, transportation costs, utilities, etc.). If your expenses track higher than your income, you will need to revise the budget by making some cuts to specific categories so the budget 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 because they do not have an emergency fund to help them out when they need it.
Another aspect of your planning process will involve creating a workable strategy for paying off your debt. One common technique I recommend is to focus on paying off the most expensive credit card or loan balance first. If you pay off the debt that is costing you the most in interest, you will save more money over time.
Get Help From Trained Professionals
If debt is overwhelming your life, or causing you significant stress, and you cannot come up with a plan to get your finances under control, know that there is help available. One option is speaking with one of Farber’s Licensed Insolvency Trustees. Our licensed professionals can help you understand all the debt relief options available to you and zero in on solutions to resolve your debt pressures.
Please reach out to us today by CLICKING ON THE FREE CONSULTATION BUTTON, below. We are here to listen – and to help!