Personal Finance: Conquer Debt Anxiety and Take Control
Are you, like many Americans, managing debt? What kind of debt are you managing: credit cards? Loans? For some people, the experience of managing debt may be daunting. There may be physical and psychological elements involved which may impact the debt management experience.
While identifying the physical and psychological aspects of debt does not make them vanish, it does provide insight on how these elements may create a ripple effect on a person’s financial well-being. Chronically elevated stress from debt may manifest in the body through fatigue, headaches, digestive issues and disrupted sleep patterns. Left unaddressed, these symptoms may evolve into more serious health concerns. In addition, the psychological toll of debt may be significant. The anxiety and shame associated with debt may hinder motivation and make it difficult to take proactive steps towards resolving the situation. This creates a cycle where the emotional burden may impede financial progress, potentially worsening the initial stress. By understanding these interconnected elements, we may develop effective strategies to manage debt and break free from this negative cycle.
Some strategies to manage stress around debt involve gaining control, addressing the emotional toll, and building confidence with your financial situation, or GAB for short.
Gaining Control
Knowledge is power. Educate yourself on debt management strategies like the snowball or avalanche methods. The website https://unbury.me is a free online tool that allows you to compare each of these strategies. Understanding your options empowers you to make informed decisions.
Face your numbers. Avoidance only fuels anxiety. Create a realistic budget that outlines your income and expenses, including debt payments. There may be online tools available through your bank or credit union. Talk with your local banker to learn more. Seeing your progress visually can be motivating.
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Develop a plan. Break down your debt into manageable chunks with a clear repayment timeline. Having a roadmap reduces the feeling of being overwhelmed by a large sum.
Addressing the Emotional Toll
Challenge negative thoughts. Debt doesn't define you. Recognize self-defeating thoughts and replace them with affirmations like "I am capable of managing my debt."
Practice self-care. Chronic stress can exacerbate anxiety. Prioritize healthy sleep, exercise, and activities you enjoy to boost your emotional resilience.
Seek support. Talk to a trusted friend, family member, or financial therapist. Sharing your burden can lighten the emotional load and provide valuable guidance.
Building Confidence
Celebrate small wins. Pay off a small debt first? Acknowledge your accomplishment by participating in an activity that doesn’t add to your debt but promotes self-care! Health is wealth: invite a friend to walk with you or potluck at home. These milestones build confidence and motivate you to keep going.
Focus on progress, not perfection. Setbacks are inevitable. When you develop your debt management plan, write down potential detractors or derailing experiences as well as what you can do to stay on track. Don't let a bad moment derail you. Learn from the experience and recommit to your goals.
Focus on the future. Visualize yourself debt-free and the financial freedom it brings. This positive image may fuel your motivation and keep you focused on the long-term goal.
Remember, managing debt is a journey. It took time for you to get into debt and you can expect it to take time for you to get out of it. Be patient, celebrate your progress, and be open to seeking support when you need it, whether through a financial therapist or a non-profit agency like OnTrack WNC for help.
Wendolyn Forbes is a CERTIFIED FINANCIAL PLANNER™ with Wealth Transition Finance, A Member of Advisory Services Network, LLC. Wendolyn is a fee-only financial planner and member of the National Association of Personal Financial Advisors (NAPFA). For more information, please visit her website at www.wtf-asn.com.
Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and federally registered CFP® (with flame design) in the US, which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.
This material is provided as a courtesy and for educational purposes only. Advisory Services Network, LLC does not provide tax advice. The tax information contained herein is general and is not exhaustive by nature. Federal and state laws are complex and constantly changing. Consult your own legal or tax professional for information concerning your individual situation.
