Debt is one of the contributors to mental illness. A study by Northwestern University found that it could also affect your physical health, from increased stress levels to higher blood pressure. And it can be brutal on our relationships, often leading to breakups and divorces. Debt can include a house loan, auto loan, personal loans, or credit card debt, to name a few.
- Get real about your finances. Many of us hide from the reality of our debt, rather than face it head on, and it can be scary. But you can’t tackle an unknown enemy effectively. The truth of what you owe and how you can start to pay it off is often less intimidating than you think. Create a spreadsheet in Google docs and list all of your creditors. Not sure if you even remember them all? No problem! Grab a free copy of your consumer credit report here. Next, contact all your creditors to get the total amount due or payoff amount. Now you will need to create a budget and a plan to funnel all extra funds to pay off each creditor, while still making all your monthly minimums to keep your credit in good standing. If you don’t think you can tackle it alone, contact a credit counseling agency for help. Be cautious, however, as you want to work with a credit counselor who has a good reputation, so do your research before agreeing to work with one.
- Know that you aren’t alone. Many people have been in your shoes before, and they’ve gotten out of debt and are living their lives with financial stability. So join a forum where you can talk to others who can share their stories, advice, and suggest reputable resources as you get your financial portfolio back into shape. It also doesn’t hurt to read up on others’ journeys out of the quagmire of debt. There are support groups for those focused on getting out of debt, such as this one. See if you can find one in your area, or start one yourself (talk about keeping you committed to getting out of debt!)
- Involve your loved ones cautiously. If you are married or in a relationship, you both need to be working on getting out of debt together in order for any plan to be successful. But not everyone in your family, friends, and extended network needs to know about your money issues. At times, loved ones can mean well, but can get a bit too involved in your personal business, which will make it difficult for you to feel comfortable around them. So share your trials – at least while you are working with them – with only those you trust to support and encourage you. While your children can join you in finding creative ways to save money and live frugally, you may want to share only what they need to know, lest they become caught up in the intense stress that they may not completely understand, depending on their age and maturity level.
- Forgive yourself and move on. We all make mistakes and poor choices. But we can also move past them and come to a place of wisdom and knowledge. Just because you got into debt once (or even twice) doesn’t mean you are destined to make the same mistake again and again. Acknowledge the lessons you’ve learned, put them to work consistently in your financial life, and give yourself credit for making the change. And then lend a helping hand – and a listening ear – to others on the same journey.
Are you ready to get out of debt? In the next installment, we’ll discuss tips and tricks others have used to put their financial woes behind them.
If you’ve struggled with financial stress, share your story below – how did you get out of it? What have you learned?