Debt and Your Emotions

Debt and Your Emotions

More and more of us are in debt – and in trouble. Money is not just about our rational selves  – as our emotions are often very much invested in our wallets. If we want to get out of debt, we have to deal with the emotional as well as the financial side of money. 

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Photo by Martin Kingsley

Here are a few tips that can help you harness your emotions in a way that can actually help you get out of debt.

Give Yourself a Break

There is no point in beating yourself up over your debt – however much it is. Instead, promise yourself that you will do better in the future and then work to get rid of your debt rather than berating yourself. Taking action to reduce your debt will improve your outlook as well as your finances.

Don’t make excuses

If you have fallen behind in your financial obligations, face the truth. Most lenders do not want to hear excuses. Whatever your problems have been in the past, you will seem like a much more reliable prospect if you focus on what you are doing to get out of problems.

You will feel better and get better responses from lenders if your focus on current action rather than past mistakes. Instead of wallowing in pity and explaining in great detail the personal and financial problems that led to a missing payment, give yourself and lenders the condensed version and then move on to a detailed review of what you are doing to keep up with your payments. Most lenders would prefer to get a smaller regular amount, rather than no payments and excuses.

Give yourself a treat – without going into more debt

Paying back debts can be hard work. Once in a while, as you reach a milestone, you need to reward yourself. You should do this through some means that do not involve debt or money. If you repay your one debt, there is no sense in running up another debt again on a shopping trip!

Instead, you should list some inexpensive and fun treats you could give yourself. Keep this list wherever you keep your financial papers. As you reach a big milestone, take out your list and immediately reward yourself with one of the items on the list. This will not only keep you motivated, but it will inexpensively keep you from feeling too deprived while you work on your financial obligations.  Check out these websites for some ideas.

Work on your emotional response to debt and money

Most of us carry a lot of emotional baggage with us when it comes to money. We see money as a marker of success, or we see money as a way of making ourselves feel better, and these attitudes lead us to much of our financial problems. If we rely on money to make us feel successful, then we are apt to overspend. If we fear money – or the lack of it – we are unlikely to save it or make investments with it.

We need to be aware of the ways we respond to money and the ways that those responses shape the ways we deal with money. If you can isolate the negative emotions that influence how you spend money and how you make your money decisions, you will be well on your way towards fixing your financial problems.  Stop before you spend and ask, why am I doing this? If the answer does not seem emotionally healthy, put your money back in your pocket.

Don’t mix debt with emotion

It pays to separate your feelings of worth and your emotions from your finances, especially when you are trying to pay back debts. Feeling self-pity, shame, fear, or sadness as you try to pay back financial obligations won’t help you. Staying calm and professional as you deal with lenders and financial professionals will help you.

Debt can be emotionally trying. It is important that you keep track of your emotions during the time it takes to get back on track. If you find yourself dwelling on your debt too much or if you find yourself severely depressed, seek help at once. A debt problem is a fixable solution – do not let it become an emotional disaster for you.

Get help if you need it

Do not be afraid to ask for help – financial or emotional – if you need it. There are a number of wonderful organisations that can help you.

And keep smiling. It may seem slow and relentless, but remember  – how would you eat an elephant?

One spoonful at a time 🙂

If you like this article, try our suggested reading section for more.


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