Eliminate Debt Stress: 8 Steps To Reduce Financial Anxiety

Did you know that debt is one of the leading causes of stress in the United States? In fact, a study by Northwestern Mutual found that “money worries” are the number one cause of stress for Americans.

And when it comes to debt, those money worries can be incredibly stressful. If you’re feeling overwhelmed by your debt, don’t worry – you’re not alone.

This blog post will discuss how to reduce financial anxiety from debt, and provide some actionable steps that you can take to get started.

What is debt stress?

Debt stress is the anxiety and worry that comes from owing money to creditors. It can be caused by a variety of factors, including job loss, medical bills, credit card debt, or simply having too much to pay back.

And it’s no wonder – debt can be a very stressful thing to cope with.

How debt affects mental health

Being indebted can have a serious impact on mental health. According to the Anxiety and Depression Association of America, “debt can lead to feelings of hopelessness, powerlessness, and despair.”

If you have financial worries, it can have a significant impact on your mental health. That’s because when you’re in debt, it can feel like you’re never going to get ahead. The constant worry and financial stress can even lead to depression, low self esteem, and psychological distress.

Increased stress level

It’s no secret that debt interferes with health, but what you may not realize is that having these issues can actually make it harder to get out of debt.

When you’re stressed, your body goes into “fight or flight” mode. This means that your body releases cortisol, a stress hormone, into your bloodstream.

Cortisol can make it difficult to think clearly, and can even lead to impulsive decision-making, which can have negative effects on job performance and really throw off your daily routine. That’s why it’s important to find ways to reduce stress when you’re trying to get out of debt.

Mental health problems

In addition to these emotional effects, dealing with debt can also lead to mental illness.

According to the National Alliance on Mental Illness, debt is a significant risk factor for developing mental health problems. If you can’t manage your financial problems, you may experience sleepless nights and constant state of worry.

Eventually, these can lead to anxiety, depression, and even suicidal thoughts. So when you face problems with debt, it’s important to be aware of the warning signs of mental illness, and to seek help if you’re feeling overwhelmed.

Physical health problems

Money problems can lead to debt stress syndrome, a condition where concerns over debt lead to mental, emotional, and even physical health issues. According to the American Institute of Stress, “stress-related diseases are some of the leading causes of death in Industrialized nations.”

Some of the physical health issues that can be caused by debt include heart disease, high blood pressure, and even stroke. So, if you’re suffering from too much debt, taking steps to reduce your financial burden will also take care of your body.

Impact on families and communities

Carrying debt doesn’t just affect the individual – it can also have an impact on families and communities. According to a report by the Consumer Financial Protection Bureau, “households with high levels of debt are more likely to experience financial distress, which can lead to marital strife, mental health issues, and even homelessness.”

Behavioral issues

Constant strife due to financial problems or credit card debt can also lead to behavioral issues. When we’re under a lot of stress, our judgment is clouded and we are more inclined to make impulsive choices, have accidents, and do dangerous activities.

In fact, according to the National Association of Consumer Bankruptcy Attorneys, “people who are struggling with debt are more likely to turn to alcohol or drugs, and are also more likely to experience domestic violence.”

Increases bad spending habits

Financial problems can also lead to bad spending habits. According to a report by the National Endowment for Financial Education, “people who are stressed about their finances are more likely to make impulse purchases, carry a credit card balance, and take cash advances.”

If you’re in debt and you realize that you are developing poor spending habits, experiencing stress, or any of these symptoms, it’s important to seek debt help from a financial advisor or credit counseling service.

These professionals can help you develop a plan to get out of debt, and can provide you support and resources that can help you avoid financial distress.

Emotional Indicators of Debt Stress

There are a few key emotional indicators that can help you determine if debt is causing stress in your life. If you’re experiencing any of the following, it may be time to seek help.

• Denial: One of the first emotional indicators of debt stress is denial. When you’re in debt, it can be easy to pretend that the problem doesn’t exist.But denying your debt won’t make it go away – it will only make the problem worse. You have to face the problem head-on.This means taking a hard look at your financial health, and developing a plan to be finally debt free.
• Panic and fear: Another emotional indicator of debt stress is panic and fear. A late payment notice makes you start feeling anxious, and it causes a racing heart, shortness of breath, dry mouth, a headache, and shivers. If you’re constantly worrying about finances, dreading opening bills, fear losing your home or possessions, or if you’re afraid that you’ll never be able to pay off your debts, it’s time to seek help and credit counselling.
• Resentment: If you find yourself feeling resentful towards your creditors, or if you’re constantly arguing with your spouse about money, it’s another sign that debt is causing stress in your life. In fact, many individuals, choose to blame themselves and the decisions they made that got them into debt. Whether it was a lavish purchase, opting out of health insurance coverage, a poor professional decision, or something else, it’s not uncommon to hold on to resentment.
• Regret, Shame, and Embarrassment: Unfortunately, money and material possessions are often linked to success in our culture. It’s no surprise if you feel embarrassed or ashamed when you’re in debt. You may be self-conscious that you aren’t earning enough money, that you didn’t handle your finances well, you have too many credit cards, or that your poor financial situation is preventing you from living the life you desire. But admitting you need debt help or credit counselling is a step in the right direction and nothing something you should be ashamed about.
• Depression: Depression is one of the other emotional effects of debt stress. If you’re dealing with a mountain of monthly payments, it’s easy to feel like you’re stuck in a hole that you’ll never be able to climb out of. This can lead to feelings of hopelessness and despair. An array of causes may produce anxious emotions, such as constant anxiety about money, feeling overwhelmed with no end in sight, and hopelessness. According to the research, 29% of those with high debt stress also suffer from severe anxiety.
• Anger and frustration: It’s common to feel angry and frustrated when you’re in debt. You may be angry at yourself for getting into debt, or you may be angry at your creditors for “harassing” you. This can lead to a vicious cycle of stress and anxiety. It’s another thing entirely to be dealing with student loans in exchange for going to college and obtaining a diploma, or credit card debt that brought you pleasure, such as vacations, shopping excursions, and meals out.

Mental health benefits of reducing debt

When you have money problems, it can feel like you’re carrying around a heavy burden. But as you start to pay off your debts, that weight will start to lift – a debt stress relief. You’ll feel lighter and freer as your financial obligations start to disappear.

Undeniably, high-interest rates make student and credit card debt a significant burden. Unanticipated expenditures like medical bills might affect anyone at any time. When you include stagnant salaries and a pandemic, it’s difficult to imagine how one may live without owing money.

As you eliminate your debts, you’ll also start to feel a sense of accomplishment. Each creditor that you pay off is one less thing to worry about. And as you check items off your list, you’ll feel a sense of pride and satisfaction and you’ll have more money for put towards other items you need to pay off.

8 steps for coping with and reducing debt stress

If you’re struggling with financial stress, there are some things you can do to reduce the anxiety and regain control of your finances. You don’t have to do it alone when it comes to your finances and mental well-being. Here are some steps to get started:

1) Take inventory

The first step is to take inventory of all your debts. This includes credit card, medical bills, personal loans, mortgages, student loan debt, car loans, and any other type of debt you may have.

Then, you’ll want to figure out how much you owe on each debt and what the interest rate is. This will give you a clear picture of your overall debt situation.

Once you know exactly what you’re dealing with, you can start to develop a plan to pay off your debts.

If some of your debts have high-interest rates, you may want to consider transferring the balance to a lower-interest credit card. This can increase savings in the long run and help you get out of debt faster.

2) Track Your Expenses

Once you’ve got your monthly payments organized, it’s important to stay on top of your finances by tracking your expenses outside of your credit payments. This includes, income, eating habits, bills, health payments, etc.

There are plenty of ways to track your expenses to help with financial relief, including using a budgeting app or website, setting up a spreadsheet, or using cash only for certain expenses.

Tracking your expenses can help you stay accountable and on track with your budget. It can also help you identify areas where you could save.

No matter what method you use, be sure to track your progress over time. This will help you see how far you’ve come and how much debt you’ve paid off.

3) Set a budget

The next step is to set a budget. This will help you see where your money is going and where you can cut back. This is the quickest way to jump start your debt relief. This is especially important for young adults who want to stat managing bills and tackling financial problems early on.

When you’re setting a budget, be sure to include all your expenses, such as rent, utilities, food, transportation, and entertainment. You’ll also want to make sure you have enough money left over each month to make a dent in your debt.

If you’re not sure where to start, there are plenty of budgeting apps and websites that can help you get started.

Once you have a budget in place, stick to it as best you can. This will help you stay on track with your debt management program.

4) Talk to someone

If you’re feeling overwhelmed by debt, it’s important to talk to someone who can help. This could be a financial advisor, a credit counselor, or even a friend or family member who is good with finances.

Talking to someone about your debt can help you develop a plan to get out of debt and reduce your worry levels. It can also be helpful to have someone to talk to who understands what you’re going through.

If you don’t feel comfortable talking about your debt with someone, there are plenty of online resources that can help you learn more about managing your accounts.

Managing your money doesn’t have to be a solo endeavor. There are plenty of people and resources available to help you get out of debt and reduce your anxiety levels.

5) Build an emergency fund

One of the best ways to reduce stress is to start building an emergency fund in place. This will help you save money to cover unexpected expenses without going into more debt.

Ideally, you should save enough to cover three to six months of living expenses. This may seem like a lot, but it can help you stay afloat if you lose your job or have a medical emergency.

When debt is interfering with achieving your financial goals, it’s too much. Saving for an emergency fund may take time, but it’s worth it if it means debt relief.

6) Cut out emotional spending

One of the biggest causes of debt is emotional spending. This is when you spend to make yourself feel better, even though you can’t afford it.

If you’re prone to spend money emotionally, it’s important to be aware of your triggers. This could be anything from boredom to stress to anxiety.

Once you know what your triggers are, you can start to find other ways to cope with your emotions. This could include exercise, journaling, or talking to a friend.

Cutting out emotional spending can be difficult, but it’s worth it if it means keeping yourself out of more debt and reducing your stress levels and money problems.

7) Get a side hustle

If you’re struggling to make ends meet, a side hustle can be a great way to boost your income. There are plenty of ways to make extra cash, from freelancing to starting a blog.

A side hustle can help you bring in extra cash each month, which can be used to pay off debt or build up your emergency fund.

Having a side hustle can also help you feel more in control of your finances, relieve financial stress. This can lead to reduced stress levels and a better overall financial situation.

8) Pay off all your debt

One of the best ways to reduce debt stress is to pay off all your debt. This may seem like an impossible task, but it’s worth it if it means getting out of debt and reducing your anxiety levels.

There are a few different ways to pay off your debt, including using a debt snowball or attacking your highest-interest debts first.

Whichever method you choose, make sure that you set up minimum payments and never miss a monthly payment. Missing even one monthly payment can accrue late fees and negatively impact your progress.

Resources for further information and help

If you’re struggling with debt-related stress, you’re not alone. Millions of people across the country are dealing with the same issue. But there is hope. There are plenty of resources available that can help you develop a plan to get out of debt and reduce your worry levels.

• National Foundation for Credit Counseling: The National Foundation for Credit Counseling (NFCC) is a nonprofit organization that offers free or low-cost counseling to consumers facing financial challenges. You can contact the NFCC to speak with a certified credit counselor who can help you develop a plan to get out of debt.
• American Psychological Association: The American Psychological Association (APA) is a professional organization for psychologists. The APA offers resources and information on a variety of topics, including debt stress. You can visit the APA website to find articles, tips, and other resources that can help you reduce your levels of worry and boost your health.
• Debtors Anonymous: Debtors Anonymous is a 12-step program for people who are struggling with debt. The program offers support and resources to help participants develop a plan to get out of debt. You can find a Debtors Anonymous meeting in your area by visiting the organization’s website.

Key Takeaways

Debt stress is a real problem that can have a serious impact on your mental health. If you’re struggling with debt stress, there are things you can do to reduce your stress levels.

Some tips for reducing debt stress include: cutting out emotional spending, getting a side hustle, prioritizing your mental and emotional health, and paying off all your debt.

There are plenty of resources available that can help you reduce your debt stress as well. Don’t suffer in silence – reach out for help today. There are people and organizations who can help you get on the path to financial freedom.

What tips do you have for reducing debt stress? Share in the comments below.