7 tips to deal with debt stress

Six out of 10 Americans say say money is a “significant form of stress” for them. If you’re willing to do the work, debt stress relief is possible — even if your debt lingers.
Image: Stressed woman
According to the American Psychological Association’s most recent "Stress in America" survey, six out of ten adults say money is a “significant form of stress” for them.Fabio Pagani / EyeEm / Getty Images/EyeEm
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By Vivian Manning-Schaffel

According to LendingTree, the average American household with at least one type of debt owed over $144,000 in 2018. That's one hell of a boulder so many of us carry on our shoulders. Although Americans generally feel positive about their finances, 25 percent say they worry about money "all the time," according to a recent Gallup survey. And according to the American Psychological Association’s most recent "Stress in America" survey, six out of ten adults say money is a “significant form of stress” for them. Persistent stress isn’t good for us either — it’s a well-known, scientific fact that stress takes a toll on your health by raising your blood pressure and contributing to heart disease, obesity and diabetes.

Debt stress is relentless

One of the worst things about debt stress is that it's pervasive and can be all consuming. “If there are toxic people in your life there is the option of minimizing contact, but it’s really hard to minimize contact with money,” explains Moira Somers, a Canadian psychologist, professor, author and executive coach with financial expertise based in Winnipeg. “It’s always there. When people are in financial struggle, it puts a cognitive tax on them. Any kind of stress makes us hyper-focused until we can find solutions and implement them. When the problem doesn’t end with one behavior change, our minds just constantly churn away at the problem. It depletes people, can make it harder for them to make decisions in the long run and to engage creatively in problem-solving in other aspects of their lives, because all of their cognitive resources are being devoted to this financial scarcity problem.”

This can eventually lead to a feeling of hopelessness. “You feel like it’s impossible for things to ever get better or there’s nothing you can do to improve the situation, so psychologically and emotionally you kind of curl up in a fetal position and hide in a corner,” says Brad Klontz, CFP, founder of the Financial Psychology Institute, associate professor of Practice in Financial Psychology at Creighton University Heider College of Business, and fellow of the American Psychological Association.

Yet, if you’re willing to do the work, debt stress relief is possible — even if your debt lingers. “Getting to safety isn't as simple as running away from a hungry predator,” says Amanda Clayman, financial therapist and Prudential's Financial Wellness Advocate. “Getting out of debt takes time, and sustained effort, so we will likely have to tolerate the stress for a while. In a sense, debt stress is more ‘noise’ than ‘signal,’ so we have to learn ways to manage it in order to not suffer additional adverse effects.”

How can we best manage stress caused by the debt we carry?

1. Ditch denial

All three experts we spoke with describe denial as the go-to debt stress coping mechanism, which is ultimately destructive. “Financial denial is when you stop paying attention to your finances, you don’t track them and you don’t open your statements. It’s a way to deal with stress — you feel better (about your debt) because you’re not thinking about it,” Klontz explains.

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“The constant stress leads people into denial, and vagueness and magical thinking,” says Somers. “The sense of loss of control is big, the sense of being trapped and also this cycle of shame, guilt and remorse.”

Consolidating your debt with loans can feel great and help your credit rating, but it’s only a band-aid unless you deal with why you got into debt in the first place. “Any breathing room consolidation affords makes people feel like they have they’ve got room to start spending again and, within a very short period of time, they’re often back where they started because they still haven’t dealt with the fact that their income isn’t enough to match the payments,” Somers says.

The average millionaire reports about three major financial catastrophes in their life. The average non-millionaire? Slightly less than one.

Brad Klontz

2. Face the shame

All three experts agree that facing the shame for your debt can help alleviate the stress of it. Klontz says this starts with reflecting upon your learned behavior around money. “You blame your parents — I’m joking but I’m actually not,” Klontz says. “Debt doesn’t mean you’re lazy, crazy and stupid. Your beliefs around money make perfect sense and predict your outcomes — your income, the whole thing.”

3. Accept the blame

Though it’s not easy, Klontz says accepting the blame for your debt is empowering and can ultimately lead to your success. “Please try to blame yourself for as much of your situation as possible, so you can get to the root of why you’re in debt — and there’s so much value in that,” he says. To de-shame debt, Klontz reminds his clients that they are by no means alone — most wealthy people have faced financial adversity more than once. “The average millionaire reports about three major financial catastrophes in their life. The average non-millionaire? Slightly less than one,” he says.

4. Seek strategic support

Ultimately, the only remedy for debt stress starts with facing the financial music, opening your bills and taking full account and responsibility for your debt. The experts advise enlisting the help of a trusted financial advisor, perhaps from a financial services non-profit or a credit union, or a financial planner or a CPA, to help you put together a budget and payment plan that will give you some much-needed encouragement that your situation can and will improve.

5. Take pride in your progress

Clayman says sharing the progress you make toward debt elimination with loved ones can also help destigmatize your situation. “This not only helps you feel supported and accountable, it may even inspire others to share their debt repayment journeys with you as well. Decreasing our sense of isolation or personal shame can be a significant way to combat debt stress and keep us on track,” she says.

6. Keep debt in perspective

If there’s absolutely no way out of debt, Klontz advises consulting with a bankruptcy attorney. “I have an exercise with my clients where we go down the rabbit hole of the absolute worst-case scenarios and sometimes, they realize the worst-case scenario isn’t really that bad. You can die from this stress, so is it really worth dying over? You can file for bankruptcy many times — people do it all the time. Sometimes it’s a great business decision and is something you should do,” he explains. “Your self-worth is not your net worth.”

7. Realize money isn’t the be all end all

Somers says — even in the midst of financial stress — it’s important to count your blessings to stay grounded and hopeful. “Always remember there are other resources in life than money, other sources of joy and meaning,” she says. It also helps to balance debt repayment with other priorities, including self-care, Clayman says. “Too often, people think they can only feel better once the debt is paid off. But the better approach is to help yourself feel secure that your needs will be met even as you work to get to a zero balance,” she says, adding one way to do this is to give yourself credit for the progress you're making. “For every year of on-time payments, for example, find money in your spending plan to treat yourself to something you enjoy as a reward for a job well done,” she recommends.

How to Get Out of Debt

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