The best way to deal with debt stress is to solve the problem. It’s one thing to feel good about yourself but it’s another to actually be financially well off. Now is the time to do the math and make a plan to cut expenses, increase income, and pay down debt.
I’ve been there before. When the banks were handing out record cheap debt in 2022, I took advantage of them. I took on $15k of 0% interest debt that matures in one year. Although it was the cheapest debt you could ever possibly have, I still felt horrible that I had the debt on the books.
At the time, I had a $440k net worth. Therefore, a $15k debt was nowhere near what would categorize me as doing a financially bad thing. However, after a full year of holding on to the debt, I can confidently say I regret taking on the debt in the first place.
Not to mention the 3% one-time origination fee I paid to have access to that debt. It felt awful. The month before maturity, I scrambled to come up with the cash to pay it. When you have debt, your paycheck isn’t 100% yours. Banks have a claim to that money.
It’s no wonder why debt causes debt stress. Someone else has a claim on your time that generates the paycheck for you to live. The money I earned, I needed to pay my living expenses that were skyrocketing by the day due to record high inflation. That doesn’t feel good!
The good part is, there is a way out.
Debt Stress: 9 Ways to Deal With it and Get Relief
Below are the 9 ways to deal with debt stress and get the final, much needed relief.
1) Do the Math and Make a Plan
There are many ways to tackle the debt problem. My personal favorite is the avalanche method where you pay the highest interest rate first. It’s mathematically the best decision because you pay the least amount of interest on your debt.
The second method is the debt snowball method where you pay the lowest balances first. Whichever way you decide, there’s a way to be debt free. The best way to free debt stress is to do the math and actually pay down the debt.
It’s not good to emotionally feel good about your financial situation if you’re not actually good financially. In January 2023 is when I made a plan on how I was going to pay down the debt. I realized if I saved 100% of my paychecks and bonuses for the next 2 months, the math works out.
Even though it only took 2 months, it still felt grueling. Like someone else owned my precious time. It didn’t make me feel too good.
2) Focus on Paying Down Debt
It’s one thing to have debt stress but it’s another to actually do something about it. When you actually have a plan and focus on paying down debt is when everything falls into place. Focus is what elevates you to success. It’s putting in the hours, effort, and time to get there that makes the difference.
Debt is the enemy. Debt will make you feel chained down because if the inevitable economic downturn happens and you have nowhere to turn? Then you’re left with no other option but to work overdrive. Working hours you don’t really want to work, away from your family.
When I buckled down and focused on paying down debt is when magic happened. I directed all of my efforts to pay down that $15k of debt. Any additional money, I contributed towards paying down debt. It made me feel chained down to Earth.
Like I couldn’t take on the risks I wanted to take on because there was someone else I needed to feed as well. Now that I’m debt free, it feels amazing.
3) Make More Money
There’s always a way to make more money and there’s never a bad time to make more money. Although money isn’t everything, there’s nothing wrong with making more money. Many people will try to drag you down, saying “you work too hard” or “money isn’t all that important”.
That’s wrong. It’s never a bad time to make more money and if it’s for an especially noble cause like trying to be debt free, then it’s worth it to pursue building additional income. I personally am sacrificing today for a better tomorrow. The hours that I put in will matter one day.
I know in my 30s, I will thank my 20s self for putting all that work in. Although my 20s are my golden years, I choose to spend it building a better financial future life for myself. I fully understand and accept what I’m missing out on and I’m not going to lose a minute’s sleep over my decision.
Making more money is a great way to pay down the debt AND learn additional skills at the same time.
4) Stop Taking on More Debt to Relieve Debt Stress
You can’t dig yourself out of a hole by digging a bigger hole. Relieving debt stress means not taking on more debt. After I took on $15k of 0% debt, I didn’t take on any additional debt afterwards. There was no reason to. I didn’t even want to refinance.
I personally wanted to use the $15k debt to build a business.
It didn’t work out. I didn’t take on additional debt to “get everything back”. I merely wrote off the loss and plowed ahead into my future self. It’s one thing to refinance debt with a lower interest rate but it’s another to take on additional debt.
Although credit cards are amazing, it should not be used to afford living expenses because that’s digging yourself a bigger hole. Credit cards have some of the highest interest rates imaginable. Although inflation sucks and is the main cause of why so many Americans are going into debt, it shouldn’t be fixed with credit cards.
Otherwise, you may just be financially moving backwards.
5) Cut Back on Spending
Spending is one of the worst things you can do when you are under debt stress. I cut back spending in 2023 and it was one of the best things I did. I lost my savings roots and the negative effects of debt is what convinced me to go back to the basics.
Spending the least amount of money you possibly can is liberating. It allows you to take on more risk than someone else who spends on frivolous expenses. When you know you can live on $20k/year, if need be, then you know you can do anything you want.
Some spending is absolutely worth it. I spent money on a brand new laptop and phone and I can 100% attest that they are worth it than anything else I ever imagined. It’s how I compete in the world of business. Intentional spending that adds value to your life is a good thing.
Anything else is a waste of money. There’s no need to spend more just because you can. All of that extra money can go towards debt. There are many reasons like the 3 reasons to save money that make saving more important than ever before.
6) Negotiate a Lower Interest Rate
Many consumers are price takers without knowing they have a say in how much they pay. Banks would rather you pay less interest than default on the entire debt and they lose 100% of their money. When you are under debt stress, there’s nothing wrong with asking for a grace period or to pay a better rate.
The worst they say is no. They are not going to increase your interest rate just because you asked. That would be violating the terms of the contract and overplaying their hand. There’s no reason you should manage the debt stress on your own.
Banks are more than willing to help you out as long as you are a profitable customer. Too many let their debt terms stand without thinking how they can have better terms on their end. Even in a rising interest rate environment, there are some consumers who enjoy low interest rates and even lower interest rates.
You’ll be surprised on what happens in the world and what you can accomplish, if you just ask.
7) Exercise and Take Care of Your Body
Debt stress seeps through your entire body. Now is not the time to indulge in junk food and hope your body takes care of itself. Your body is resilient but over long periods of time, it breaks. Now is the time to exercise and take care of your body.
When you physically take care of your body, you psychologically take care of your body. How to manage debt stress means exercising on a daily, if not regular basis. I personally exercise 5x a week, making my way over to the company gym after work.
I don’t exercise because I want the best beach bod, but because I enjoy exercising, I feel worse if I don’t exercise than if I do. It’s made a world of a difference for me and I continued doing so in 2023. Just because your financial life needs fixing doesn’t mean you can’t have a great physique while doing so.
Your body is your greatest weapon in tackling the challenges of the day.
8) Accept that You Have Debt Stress
There are people who refuse to admit they have a problem, even if they have a problem. Imagine what I would’ve gone through if I refused to admit I have debt stress at $15k. And took on more debt, thinking everything was going to be OK.
Money is too important to take lightly. It doesn’t just buy you nice things, it puts food on the table to live well. When you actually have debt stress, it’s time to accept that you have debt problems. It’s completely normal to feel them and you’re not alone.
When you live in a false sense of reality is when everything crumbles around you. You start to make decisions like everything is fine. Maybe you buy another $50k car on credit, or any number of a hundred other things. That’s not the right decisions to take.
The first step to solving and fixing a problem starts with admitting there’s a problem in the first place.
9) Be Proud of Your Progress
Tackling the debt stress is a long journey. Whenever you have wins, it’s time to celebrate it. Whenever I get my paycheck every 2 weeks, I felt a rush of dopamine because I use that money to pay down debt. You should be proud of your progress that you make throughout the journey.
It feels bad to have debt on the balance sheet, no matter how small. As you have wins along the way, it’s time to be proud of the progress that you’re making. The final debt payment I made, I felt free. No one else controlled me, my time and money was mine and mine alone.
All of that effort, time, and attention I put into paying down debt was all worth it. Whenever you’re making progress, it’s time to be happy about them. Chris Sacca had $4 million in debt before he became a billionaire. Imagine how great he felt once he went to zero.
It may seem like ages away, but the debt free life will come eventually.
Debt Stress Can Cause Health Problems
Health problems don’t just come in the form of physical health problems like cancer, obesity, and the like. They come with psychological problems such as debt stress. Debt stress causes anxiety, depression, and lose a person’s ability to focus.
You can’t tackle the greatest challenges in the world if you are not feeling great yourself. It’s more important than ever to keep your finances in check because they affect us more than we know. There’s a reason why money is the leading cause of divorce.
It’s that important. Many will taunt and think how money’s not a great purpose and goal to chase. However, they couldn’t be further from the truth. It has extraneous benefits like improving the quality of your life and health.
I felt the worst I ever felt when I had debt stress. I couldn’t think or act properly in the way that I wanted to. It’s one thing when you try something and it doesn’t work out. It’s another when you don’t try at all because you don’t feel that good about yourself due to debt stress.
Your mind is the difference between you reaching your goals and not. When you take advantage of your greatest asset, which is your mind, the world opens up to you. I am grateful that I no longer have debt stress because I don’t know where I would be otherwise.
Your confidence is what pushes you forward.
Managing Debt Stress is More Important Than Ever
With millions feeling the impact of inflation all around the world, managing debt stress is more important now than ever before. I personally didn’t know how quickly and dramatically inflation can increase and we experienced firsthand just how much the government can ruin the economy.
I never worried about inflation in the past 7 years because I always knew how to save money and look for great deals. Even during inflationary periods. However, I didn’t know that inflation could reach so high so quickly that my spending can increase an extra 25% in a year!
Not only did I deal with record high inflation, I had debt on the books to mind. It’s one thing to only have one financial problem. It’s another to have multiple financial problems and tackling them at the same time. It seems almost impossible.
I’ve been there before. Now is not the time to panic but to buckle down and rationally solve your problems. Your problems can be solved, especially if it’s a financial one. Plenty of people were in worse positions than where you are right now and came out ahead.
I experienced firsthand how destructive debt stress is. It was so bad that I couldn’t achieve progress since I had that much debt on my balance sheet. Americans’ finances are worse off than ever before, all thanks to the government. It’s high time we fight back and take control of our own lives.
And let the good times roll.
Debt Stress: 9 Ways to Deal With It Shortlist
- Do the math and make a plan
- Focus on paying down debt
- Make more money
- Stop taking on more debt to relieve debt stress
- Cut back on spending
- Negotiate a lower interest rate
- Exercise and take care of your body
- Accept that you have debt stress
- Be proud of your progress
