Pencil erasing the word "debt."Learn to Manage Debt

Being in debt impacts wellbeing directly when the ability to pay is compromised. Having debt can cause immense stress, whether it happens to a recent graduate struggling with large student loans or a parent recently laid off from a job and challenged to meet the mortgage payment.

According to Gallup polls, nearly 1 in 4 Americans rate their personal financial situation as “poor,” and almost half believe their situation is “getting worse.” Stress and worry about money can cause depression and anxiety, which in turn may have negative health consequences. Being in debt may also trigger other negative emotions, such as anger, hopelessness, and fear.

But it’s important to recognize that you do have some control over your emotional response to your financial situation. Here are some tips to help you manage debt and establish a sense of acceptance of whatever your financial situation is right now.

  1. Prioritize bills and create free rewards for yourself. The most important piece of advice that all financial experts give is to stay on top of your payments. That means paying what you owe on time, and keeping track of ways that you can make the process easier or more efficient (for example, some student loan lenders offer a reduced interest rate if you make consecutive, on-time payments or utilize an online repayment system). If you are unable to make your full payment each month due to unemployment or other financial restrictions, contact your lender to see if there is anything that can be done. Don’t be afraid to ask! To stay motivated to paying off your debt each month, arrange a free reward for yourself each time you make a payment, such as visiting a local museum on a free day, watching your favorite DVD, or calling up an old friend for a long chat.
  2. Find meaning in life and excitement in life without spending a dimeRealign your values. Many of us feel very attached to money because it represents success or achievement in our society. As a result, racking up debt feels good and paying it off feels stressful. If you find yourself mindlessly charging things or compulsively shopping for things you don’t need to survive, you may end up owing more than you can pay. Think about what you truly value in life. Are your purchases fulfilling your values or helping you meet basic needs? If not, you can probably cut back your spending. Recognize that you can very likely meet your basic needs in life—physical, emotional, and spiritual—without spending much money. 
  3. Look for the good in life. Even if you are doing everything you can to stay on top of it, significant debt can be exhausting and overwhelming. It’s important to keep a balance of positive emotions in your life to offset the negativity caused by stress. There are numerous (and free!) ways to boost your positivity, including practicing gratitude for the things you do have, cultivating supportive relationships, spending time in nature, exploring your spirituality, learning relaxation techniques, or volunteering in your community.