Money troubles and debt problems are a huge source of stress. While it may seem like an easier route to ignore your money problems, the only way to overcome financial stress is to face your debt problems head-on.
“The debt cycle will continue to churn unless you change its direction. The first step is acknowledging that you have a debt problem. While this task can seem intimidating, acknowledging that you have a problem will actually be empowering. It is the first step to taking back control of your life,” says Jeff Schwartz, executive director, Consolidated Credit Counseling Services of Canada.
When you are heavily in debt, it may seem like you’ve got no way out, but you do. The first step is acknowledging that you’ve got a debt problem. Next, you need to learn about your options and arrange to get the support that you need to become debt-free. Call one of our trained credit counsellors at 1-888-294-3130 or check out our free online debt analysis.
Signs that your debt has become a problem
Suffering from debt stress is definitely a market of a debt problem, but there are other indications as well that suggest you need to act now to reduce your debt.
Are you receiving calls from bill collectors? Do you avoid the phone or fear the mail, because you know there are notices waiting for you? Are you using one credit card to pay another? Are you only ever able to make minimum payments? Do you have any savings? Do you lie awake at night worrying about how you are going to make ends meet, including your debt payments? Does a sizeable chunk of your take-home pay go to debt?
All of these are signs that you need to have a debt wake-up call, or you’ll continue to suffer from financial stress.
How to face your debt reality
Having bad credit doesn’t make you a bad person. Many people end up with debt problems as the result of circumstances beyond their control, like a job loss, illness, life event or unexpected expenses. There is no shame in admitting that there is a debt problem. In fact, that act, coupled with developing a strategy to get back on your feet and pay your debt down, hands the control back over to you. Once you’ve taken that control back and start making steps towards reducing your debt load, your stress levels will reduce.
Tally all of your debts so that you know exactly what you are up against. This will help you determine your path forward, but also help you to establish a likely timeline towards becoming debt-free.
Circle yourself with support
Paying down debt and turning your life around is hard work. Your drive and determination is important, but you are more likely to achieve success if you’ve got several touchpoints for support in your immediate circle. Enlist your family and friends for support by sharing with them your situation and your plan to become debt-free.
“Establish a relationship with a financial professional that you trust. Rely on their knowledge and confidence in you to see you through to success. You need to be comfortable, be reassured and have the ability to have your questions answered. If you choose to work with a trained credit counsellor, you can expect a judgement-free zone with ongoing support and resources throughout the process,” says Schwartz.
Worrying has a way of bringing negativity around, which can actually be a barrier to your success. Believe in your ability to pay your debt down and leverage that positive energy to move forward.
Adopt a money mantra to repeat to yourself several times a day, which will reinforce your goal and motivate you to stay on track.
Develop a strategy
Determine what the best option is for you to pay down your debt. If you are able to consolidate your debts with a personal loan or a balance transfer, that is a great way to go. Alternatively, you can investigate a debt relief option, like credit counselling with a debt repayment program as your strategy to pay your debt down.
Solidify your strategy by taking advantage of tools to help get the job done, like setting up a budget and sticking to it every month.
Take stock of your habits
In order to face your debt problem head-on, you may need to change some of your habits around money. Misusing credit is behaviour with troublesome consequences. If you change your attitude towards spending and saving, not only will you have an easier time of it while paying your debt down, you will be more likely to stay debt-free in the future.
Use cash instead of credit, within your budget. Learn to be patient with purchases and save up before you, rather than buy now and pay later. Instead of indulging in retail therapy as a pick-me-up, find free (or nearly free) ways to reward yourself. Commit to becoming financially literate, so that you are armed with the relevant knowledge that will set yourself up for financial success in the future.
Manage your health better
Financial stress is real and it can have devastating consequences on your mental and physical health if you don’t manage it proactively.
In addition to seeking help from a financial professional to pay down your debt, reach out to your health care professional for help in dealing with the physical and emotional symptoms of stress. These symptoms include stomach pains, nausea, headaches, generalized anxiety, feelings of hopelessness, depression and more.
Your health care professional can assess you and suggest ways to help you cope better with financial stress as you put your debt repayment plan into action.