Debt can be a terrifying ordeal. Failing to pay off debt can end with bankruptcy or the destruction of your credit for a long time. More than 50% of adults in the United States who have had a credit card balance reported experiencing anxiety and stress in 2021, according to a Global Financial Literacy Excellence Center (GFLEC) and FINRA Investor Education Foundation study.
Some people experiencing this anxiety may need help but don’t want to talk about it. According to a recent study by Capital Group, women are less likely to want to discuss their personal financial situation than men are, further exacerbating the anxiety that they feel.
One source of debt anxiety for many, myself included, is student loan debt. According to the Federal Reserve’s Consumer Credit report, 43.5 million Americans have student loan debt. Student loan debt can be from the government or from a private institution, with payments typically starting six months after you graduate.
Student loan debt doesn’t affect all people equally. In fact, minority groups and women are more impacted by student loan debt, according to Money Management International. Due to the wage gap, where women earn 84 cents for every dollar a man makes, women are put at a stark disadvantage.
The good thing to know is that you are absolutely capable of making it out of whatever debt hole you are in. With some time and a plan, you can conquer your fears by finally paying it all down. Here are some tips to face your debt issues and alleviate your debt anxiety.
1. Start talking about it.
Everybody processes anxiety differently, and being in debt can feel like something to be ashamed of, but rest assured that it is completely relatable. Money Management International says the first step to overcoming debt fear is by talking about it. You can even talk to a professional debt counselor to help really get started on overcoming the burden.
2. Make a detailed budget.
In order to pay off your debt, you need to sit down and determine how much you have to pay, how much you can pay, and how much you should pay. Make a detailed budget of all of your necessary expenses for the month and determine the minimum payment required by your lender. After that, write down how much money you are going to pay every month, whether it is the minimum required or the maximum you can afford.
3. Reduce your interest rates.
There are various companies that can help you with getting reduced interest rates like Upstart and Lending Club. Many student loans can also be refinanced. Reducing your interest rates will help lower the overall amount of money you will have to pay in the end, ultimately taking some of the burden away.
4. Stay on top of it.
According to Experian, being diligent is one of the most impactful strategies for paying off your debt. Life often throws us curve balls, but it is important to stay on top of your monthly budget and debt payments. Every dollar you put toward your debt will help you, especially with a reduced interest rate. Remind yourself of your end goal frequently and keep moving forward every month.
Debt anxiety is extremely common, but that doesn’t mean it has to be normal for you. Facing your fears head on with budgeting and being proactive is the best way to reduce your debts. If all else fails, you can consider getting a credit counselor to help you with these endeavors. Even so, the simplest way to destroy your debt anxiety is to destroy the debt altogether.