How To Not Go Crazy As You Pay Off Debt

Seventy-three percent of American consumers reach the end of their lives while still in about $61,554 of debt (a figure that includes mortgage debt), according to a study by Experian FileOne and Credit.com. Whether you owe $300 in credit card debt or $85,000 in student loan repayments, being in debt is a heavy weight on your conscience—especially if you’re trying to stay on the path to Financial Freedom. So how do you stay sane as you pay off debt?

Trying to pay off debt can make you feel crazy, giving way to frantic thoughts of, “how will I ever pay off XYZ and get out of this mess?” Or act crazy by engaging in 100 hour work-weeks. You may try to bite off more than you can chew, by putting every ounce of extra cash into payments, only to burn out and overspend.

If taking deep breaths and powering through were enough to cure this feeling, problem solved. But they aren’t, and it’s not.

So then, where does that leave you? How can you stay mentally balanced when you owe money, instead of awash in guilt, hopelessness or a plethora of other negative emotions?

5 Strategies For Staying Sane As You Pay Off Debt

Once you’ve realized your debt stress isn’t working for your mental wellbeing, you’ve taken the first step toward true Financial Freedom. Now, you just need to live in debt-payback mode for however long it takes. There is a faster, healthier way to pay off debt, but while you’re in the process, there are five strategies to keep you motivated (beyond those deep breaths!):

Strategy #1: Look At The Big Picture Around Your Debt

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You can’t change the past. But if you’ve truly decided to pay off debt and work toward Financial Freedom, give yourself a huge pat on the back! Many lifelong debtors get stuck in patterns of spending and denial, because acknowledging the damage (the debt incurred) is too painful.

When you have a true accounting of how much you owe, take a closer look at how you got into your situation and make peace with it. Did you build up credit card debt because you ate too many meals out in college? If so, consider the silver lining. Hopefully, you learned a valuable lesson about spending and credit card interest rates that will help you make better decisions now. Or did you take on a huge, six-figure student loan, only to not find the job of your dreams? Perhaps there are loan forgiveness programs you qualify for—or consultants who can help you start a profitable business based on your skill set.

Strategy #2: Make A Plan… And Keep It Realistic

If you’re working through Financially Fit Bootcamp, you’ll create a plan to pay off debt quickly. (Here’s what that plan will usually look like)  If you dedicate too little money to pay off debt, you’ll never reach Financial Freedom. But if you put too much into paying off debt at the expense of your Emergency Buffer or lifestyle expenses, you’ll jeopardize your financial safety and feel burned out within a few months.

Strategy #3: Find Little Ways To Make Extra Income

We just discussed the side hustle last week, so you know finding extra work these days can be as easy as opening an Internet browser. But do keep in mind that working yourself to the bone is potentially dangerous to your health. Don’t take on so much work that you don’t have time to rest. Decide how much time you can carve out to take on extra work (e.g., 8 p.m.-11 p.m. on most Tuesdays and Thursdays) without interrupting sleep or other essential activities of daily living.

If you make $20 an hour, even working just 10 extra hours a month can help you pay off debt twice as fast. Just make sure you have an automated system for sending that supplemental dough toward what you owe rather than extra lifestyle upgrades.

Strategy #4: Stop Comparing Yourself To Others

So what happens when you see your best friend or co-worker enjoying the perks of debt-free life? Well, nothing. Because comparing yourself just brews resentment, and you don’t need to engage with those feeling. Negative emotions won’t help pay off your debt, but they will distract you from your goal. You can’t know that person’s financial situation, so envy is futile. And they could be incurring twice as much debt as you’ve ever had as they enjoy their fancy vacation or a new car.

Strategy #5: Reward Yourself When You Hit Mini Payback Milestones

Paying off debt is hard work. So when you hit a big milestone (e.g., you finish paying off the first third of your student loan), celebrate! Buy a nice bottle of wine or treat yourself to a small gift. You’ve done something great, and are on your way to accomplishing a major financial feat. Acknowledging your success in a small way will keep your spirits up, as you journey toward debt-free life.

Community Question: Is being in debt making you crazy? Is it distracting you from moving forward on your journey to Financial Freedom? Share your tips for staying sane with the Financial Foundations Community!

 

image credit: Bigstock/kegfire

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