Debt can cause some serious stress. And it can be hard to escape the cycle of financial anxiety if you don’t take steps to acknowledge and understand the difficult emotions and history that you associate with money. Try these steps to help you start reducing your concerns about debt — and move toward applying that energy to healthy habits instead.
Seek community and connection
Debt can be an isolating experience. Social taboos around money conversations often prevent people from talking openly about their finances. But the reality is that debt is common. Younger generations increasingly see debt as an inevitable part of their life, and a quarter of U.S. adults report being significantly stressed by their amount of debt.
These are troubling statistics, but you can find comfort and community in the people around you. Talking to your friends, family or other loved ones about your situation can be an important way to release pent-up debt anxiety. You never know who might be going through similar challenges — unless you talk about it.
Read more: Could you benefit from meeting with a financial advisor?
Identify your emotions
Yes, you might be feeling stress — but what other emotions come up when you think about finances? It might be a complex mix of positive and negative feelings like anxiety, satisfaction, success, pride or guilt. Exploring your money story can help empower you to better understand what emotional roadblocks might be standing in your way.
Tip: When experiencing a moment of significant stress, coping mechanisms, such as deep breathing or mindfulness exercises, can help manage the worst of it.
You can also try the 5-4-3-2-1 technique: Use your five senses to ground yourself in your surroundings. Identify five things you can see, four things you can feel, three things you can hear, two things you can smell and one thing you can taste. End with a deep belly breath. Even if your stress isn't eliminated, these exercises can help ease the intensity of the emotion.
Reflect and focus
Once you’ve identified some of the emotions that might be lurking beneath your feelings of debt stress, it’s time to put that knowledge to use. A next step you can take is to understand your money mindset— an evolution of your money story that affects your present-day financial behaviors.
Identifying your money mindset is an important step toward understanding your habits and making an action plan for your next steps (whether that's paying down debt or otherwise). Maybe you identified that you’re a big spender who finds joy in major purchases, maybe you’re a risk-averse saver who feels big expenses cause more stress than they’re worth — or maybe you’re somewhere in between. Wherever you are, that knowledge can be a powerful asset.
Remember financial feelings can be ever-changing, especially when major life events come your way.
Research and learn what works for you
Some people can feel compelled to jump right into learning about debt management and spending plans, but that research is much more effective after you’ve done your self-reflection. Those challenges you identified will help you determine how to best manage your finances.
Different tools and processes are going to work for different people. For me, automation is the key — I’ll avoid a paper bill for weeks. But when my payments and investments are automated ahead of time, I don’t fall into the cycle of stress and guilt that comes with that avoidance.
For the spenders, designating a savings bucket ahead of your next big-ticket purchase can help you avoid racking up new debt. If you love to save, you could consider setting up a high-yield savings account. Even if you’re not sure what the right tool is for you, giving different approaches a try and seeing what sticks is a good place to start.
Keep up the work
Taking these steps can help you make important progress in your relationship with money. Remember, financial feelings can be ever-changing, especially when major life events come your way.
Like debt, big money moments in your life can bring up new stresses. Receiving a windfall through inheritance, losing a work opportunity or undergoing expensive medical treatment are common financial experiences that may bring up complicated emotions. But with the groundwork you’ve laid, you can feel well-equipped to work through these new feelings with confidence.
