It’s Time to Release Your Debt Shame

Debt is heavy.

And I don’t just mean physically heavy - because if allowed, it absolutely can have adverse effects on your body - I’m talking about the emotional toll debt can take on us. It’s so easy to feel like the weight of every single dollar is somehow on your shoulders day in and day out. But it doesn’t have to feel that way. Debt is nothing to be ashamed of and it should never feel like the elephant in the room, regardless what your financial situation might be. The best way to release the shame and bring yourself back to black is by taking control of your debt. So, are you ready?

Be honest with yourself

Of course the most difficult step has to be first; I only say “the most difficult” because this is what a lot of my clients struggle with. When it comes to taking stock of what is owed, a lot of people tend to get the ostrich mentality where if they just proverbially dig their head into the sand, then what can’t be seen, can’t be tracked right? Wrong. Being honest with yourself may not feel the greatest, in fact it might actually suck. But it’s one of the most important steps in really finding out what you’re up against. Track every last dollar of what you owe. You may not thank me during the process but I guarantee you will once you have a better idea of how much debt you actually have. Write down every last debt. And that includes how much you owe, to whom and at what interest rate. You’ll understand the importance of the last part next.

Tackle the debt with the highest interest rate

How are you going to make a strategic debt repayment plan if you don’t know what or how much interest you are paying towards your debt? This is why it’s important to know every detail about what you owe. The debt with the highest interest rate is the one costing you the most so make it your first target. Determine an attainable debt free target date and then write it down on the calendar. Don’t just make a mental note because a) you’ll forget it and b) it won’t feel like an actual goal unless you see it every day as a reminder. Actually take the time to write it down. Based on your target date, calculate how much you need to put towards your debts each month to achieve your goal.

Put extra income towards your debt

Did Grandma slip you an extra $100 in your birthday card this year, or even just on a random Sunday afternoon? Great! Instead of treating yourself to something nice, treat yourself to less debt. The same goes for a raise or bonus at work or your upcoming tax refund. Any extra income you receive should always go towards the debt with the highest interest rate. Why? Because it will help pay it off faster.When that debt is fully paid, move the monthly payments plus any extra income to the next highest interest rate debt. Continue this process until each of your debts are gone. Setting up a process and taking these small steps will lead to your debt-free future.

Do some financial detective work

Being honest with yourself also means knowing where your money is going. Not just the big amounts like rent or mortgage payments but even the small, automatic withdrawals that you set up years ago. Subscriptions that seemed inspiring at one time may be doing more to drain your wallet and less to fill your soul. The same goes for purchases that are simply for instant (yet temporary) gratification. These are often driven by a need to self-soothe. Bank fees and overdraft charges are another source of unnecessary costs benefitting only the banks when you neglect your finances. Once you’ve made a list of where all of your money is going, re-evaluate which purchases (regularly occurring or even one offs) still light you up. Find a way to incorporate these into your budget - because your budget should still allow you to live life! Cancel any recurring expenses that no longer serve you and avoid any future ones that don’t align with your debt-free goals.

Shift your mindset

You can take control of your debt and change the negatives to positives, literally and figuratively. But if you don’t address your mindset, you’ll be right back where you started. Your mindset, money blocks and relationship with money are the biggest factors in getting your finances back to a healthy state. Try to find patterns in your spending habits to shed light on any money blocks you need to work through. And once you identify them, work on releasing them because those are just adding to the debt shame you’re carrying around with you. But you need something to take their place, so focus on creating new money beliefs that are better aligned with the future financially abundant you.

You can take control of your debt instead of the debt having control over you. And by starting with simple steps that have the most impact, you’ll reach your debt-free goals sooner than you imagined.

Want more tips on reducing your debt or working on a more worthy mindset?