Debt is optional and will take an emotional toll that you will need to tackle professionally otherwise it will have a negative impact on your financial health. Debts can also be overwhelming when you do not know how to manage it. There are several studies that show that debt can lead to several emotional effects including:
- Decrease in happiness
- Reduced life satisfaction
- Increase in anxiety and depression and
- May even cause several physical symptoms such as headaches and loss of sleep.
A study conducted by Student Loan Hero on more than a thousand student loan borrowers found that:
- More than 61% of the borrowers admitted that they fear that their student loan debt worries will spiral out of their control
- More than 70% of borrowers said that they suffer from headaches due to debt concerns
- About 64.5% borrowers admitted to have lost their sleep over their debt and
- More than 67% borrowers claimed to experience physical symptoms such as anxiety as a result of the stress caused by their student loans.
According to the study, it is found that there is a direct correlation between debt and reduced level of happiness and life satisfactions. In fact, the results showed that carrying debts affected in predicting financial concerns and dealing with it accordingly and for evaluating life satisfaction.
Taking a deeper look
A deeper look at the effects of debt on your mental health will reveal that even if money has the power to buy happiness, it indeed has the power to reduce it as well. It all depends on the amount of debt you have which actually weighs heavily into the equation. There are several surveys conducted by different organizations that substantiate such a claim.
- According to a study conducted by Purdue University, debts can take a significant toll on your life satisfaction in the long term.
- In another study conducted by the Harris Poll for the American Institute of Certified Public Accountants, AICPA showed that about 56% Americans carrying some sort of debt admitted to experience negative impacts in their lives.
- 28% said that their debt caused stress in their everyday financial decisions and
- 21% of Americans said that debt caused tension with their spouse.
Therefore, if you find that you are struggling with your debt and it is taking a toll on your mental as well as physical health, it is high time you take some necessary actions, but the question is where to start? You will be obviously caught in a dilemma such as:
The best thing to do is to consult a reliable and reputable credit counselor to get valuable suggestions and tips.
Steps to follow
There are specific steps in which you can curb the emotional toll of debt. The process is simple but needs some efforts from your side.
- The first thing you should do is take a closer look at how you ended up in such a situation in the first place. Identify the trigger which may be your bad habits of spending money that might have led you to debt. This will ensure that you do not repeat the same mistakes when you go forward.
- Once you know the cause or causes, you must now design a proper and actionable plan taking these things into consideration. This will help you to get out of debt but you will need to be diligent enough to follow your plan strictly. The plan will help you to confront your debt with more confidence and take away your worries and anxiety easily so that you can attain a more prosperous, happy and emotionally stable future.
- Take on the debts that carry the highest interest rates first and specifically look at the credit card debts as all of it will carry a very high rate of interest. Start paying the high rate debts off and ensure that you pay much more than the minimum payable amount each month.
- Do not overlook the scope of negotiating with your creditors for lower payments. In most of the situations when creditors feel that a debtor is really in a bad financial condition but has the good intent to repay, they may suggest a few options favorable for you such as a debt management plan. If you are lucky enough, they may even lower the interest rates and waive off the fees.
- You may also give a fair bit of thought to a debt consolidation loan to pay off your debts with better terms. This will give you a lot of mental peace now having to focus and repay a single loan and that too with much lower monthly payments in comparison to all your debts taken separately.
- Looking for effective and useful financial assistance programs is also a good thing to do if you want to get rid of your debts. Of course, you will need to qualify to avail such programs but given the fact that there are so many of it available offered by several agencies and organizations, chances are high that you will find one most suitable for you and you qualify for it as well.
- Contemplate on changing your job or taking up a part time job in addition to raise the income level so that you can repay your debts easily. However, when you look for such jobs make sure that you negotiate for a higher starting salary. Since you already have a job you have nothing to lose if you ask for it. However, if you have lost your job and looking for a new one desperately then you do not have this privilege.
No matter whatever you do consider dong a thorough research about all your available options and know the pros and cons especially the repayment options. This will certainly help you to diminish the debts faster and much comfortably.