Financial Tips to Overcome the Anxiety Caused by Too Much Debt

We live in a world where money has become the source of all agony. People spend their lives trying to make enough of it, hoping it would somehow make their lives better. There is no doubt that financial security is an essential cornerstone of healthy living, however, a lot of suffering comes with the effort it takes to reach this level of security. Moreover, whether you have a good job with a decent income or you are suffering to make ends meet, debt seems to be inescapable these days—be it a mortgage, credit cards, or student loans.

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Like many people, you definitely must have felt weighed down by your financial commitments at one point. You may even be struggling with anxiety and mental distress as a result. However, this should not be the case; there’s a way out of this loop of financial despair. 

Read on to learn about some financial tips to help you overcome anxiety caused by too much debt.

Use Debt Management Tools

You don’t have to feel bound hand and foot by your debts. Many debt management tools are available for people like you whose debts are causing them constant anxiety. In the UK, for example, debt has become a growing problem; one person is declared insolvent every 4 minutes! This astounding rate has necessitated IVA agreements. However, IVA isn’t an option in all countries; in Scotland, for instance, you can’t apply for an IVA but you can apply for a protected trust deed, which is fairly similar to an IVA. As explained on https://www.scottishtrustdeed.co.uk/apply-for-an-iva/, an IVA is a formal and legal agreement that you can reach with your creditors to re-discuss the terms of your debts. After an insolvency practitioner assesses the amount that you would be able to pay given your current financial status, he/she will then act as a mediator and take this deal to your lending parties. If the majority of your creditors agree to the terms of the IVA, it will be legally approved and effectively binding. These tools are a great alternative to declaring bankruptcy.

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Do Not Default on Payments

Whatever you do, always make sure to never delay or default on paying installments. The risk of facing penalties, which means yet more financial burdens, is never worth it. There will come months when you will be financially strained and feel unable to pay the compiled monthly installment. You have to make sure you plan ahead and try as much as possible to never be in such an unfavorable situation. 

Learn How to Budget

Budgeting is the most responsible approach to managing your finances. Especially if you are self-employed or work on a commission basis, your income will vary from one month to the next. Make sure you keep an accurate and updated budget where you add all of your expenses versus each month’s income. With time, you will be able to draw a trendline and project how your financial status will look like in the future. You can find many apps and budgeting tools online that are designed for personal use. They will be of great help if financial matters usually make your head spin. Budgeting will help you avoid having income variations come in the way of meeting your monthly installment requirements. This way, you will feel more secure and possibly even notice that you are having fewer anxiety attacks than before.

Make Saving a Habit

Even the smallest amount will get your savings ball rolling. You might think that you will never have enough to put aside after fulfilling your daily needs and monthly payments, however, you will if you start saving small. Even if it’s a few bucks, you will at least be practicing how to save up, which is a very important habit. You must have heard many people complain about their inability to save; the truth is that they’ve never really honed that skill. In any case, it’s never too late to start. 

Think Twice Before Taking on More Debt

Unless it is a matter of life and death, do not take on any more debt. You already have your plate full of the money you currently owe, so there’s no point in making it worse. Even if you’re presented with a great opportunity to purchase the car of your dreams at half price with a simple car loan, do not give in. Your future self will thank you for siding with common sense and not giving in to short-lived wins.

Being in debt can shake your self-confidence and negatively affect your mental health. However, you have to understand that it is a universal problem; you’re not facing these troubles alone. Be honest with yourself and tackle your debt problem practically without being too emotionally invested. This will help you see things clearer and make better decisions. 

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