Debt can cause serious emotional, mental and financial stress. If you’ve ever fallen into a cycle of avoidance, guilt or anxiety because of outstanding debt, it can be hard to escape. To do so, it’s important to understand the emotions and history that you associate with money.
Luckily, you don’t have to solve everything overnight to start feeling better. Small shifts in how you think about and manage debt can help reduce your concerns — and move toward applying that energy to healthy habits instead.
Read more: Could you benefit from meeting with a financial advisor?
1. Seek community support to discuss debt
Debt can feel like an isolating experience — especially because people don’t always talk openly about money — but the reality is that debt is common. From student loans and credit cards to medical expenses, people take on debt for a variety of reasons. Still, a quarter of U.S. adults describe their total debt load as unmanageable.
Talking to someone you trust about your situation is an important way to release pent-up, debt-related anxiety. You may even find you connect over the similar challenges you’re facing. You’ll never know unless you talk about it.
2. Name your emotions around debt to ease the weight
Stress is often the easiest emotion to identify when thinking about debt, but what other emotions are lying under the surface? It’s likely a complex mix of feelings like fear, shame, frustration, guilt or even the pressure to “have it all together.” 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 can help manage the worst of it.
One simple method is 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. It might not eliminate your stress completely, but this exercise can help ease the intensity of the emotion.
3. Reflect on your day-to-day money habits
Once you’ve identified some of the emotions that might be lurking beneath your feelings of debt stress, it becomes easier to understand your money mindset — an evolution of your money story that affects your present-day financial behaviors.
Maybe you identified that you’re a big spender who finds joy in major purchases, or perhaps you’re a risk-averse saver who feels big expenses cause more stress than they’re worth. Or you could be somewhere in between. Wherever you are, identifying your money mindset is an important step toward understanding your habits and making an action plan for next steps (whether that's paying down debt or otherwise).
4. Research and customize your debt management plan
Financial methods aren't one-size-fits-all. Different tools and processes are going to work for different people. If you tend to avoid bills for weeks, automation is key. When payments and investments are automated ahead of time, it can help avoid falling into the cycle of stress and guilt that comes with that avoidance.
For some, it’s easy to jump right into learning about debt management and spending plans. For others, it can be difficult to face the self-reflection needed to help determine how to best manage their finances. But experimenting can be a good place to start building a system around your real habits, not an idealized version of yourself.
For example, try designating an Ally Bank savings bucket ahead of your next big-ticket purchase can help you avoid racking up new debt. Or consider setting up a high-yield savings account. Even if you’re not sure what the right tool is for you, give different approaches a try and see what sticks.
5. Maintain small progress over time
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 surface complicated emotions. But with the groundwork you’ve laid, you can feel well-equipped to work through these new feelings with confidence.
Moving forward with confidence
Debt might feel overwhelming, but it doesn’t define your future. Over time, small shifts can help you build a healthier relationship with money and feel more in control and better prepared for whatever comes next.
