Paying off a substantial amount of debt is difficult, but certainly not impossible. With belief and commitment, you can tackle your debt and get rid of it for good. It’s all about getting into the right mindset and really wanting to be free from debt! The road to debt freedom contains plenty of ups and downs and as well as these, you might find yourself experiencing a rollercoaster ride of emotions along the way.
Every Wednesday for the next 10 weeks, I’ll be writing about some common emotions that go hand in hand with tackling your debt along with some practical advice on how to deal with them.
Stage 1: Fear
Fear (or quite frankly, panic as the case may be) is a common emotion to feel when you’re facing your debt honestly for the first time.
Fearing your debt can lead to a ‘fight or flight’ response depending on how you manage to cope with this feeling.
I felt this emotion for a number of years, using the ‘flight’ coping mechanism before finally facing up to my debt. Now I choose to ‘fight’. 🙂
What is fear?
“An unpleasant emotion caused by the threat of danger, pain, or harm.” Source: Oxford Dictionaries
Ain’t that the truth. In the circumstances of facing up to your debt, fear will probably occur when you realise any or all of the following:
- You’re not sure of how much debt you’re in exactly.
- You’re in debt deeper than you thought possible.
- You can’t afford the monthly repayments.
- You start thinking that disposable income is just a rumour.
- You want to buy a house, get a new job, get married, start a family… but you can’t afford to make lifestyle changes because of the financial implications surrounding your debt.
Yep – fear relating to debt is a general worrying feeling of the unknown and ultimately the very real threat of a financially uncertain future.
How to get through the fear stage of debt payoff:
Don’t let things get worse
If you’re feeling this emotion, you probably know deep down that things are out of control in terms of your debt. If you ignore your debt now, the feeling of fear will only get more pronounced as time goes on and you dig yourself an even bigger hole to get out of. Now is the time to take action and face up to your debt. Don’t delay!
Find out the facts
One sure fire way to get through this unpleasant stage is to know what you’re up against. If you don’t know how much you owe – much like us a year ago – talk to your creditors. Write it all down: the balance; your monthly payments and the interest rate for each one. If you have the original credit agreements handy, that’s even better. Keep them all together, in a safe place.
I set up a spreadsheet detailing all our debts to include all of the above information. That way, I can lay my hands on it whenever needed and update it every month with each debt repayment.
Make a plan
Once you know the extent of your debt, you can stop yourself from getting into even more debt and make a plan to pay back what you owe. This might be by increasing your monthly payments if you can afford to or talking to your creditors to work out a reduced payment plan if you’re struggling. Tracking your spending is a good way to keep on top of your finances and highlight areas where you can save money to pay more off your debt.
Although things might seem overwhelming, you’re starting to eliminate your fear of the unknown and this really is the most important stage of the process to get through. Once you stop fearing your debt, you’ll soon be back in control again and things will be on the up!
Can you relate to this emotional stage of debt payoff?
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41 Comments
I talk to my family about their debt payoff plans, and I do notice that fear is probably the hardest thing for us each to deal with in that process. The biggest fear, it seems, is of change. They don’t really want to make big changes, and are either hoping that progress will happen via small changes, or that some miracle is going to happen (e.g. – huge jump in income, mistake on a tax return, whatever).
Done by Forty recently posted…Should We Pay Personal Capital to Advise Us?
I can understand what they are going through DB40. I used to hope for similar miracles to occur too! The thought of change can be daunting especially when such changes are noticeable to the outside world as well as the rest of the family. I wish them the best of luck in getting things sorted!
LOVE this post. So many people have no idea how much they actually owe. Fear is definitely the reason. Once you finally tally everything up, everything seems much more real, and that can be scary.
Michelle recently posted…How To Use Mint.com – The Mint Manual
Thanks Michelle! It’s impossible to hide from debt forever, so facing it sooner rather than later is only going to improve things!
When we graduated from college I hate to say this but we really didn’t know exactly how much we owed and how we were going to get all that debt paid off. We were really scared and it was a huge reality check. It’s been a longggg road but we can finally see the light at the end of the tunnel!
Liz recently posted…Trading City Living for Simpler Suburb Life
That’s great Liz! Congratulations on your progress so far. There are many people out there in debt who don’t know how much they owe. It’s a scary place to be in.
Great series idea, Hayley! Fear is a huge one. It paralyzes people at a time when they need to become extremely nimble and make some tough decisions. The best way to eliminate fear is to educate yourself and start taking action. It doesn’t happen overnight but every step forward helps you loosen fear’s grip on you.
Shannon @ The Heavy Purse recently posted…Good Versus Entitled Life: The Unintended Consequences
Hey Hayley and thanks for a truly insightful post on one of the emotions of debt.
I have never experienced the fear factor of being in debt when I was younger, but what emotion I did feel was anger!
Not sure if this is one of the emotions you will be looking into, but for me, not only was I angry at myself for getting into a mess of debt time and time again, but I was also angry at the merchants and the credit card companies who offer such enticing marketing to snare hard working folks into their web of debt tactics!
Suffice it to say, with no debt, I am much happier…and that is an emotion I can live with 🙂
Take care and my best to all.
Lyle
lyle @ the Joy of Simple recently posted…My Five Simple And Frugal Tips To Save Cash In 2014 And Beyond
Hi Lyle! You’re welcome and anger is definitely a good one to look at. I too have felt angry in the past about my debt both at myself and at creditors (but mostly myself!) Watch this space for the ‘anger’ post!
My fear of debt is associated with the interest that can grow the debt even higher. I’m diligently working on paying off one more cc that I have at 0% interest before the rate goes up.
Raquel@Practical Cents recently posted…The Growing Pains of Homeownership
Thanks for stopping by Raquel! Yes I know what you mean – interest is very scary when you think about how long it will take to pay it all back especially if it’s just the minimum payment. The trick with 0% deals is to pay as much off as possible so that there’s less of a balance to swap to another 0% (and less of a handling fee when you do).
Fear is what stops a lot of people getting help with their debt. However getting the help is what will make the fear disappear. Also knowing exactly how much debt you are in is important because without that you have no idea what you are fighting. The fear of the unknown. It’s better to know your enemy than fight blind, or as is the case with debt, hide in fear hoping it will go away.
Rob recently posted…New Years resolution financials
Well said Rob – debt is an enemy for many of us and fighting blind is seldom successful.
Hayley,
Better to own up to the debt than keep in denial. Problem of denial is that it compounds making it much worse. I added a blog roll page and have your blog on it since I’m always stalking you.
Charles@gettingarichlife recently posted…I’ve Joined The Yakezie Challenge
Thanks so much Charles! Likewise I must start a blogroll. I’ve been meaning to do that for ages! I’ll be sure to add yours once I get it up and running!
I think I wavered between fear and denial (another emotion I’m sure you’ll discuss). I never feared that I couldn’t make payments, but I more like dreaded it or didn’t want to face it. But if you do you have fear of course the best way to deal with it is face it head on, make a plan, etc.
Tonya@Budget and the Beach recently posted…My Next Car Should Be Able to Fly
I can relate to that also Tonya – dreading what the debts would mean and not wanting to find out the total amount for sure. I didn’t sleep at night much back then! 🙂
I am SO happy that you’re taking on the emotional part of personal finances. Emotions are such an integral part of the trek towards financial freedom. Feeling like you can assess and conquer (or utilize) your emotional response is an empowering step!
Claire M recently posted…What Happens If You Declare Bankruptcy?
Thanks Claire! I agree – there is a definitely a strong link between the dark side of debt and the range of emotions that go alongside paying it off! Hope to see you again for the next post! 🙂
Fear was probably the biggest issue for my parents, which kind of lead to being in denial. I think they wanted to bury their heads in the sand and just keep paying, hoping to get through it. I’m so glad they took action with their debt and that they’re able to face it head on now. It’s like they saw the light at the end of the tunnel and now they’re rushing to get there, when they never had that sense of urgency before.
E.M. recently posted…To Fix or Not To Fix
That’s great E.M. that your parents are doing so well with debt repayment. Sometimes it just clicks and you know you just have to get it paid off no matter what! I’m wishing your parents the best of luck in getting the rest of it sorted.
Fear is the mind-killer…
All great debt fears, but I suspect a very common one is the fear of never being able to get out from under your debt.
I know when I was facing a seemingly impossible debt mountain after my accident, it was paralyzing. Impossible to know what to do first. Luckily, I’m far too practical to let that stop me, so I just bought a ledger and wrote all the debts down and started paying them off. Painful, embarrassing, but survivable.
Jack @ Enwealthen recently posted…2014 Financial Goals: Are Yours Smart?
Thanks for sharing that Jack – great attitude to have! When faced with a mountain of debt, it can really seem impossible. At the time of starting this blog, I remember this horrible sinking feeling that stayed with me every day at the thought of what lay ahead and I did think we’d be lucky to ever get rid of it. Now my thoughts on our debt are much more positive as I can really see the light at the end of the tunnel. Taking real action and sticking with it has helped massively.
I wonder how many people delay putting their finances in order because of fear Hayley. I guess a lot of people fall into this category.
Yes I would agree – ignorance and fear seem to go hand in hand with facing up to debt. The fear factor means that we tend to ignore our debt issues for longer than necessary.
OH yes, Hayley, we have been here, and still go here occasionally as we look at our numbers, but you are SO right: facing the facts and making a plan helps so very, very much. This is why fear now is the exception and not the rule in our house.
Laurie @thefrugalfarmer recently posted…How to Save Money on Winter Heating Bills: Frugal Heating Hacks for the New Year
That’s how it should be Laurie – fear is now an exception rather than the rule! I’m so glad things are on the right track for you and your family. 🙂
I remember at one point while I was paying off my student loans, I was working as a freelancer for about 2 months in between jobs and I was in a constant state of fear, hoping I’d get enough work to make the bills each month. It was terrible.
Mel @ brokeGIRLrich recently posted…From Student Activities to Graduate Admissions Advisor
Freelancing can be scary when you don’t know how much is coming in each month. Without debt though, the pressure certainly eases and allows more freedom to take on freelancing work!
We were fearful that we could not live without credit cards or borrowing money when we first started our debt repayment. Now 43 months later and $88k paid off I can’t believe we ever live like that.
Brian recently posted…Week End Round Up # 15
$88K!!! How inspiring to read that you managed to pay back so much debt. I know what you mean about being fearful of not being able to manage without credit cards. I think we felt like that for some time before we had our lightbulb moment!
I can definately relate to this! Way back when I “suddenly” found myself deep in debt I was absolutely petrified of the consequences. It was actually my *ignorance* that caused the fear and made me not want to face up to the scary reality.
In essence, I kept on imagining that the problem was worse than it really was. Now, don’t get me wrong – it was a pretty bad situation – but nowhere near as bad as my mind was telling me it probably was.
When I finally “grew a pair”, opened all those bills, called my creditors, added up the totals and worked out a plan I realized that while the next few years wouldn’t be pleasant, I felt a strange sense of peace as the “fear of not knowing” drifted away.
Richard @ Frugality Magazine recently posted…How To Become Debt Free: Getting Motivated To Pay Off Debt
Well said Richard! When the shock has worn off from facing the facts, there is that feeling of “That’s it, the worst part is over.” And then you can look to the future and start working out a plan. 🙂
I laughed out loud where you wrote “or quite frankly, panic…” – that was definitely true for me! Not that it’s a funny situation to be in, though, but fear is indeed the first thing that hits you when you realize you have a problem.
Great manual you’ve written here for people who’re taking their first steps in getting their finances back on track!
Debby recently posted…Day 95 – Shock & Repetition.
I practically broke out into a hot sweat at the thought of all our debt once it was tallied up! Thanks Debby for your kind words about the site, much appreciated! 🙂
I don’t know if it works like this in the UK, but I’ve known some people who have actually negotiated their debt. Like their total debt, not just their payments. They get as much as they can together and then call the credit card company and try to get the total lowered in exchange for a large payment. If you’re in deep enough, a lot of it’s probably interest, anyways, and some of these companies would rather see some of their money back plus a little interest rather than little to none of it back with a ton of interest. Definitely not all, but some.
femmefrugality recently posted…Financially Savvy Saturdays: Six Month Anniversary!
Great point Femme Frugality! This is something that we have thought about actually (a full and final settlement), however we’ll need to save up a fair amount to be able to offer our creditors enough to clear our debts. Perhaps one day we can look at this though!
Fear is a big one. I have to call a creditor today because I had a bad payment month is December but after reading this article, I’m calling them. Thanks for the kick in the backside.
The Frugal Exerciser recently posted…See Sarah Lose – An Update
I know for me, once I knew the facts, the fear was a lot easier to deal with.
Lisa E. @ Lisa Vs. The Loans recently posted…Links Lisa Likes – Warriors vs. Nuggets