{I wrote this last week when I was in the dumps…}
Most everyone would agree that being in debt just plain sucks. You feel guilt you’ve never experienced before, anxiety that you just can’t shake, and shame that your debt is affecting your lifestyle.
Here are 7 ways I’ve found to deal with the Debt Monster:
- Get a Debt Buddy
You need at least one person in your life outside your family that you can talk with about your financial situation without shame or judgment. This could be a friend, a counselor, anyone. It’s probably best to find someone in the same income range as yourself so that they can relate to your spending habits even if they can’t relate to your debt. Get a Debt Buddy.
- Reward Yourself Richly
When you have a good day at work, or tear through your to-do list, reward yourself richly. Yes, richly. Does richly mean expensive? No! Find a low-cost activity or food item (my rich reward is a frosty and large fry from Wendy’s) that is special to you and you can enjoy without guilt. Make sure to only give yourself this reward when you achieve a goal.
- Shower at the Gym
Get up before work and drag yourself to the gym. Bring your clean clothes and shower at the gym after you work out. It’s a great way to start the day, and showering at the gym forces you to go or smell terrible all day! Also, if you can discipline yourself to exercise, then you can discipline yourself to budget and save.
- Take an evening nap
After Dinner, take a short 20-40 minute nap. Your brain will love you.
- Keep a journal about your debt journey
Writing down your goals, thoughts, and even fears can be very therapeutic. You can keep a paper journal, or easily start an online blog at wordpress or blogger. Writing about my overwhelming debt has helped me tremendously in dealing with it, and realizing that I’m not alone (although being 300K in debt and 24, I may be a bit unique).
- Watch a comedy show
My favorite two shows to make me laugh about my life and debt are: Arrested Development (rich dysfunctional family) and The Office (if only my office were like this show!). Being able to forget your life for 23 minutes and laugh at another’s expense is invaluable in emotionally dealing with your debt.
- Get Organized and Get Movin’
While most of the above tips are emotional ways to deal with your debt, you don’t want to be doing these steps forever. Make a debt reduction action plan and stick to it. You’ll have to make sacrifices, but the reward of not have the Debt Monster on your back will pay dividends for the rest of your debt free life.
How do you deal with debt?
Are you an exerciser? Do you spend time with your family when your debt is bumming you out? Watch a funny movie? Go shopping? What do you do? If you had debt in the past, but are debt free now, how did you get there?
{ 9 comments… read them below or add one }
We’ve had a hard journey in that we graduated (me from undergrad and DH from law school) with a combined student loan debt of almost $90,000, then we added some more debt. Then DH lost 10% of his income…and we had 2 kids. I’d read these debt reduction things (Mary Hunt and her Cheapskate Monthly is the one that comes to mind) and read about people in tons of debt who saw the light and in mere months or years buckled down and were debt free!!! Oh, gag me!! Focusing every extra penny after our savings and retirement we were looking at years and years (and years) of slogging away paying down our debt. I wanted to shout swear words every time I rad one of those sappy stories about someone turning their financial life just like that!
Anyway – I dealt with it by making a budget and looking at it often and adjusting it a few times a week based on our spending. I know where every penny goes and it gives me a sense of control in what feels like a very out of control situation. I stay at home with the kids so this is what I can do to change our situation.
I also tend to feel sorry for myself sometimes when I watch my friends get big houses, new cars, toys, etc. I reassure myself by remembering that I’m heading towards debt free and adding those things adds debt. I also try hard to make living frugally a creative endeavor. I try to make it a game or a creative outlet rather than a chore.
I also would like to add – have faith. When you do what’s right and you keep at it, you are rewarded. We slogged down our seemingly endless path to being debt free day after day. Then 2 things happened – time passed, bring us closer to our goal. And windfalls did come our way – and since we had a plan and were on the right track we were able to use those windfalls to pay off more debt. If we didn’t know our financial picture chances are good that we would have blown those windfalls and then faced even MORE years of being a slave to debt.
It is hard to believe, but we are actually almost there. Finally I can see the end of the tunnel. It seemed like such a chore, but finally getting to the part where I can do what I LIKE with my money is so freaking exciting!! It is so worth it to do the work to get to the place where finally you’re in control.
this sounds like what i told casey serin to do last september. ha ha yep you’ve got it.
i’m a total exerciser. i had a different experience that you. i had debt and recession. so i couldn’t even go to my job. i had to start a business instead. which actually has worked out well, but it was a tough experience. glad i did it though.
20 years ago as a new homeowner, I faced a 50% in income due to a medical problem. I sucked it up. I ate a horrible diet (but I was young and recovered) of potatoes, rice, beans, eggs, and a few cheap meats. I was like you, but not so deeply in debt but it seemed like it at the time. I owed every major credit card and store card, I’d never imagined losing 1/2 my income at my age. My mortgage which was originally probably around 35% of my income became more than 70% of my income. Plus, I had all those housing expenses, which I didn’t have as a renter: water, taxes, garbage, other utilities unknown to renters.
Honestly? After my mortgage was paid, I probably had $300 a month for everything else, including groceries.
I never went to collections but I did “rotate” some credit card bills. One month A got paid, the next month X got paid. The following month A got paid again. Just substitute AB and C for A, and XYZ for X. Nobody got paid two months in a row; everybody got paid the minimum every OTHER month. And I ate potatoes and eggs, eggs and potatoes. It was horrible and I’m sure my credit suffered, at least a little but I was never horribly late on anything. I did have one county utility bill go to a lien, which was quickly cleared up, once I was able to work again. But, oddly, it never went to collections and I never really had many collection calls. Since my car payment had never been late, I was able to push a couple out to the end of my loan contract but they never went collections on me.
I was young and stupid. I thought my income would always go up. Once I was able to go back to work, I swore I’d never be in debt again. I’m not sure where I heard or read it, but I did use the snowball method in getting out of debt. Tackle the smallest bill (pay the minimum on all others) and throw every cent at that little bill until it’s paid. Move to the next one and add every cent you paid on the first one + the original minimum on the second one until it’s paid and keep on until you’re done.
Did I cheat? You’d better believe it. I would have been out of debt a lot sooner if I hadn’t, but as you already know, you still have to be able to live and have fun.
Now, my mortgage is around $50k and I owe a little less than $6k on a car I like and will keep for at least 10 years and the car loan was for 4 years and 2.9% interest. I’d like to pay that off in the next six months.
It took me around 10 years but it’s because I cheated. I took saved money to travel and it was something I needed to do, but I never forgot about paying down my debt. I didn’t finance travel but I probably “should” have used the money to get out debt sooner. Plus, I’m a girl…we need our clothes. But, and it’s a big BUT…if I charged something in one month, when the bill came due, I made myself pay it in full. Even if it meant returning to my diet of potatoes and eggs. With a few fruits tossed in to try to keep it balanced.
It’s not easy and I’m a little disappointed in you for taking the bankruptcy route, especially chapter 7 which basically screws those who gave you the credit to buy all those toys you turned around and sold on e-bay and craigslist for cash. Chapter 13, which would have repaid all those who loaned you money, would be less hard for me to take. What can I say? I’m one of those who repaid every dirty penny, whether “they” took advantage of me or not. You know what? If they took advantage of my greed, then I’m the one who should pay for the lesson.
It’s a bit like I’m disappointed in you being angry at your friends/tenants. You considered their rent income. In reality, you should have considered that as a portion of your loan/house payment. Not income. Never income. They were paying you for the roof over their heads, no matter how bad they were as tenants…if you didn’t like their lifestyles then kick them out and find better roommates that would help cover your MORTGAGE. It should never have been considered as income. As far as you taking their rent payments after you stopped making the mortgage payment in December? I sympathize with them, although I don’t like the way they confronted you with it. Too much passive aggressive posturing on both sides.
Enough said?
But I admire your spirit and your determination to repay your mother. God help you if you ever swerve off that path.
You’ll be CaseySerinII to most folks.
I just had higher hopes for you. I thought you’d repay every dirty penny you gambled away via day trading. I thought you’d repay every dirty penny you borrowed to pay off previous creditors.
I thought you had the integrity you started this blog with to do so. I don’t blame you for taking the easy way out and I understand that even the “easy way” is hard.
It’s just that I started reading this blog thinking that there was at least one Gen Y’er who would own their mistakes.
My bad.
“20 years ago as a new homeowner, I faced a 50% in income due to a medical problem.”
Should have been:
“20 years ago as a new homeowner, I faced a 50% REDUCTION in income due to a medical problem.”
Again, my bad.
Thanks for the encouragement Nicole!
Friendly…really. You made some really good points. In fact, I really don’t disagree with anything you said. The thing with my situation is I can’t just think about myself. If my mistakes had only affected me, and I was the only one to think about, I probably wouldn’t be filling the BK. I could possibly stretch things out, and keep trying to get my income up to a level to pay off what I need to on the personal side of things.
But, I owe my mother a crapload of money. A huge, monumental, crapload. It’s not fair for me to forget about what I did to her money in this situation. So, yes, maybe a ch. 7 is “cheating” on my road to repaying everything. But its what I have to do. Plus, it will discharge only around 60K of the 300K+ I owe. Not that it makes it any better.
Anyway, just thought I’d defend my actions a bit. Not that I really need too, but its good to be reminded about why I’m doing things the way I am, so thank you “friendly!”
DK,
Do you suppose that I thought only of myself when I repaid my debts in full? No, if I had, I would have filed bankruptcy.
I understand your need to repay your mother. Priority number one morally since you didn’t have her permission to play with that money.
Morally, do you owe your other debtors less than your mother? No.
Emotionally there is a huge gap between what you owe your mother and your other debtors. Morally, no.
Morally, you signed agreements with all except your mother to borrow responsibly and repay what you borrowed.
Did they give you too much credit? Absolutely. Were you required to use all of it? No.
Their interest rates were unconscionable, even if you were a late payer. Is there a reason they charge those rates? Absolutely, it’s to kept debtors repaying in a timely manner. It’s to repay losses from dead accounts. It’s what keeps credit charges high for almost everyone. It’s to repay the lost money on people who go to collections and never repay, to offset the losses to bankruptcy.
You have no idea how much my blood boils to see discharged bankruptcies for fools who get in over their own heads. Do the banks tempt you? Sure. Do they hold a gun to every borrowers head to borrow their full credit limits? No.
I do cut you some slack for being young, I’ve already said I that I did the same thing but not to your extent.
A month ago, I would have given you money to help you out (not that you’d have taken it). Not a loan. Just flat handed you cash. Seriously, if you’d had a paypal, I would have donated. I don’t see how accepting cash from strangers who wish you well can be more odious than filing bankruptcy. At least it would have helped pay your bills and kept you focused on building your business.
How is it more honorable in your mind to break your commitment to repay your creditors than it is to accept charity (which we have all needed in some way/shape/form) from others which might have kept you from this action?
I seriously don’t understand the 180 degree turnaround.
Not that you need to explain.
And I’m not talking about pity, I’m talking about empathy when I said I’d have been willing to donate. I think every one of us has been in a tight spot and can admire those who work themselves out of it honorably.
DK, are you filing Chapter 13 or Chapter 7? If it’s 13, then I am okay with you filing it, as it at least repays your creditors in part. And how is this going to affect the business accounts? Your business seems to be doing well these days, from what you’ve said. (Gotta give the guy a little credit for earning some money!) You aren’t filing Chapter 11 too, are you?