Having too much debt can make life difficult, and not just in financial terms. People struggling to keep up with debt payments frequently grapple with negative feelings like anxiety, depression, and powerlessness.
Paying down debt even a little bit at a time will inevitably lighten the associated mental burden. Eventually escape debt completely, and your entire mental outlook can transform for the better.
Taking charge of your debt will also change the way others around you feel and think. While there are almost always sound financial reasons to pay off debts, the psychological and social benefits can be every bit as rewarding and important.
Major Psychological Benefits Come From Paying Debt Off Little by Little
By the time your level of debt becomes an issue, paying it off all at once will almost always be unrealistic. Psychologically informed techniques like the “debt snowball” and “debt avalanche” strategies are designed to help debtors make steady progress, no matter how hopeless the situation seems.
Most people who commit to becoming free of debt will need to budget, save, and make payments for a fair number of months or even years before reaching the finish line. Simply adopting and sticking to a debt repayment plan, though, will contribute to steadily improving mental wellbeing. Some of the positive feelings that most often come from paying down debt little by little are:
- Acceptance. People who have ended up with unsustainable amounts of debt often take quite a while to admit it. Many even deny that they are in denial about debt, making an appropriate response far less likely. Taking any sort of concrete step toward paying off debts will make genuine, lasting acceptance of the problem a lot easier. While denial can become a formidable roadblock, even a minor breakthrough that allows progress can eventually bring down the entire obstacle.
- Empowerment. One of the reasons why so many people fail to tackle their debts for so long is a feeling of helplessness. Recognition of the problem is always important, but taking action is even more so. Seeing credit card balances and other forms of debt decline as they get paid down will almost always produce feelings of empowerment. Debtors who feel like they are properly equipped to overcome their financial challenges tend to become more determined and optimistic.
- Pride. Unscrupulous debt collectors are infamous for trying to make debtors feel worthless. Even when collection calls and dunning letters have not started arriving, people often feel ashamed of being deeply indebted. Paying down debts even little by little will almost always leave you feeling prouder and worthier than before. It almost goes without saying that it is easier to stick with a plan you feel proud of.
- Happiness. Debt and depression seem to go hand in hand to such an extent that the direction of causation can be difficult to pin down. Even deeply indebted people who do not develop clinically significant depression almost always experience morale-sapping unhappiness more often than in the past. Becoming even a bit happier as the result of paying down debts steadily over time can help you build much-needed momentum.
Psychological benefits like these make it easier to keep paying off debt little by little over extended periods of time. Many people also find that committing to steady repayment of their debts also helps loved ones and others see them in a new, more positive light. Oftentimes, relatives, friends, and colleagues will start to become more:
- Supportive. Most people like to support and encourage others who are making important, valuable sorts of progress. Being able to tell loved ones about how a debt repayment plan is working will often make them feel invested in the process. The personal support that follows, when it comes from the right sources, can even make it easier to stick to a generally demanding debt reduction strategy.
- Engaged. Some people are inclined to write off friends and acquaintances who fall prey to debt. The strained relationships that result often see debtors turning to excessive spending to ease the pain. Taking responsibility for your debts and paying them down steadily can encourage others to reach out and reconnect. Feeling less isolated will make it easier to keep focused on the target of eliminating debt instead of backsliding.
- Respectful. Wealth is a major determinant of status in most societies today. As a result, people with financial problems are often looked down upon by others. Paying down debt over time will make those in the know more likely to respect you. Being viewed positively in the eyes of others tends to contribute to feelings of empowerment, responsibleness, and personal worth that make it easier to stay on track.
Paying Off Debt Can Transform Your Mental State for the Better
Finally becoming completely free of debt will almost always leave a person feeling relieved. Most will also enjoy heightened versions of the same positive thoughts and feelings that were experienced along the way.
Actually reaching the formerly far-off goal of doing away with debt will also give rise to entirely new psychological benefits. Many people who pay off their debts come to feel a lot more:
- Secure. Having any significant amount of debt will always make you more financially vulnerable. Existing debt limits your ability to respond when financial emergencies or even minor setbacks materialize. Wiping your slate clean of debt will mean becoming better equipped to use financial tools like saving and investment to ensure a more secure future. Having even a modest emergency fund to fall back on and no debts to keep up with will always contribute to welcome psychological feelings of security.
- Optimistic. The negative numbers that characterize debts almost always give rise to negative feelings. Zeroing out all of your balances will do a lot for your mental outlook. People who succeed at paying off all their debts tend to start feeling far more optimistic about the future. Thinking positively but realistically will make it easier to stay in control of a household’s finances in the future.
- Experienced. There is no denying that it can be difficult to get out of debt and that quite a few people fail along the way. Those who succeed, though, gain valuable experience that translates directly into improved mental wellbeing. Being someone who has successfully done away with significant amounts of debt means knowing what all the associated dangers and challenges look like.
- Free. One of the most mentally debilitating things about having a high level of debt is how it restricts you. Deeply indebted people often feel like they cannot afford to do anything other than keep up with the required payments. Completely eliminating debt means doing away with what can easily become one of life’s heaviest burdens. The feeling of freedom that results can liberate you to pursue goals that had been put on hold or even just to enjoy life a lot more.
Retiring most or all of your personal debt will also change how others look at and feel about you. Loved ones and close acquaintances will often start to seem significantly more:
- Trusting. People who struggle with debt can seem unreliable, undisciplined, and self-indulgent to others, even when there is a lot more to the story than that. Being someone who has vanquished debt will encourage others to have more trust and confidence in you. That contributes directly to feelings of self-worth and personal responsibility that make it easier to stay on sound financial ground.
- Caring. Most people recognize that it can be extremely difficult to pay off significant amounts of personal debt. It can also be challenging to care deeply about someone who fails to even make the effort. Succeeding at paying off your debts will eliminate obstacles that might have gotten in the way of meaningful relationships. Even people who are not overly focused on wealth or finances in general tend to feel more positive about those who have proved their ability to take care of themselves and others.
The Undeniable Importance of Getting Started
People who make even a bit of definite headway toward paying off their debts almost always enjoy plenty of improvements to their everyday feelings and overall perspective. Others tend to help out by becoming more supportive, and all of that positivity will help keep anyone on track.
Even when the goal initially seems so far off as to be unachievable, steady, strategic progress will eventually bring it into sight. Paying off the last of your personal debt after a long struggle should always feel liberating, inspiring, and empowering. Once again, the effects on loved ones and other personally important people can be every bit as momentous.
In no case, though, will these psychological benefits be experienced except by actually getting started with a sound, informed debt reduction plan. Knowing that they await could be just what someone needs to finally take action instead of remaining passive.