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Your Guide to Overcoming Debt Shame

overcoming debt shame

Ugh, the dreaded “D” word. It’s more unpleasant to bring up one’s debt situation than a significant other (or lack thereof) or problems at work. There’s certainly a jumble of emotions that come with debt: anger, resentment, and anxiety, for starters.

But here’s the thing: You aren’t alone in your ill feels. In fact, 7 in 10 Americans think that having credit card debt bears a stigma, according to a NerdWallet survey. Deep down you know that feeling a jumble of shame will do you no good. And by moving past these negative vibes, you can take ownership of your financial situation, and finally make headway on crushing your debt load. (Yes, it’s entirely, super duper possible!)

How to hurdle over debt shame? Here are a few pointers:

Know You’re Not Alone

Last we checked, your bestie, family, neighbors, boss, and the bus driver of your morning commute are most likely in debt.

Let’s look at some numbers, shall we? In 2018 the total consumer debt in the U.S. has climbed to $13.29 trillion, according to  Federal Reserve. If we’re breaking it down by household, the average American household debt looms at $137,063. So being ashamed of your debt is like thinking you’re the only person in the room who has ever endured a bad breakup, or ever absentmindedly left the house without brushing their teeth. Pretty much everyone is carrying some form of debt.

Don’t Equate Net Worth With Your Self-Worth

This rings true even if you’re Scrooge McDuck-ing it and swimming in your bank vault brimming with coins. Whether your net worth is in the flush or negative, it shouldn’t affect how you feel about yourself. “You are not your debt, and your self-worth should not be conflated with your net worth,” says Melanie Lockert, founder of Dear Debt and Lola Retreat. “It doesn’t mean you’re a bad person. It doesn’t mean you’ve failed.” 

So how can you turn your mindset around? Instead of linking your debt with how you feel about yourself, think of debt as resulting from a cluster of events. It’s not necessarily a character flaw, and it might be purely situational. Maybe you lost your job, and resorted to using your credit card to cover bills. Or you were blindsided by a series of unexpected expenses, or perhaps you were depressed and used retail therapy as a means of escape.

We know it’s tough, but the more objective you can be about your debt, the easier it will be to get over that shame. So instead of thinking “I’m a loser because I have debt,” think: “I have debt, I own it, and I’m going to do something about it.”    

Practice Forgiveness

Whatever the case, debt happened. And it’s done and over with. Don’t beat yourself over it. Don’t think that you’re forever doomed. The best thing is to accept the situation and create an action plan (which we’ll get into in just a bit).

Seek Confidants

While your gut reaction is to bury your debt in secrecy, do the brave thing: talk about it openly. Share your situation, how much debt you owe, what happened, and your feelings about it. It’s cathartic. Chances are, others can relate. And you’ll most likely commiserate with one another. 

If you don’t feel comfortable sharing with friends or family, find solace by joining a Facebook group.  There are plenty of personal finance FB communities, such as Making Sense of CentsFuck Off Funders,  and Money + Happy, where people confide in their money concerns and seek advice. It’s a safe, support place rife with wounded healers (aka those who have been there and want to help). Others are more than happy to lend a happy ear and offer pointers.

Drum Up an Action Plan

First, tally up all your debt. This includes credit card balances, medical bills, car loans, and personal loans. Next, figure out how exactly how much you owe, and the interest rates and terms on your debt.

Next, come up with a repayment plan. Figure out when you’d ideally like to pay off each debt, and how much you can reasonably afford. Next, look for ways to slash your spending. For starters, reach out to your service providers and try negotiating down your bills. Is there any way you can reduce housing, food, or transportation costs?

The flip side of spending less is earning more. Look for opportunities at your day job to add value. When your year-end review rolls around, you’ll have good reason to ask for that generous raise. If you can swing it, pick up gigs to rake in extra dough. Be a rideshare driver, petsit, or get paid to do online surveys. Remember: every bit counts, and can go toward a debt-free, future you.

Channel Negative Feels Toward Repayment

Whatever negative emotions you carry about your debt — despair, shame, regret, anger — sublimate it into positive action. No need to bury your head in the sand or have a dark cloud of shame looming overhead. Next time you get work overtime, toss that earned money into paying off your debt. 

Conversely, visualize what life would be like when you’ve paid down all your debt. Zipping around congested roads in your shiny new Vespa? Chilling at a beach while sipping Mai Tais? Buying groceries at the bougie market without abandon? Populate a Pinterest inspiration board, or create a vision board at home.

The proof is in the pudding. An experiment conducted by Common Cents, a financial behavioral lab, reveals that when you structure long-term goal setting around visuals, you’ll be able to connect with your goals in a more meaningful way.  

Share Successes and Failures

You’ve most likely seen celebration posts on social media when someone’s paid off their student debt. You can revel in similar fashion once your debt is paid off. But why wait to celebrate at the end? Celebrate the milestones, too. 

Are you feeling stuck? Did you miss a payment? Not far along as you liked? Get real and share challenges you face along your debt payoff journey.

By overcoming debt shame, those negative emotions raging inside you will distill into a mild annoyance. And who knows, maybe that day will come when fully realize that you’re not alone, and you make peace with those negative vibes.

by Jackie Lam

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