Debt Management

The Three Ugly Faces of Debt Problems

I recently met with a couple in their early-40’s with two young children. I could feel the stress and tension enter the room before they even took a seat in my office. If you’ve ever been around friends that were obviously not getting along, you probably recognize that feeling as all positive energy exits the room the moment the couple in distress enters. This couple’s debt-related stress was not just affecting their relationship, it was starting to impact their friends. Even more potentially devastating, debt-related stress was starting to take a toll on their physical health and well-being.

The presence of debt problems affects more than just the individuals dealing with debt. Money-related stress can create additional conflicts that impact relationships with spouses, other family members, and even our friends and colleagues. Similar to most problems that go unaddressed over long periods of time, financial problems related to debt will only compound if not eventually dealt with. This is undoubtedly the case with all forms of problematic debt (e.g., credit cards, personal loans, installment loans, etc.).

Introducing the Three-Headed Debt Monster

Debt can lead to what I’ve referred to in the past as the “Triple Whammy” effect or a “Three Headed Debt Monster.” If you are currently feeling overwhelmed with debt, you can probably identify with a few of these potential problem areas. If you’ve “been there, done that” and have already taken control of previous problems with debt then you most likely identify with that awesome sensation of realizing what it feels like to eliminate problem debt from your life. That feeling alone can motivate us to take steps to avoid any future debt problems.

The Three Ways Debt Impacts our Lives

The presence of debt affects more than just the wallet. Debt problems can also create an increased risk of health problems, psychological stressors, and social pressures. Taking control of our financial lives can improve relationships, help us feel healthier, and enhance our relationships.

Unfortunately, my experiences working with people dealing with debt has shown that we all have different approaches to addressing debt. Some people are ready for change while others are still in the stage of denying that a problem even exists. Sometimes the acknowledgement that debt impacts more than just our ability to accomplish personal financial goals can provide an added incentive to take steps to truly address debt-related concerns.

Here are some of the common problems associated with debt that often take the form of a Three-Headed Monster (I know it’s a cheesy title…but just like debt, monsters can be scary and the bad ones need to be eliminated):

  •  Health Problems– Being in debt is associated with an increased risk of digestive track issues, migraines, and even heart attack. Other related problems are high blood pressure, insomnia, lower back pain or tension, and concentration problems.
  • Psychological Problems– Anxiety and depression can result from financial stress.
  • Social Problems– Marital tension and debt stress have a negative impact on relationships in general. Trouble focusing on work can also result in poor productivity and increased problems at your workplace.

A life without debt may seem difficult to imagine if you are one of the millions of Americans struggling to meet current financial obligations. The reality is that debt will not go away on its own and good intentions will not magically erase debt from our lives. The most successful strategy is to take action immediately and create a debt management plan that puts you in control of your financial future. Looking for some simple yet effective strategies to eliminate debt from your life? Here are some tools and resources to use during your mission:

  • Complete a debt inventory or use account aggregation tools such as Mint to assess your total financial situation.
  • Review your personal spending plan and examine how you can get out of debt sooner
  • Attack your debt with the highest interest with extra payments and track your progress using the Debt Blaster calculator or personal finance apps.
  • Consider seeking professional guidance or credit counseling if the debt appears too difficult to manage on your own
  • Most importantly, have a written plan and always stay focused on the end result of becoming debt-free.

Prior to transitioning to a virtual office at home, I used to commute to work and on the drive home would frequently listen to callers to personal finance guru Dave Ramsey’s show proclaim their “financial freedom.” Listeners can experience the genuine excitement from the people that have committed to a life-changing plan to remove bad forms of debt from their lives. As a financial wellness professional, I feel blessed to have these same cathartic conversations with the people I work with on a regular basis.

Some people celebrate paying off high interest credit card debt with a simple family date night or a rewarding vacation (paid for using cash of course). Others may choose a more elaborate scheme such as using those old credit cards for target practice on the shooting range or as part of their Fourth of July fireworks show. Whatever the method of celebrating debt freedom may be, the biggest rewards go beyond the financial aspect of debt. The ultimate reward of dealing with debt issues may actually be the removal of the “Three Headed Debt Monster” from your life and that may have a long-lasting influence on your overall health and well-being.