Break the habit: I've spent myself into debt

Getting into deep debt causes more problems than just financial troubles. The effect on your mental health and relationships can be devastating. Follow this advice to break the habit of overspending once and for all. 

What damage have I done?

man with credit card

Money worries can have serious health consequences. In one telephone survey of 3,121 women and men, half admitted to having stress about money, 23 percent said their anxiety was severe and 12 percent called it overwhelming.

The damage? Survey-takers said financial stress contributed to high blood pressure, depression, insomnia, headaches, digestive disorders, aches and pains, ulcers, excessive smoking and drinking and gaining or losing weight.

Debt is strongly linked with poor mental health—more so than low income as such, according to a study at the Institute of Psychiatry in London. Among 8,580 people assessed, those with low income were twice as likely to have a mental disorder (psychosis, neurosis, alcohol or drug abuse), but the association with income vanished when debt and other social variables were taken into account.

Of those with a mental disorder, 23 percent were in debt compared with just 8 percent of those without a mental disorder, and the more debts people had, the more likely they were to have a mental disorder, even taking account of income and other variable factors.

Read more: Savings tips for those who struggle to save

 

Can I undo the damage?

Yes, but let's be honest: it's not going to be easy.

Getting yourself out of debt is analogous to losing large amounts of weight: it takes time, the process can be hard on your ego and your lifestyle, you must be constantly vigilant and it's easy to revert to old habits. But for those who manage to succeed—and many do—the results are stunning.

You are going to feel more in control of your life with less stress and fewer worries. You'll be able to sleep better, stop overeating and have fewer headaches. Finding ways to focus on the simple joys in life will help to improve your relationships

Read more: How to clear your credit card debt quickly

 

Your repair plan

frozen credit card in ice debt tips

  • Learn about money management
    You can't master your money if you don't understand the rules and methods of personal finance. Find a straightforward book, magazine or website and learn all you can about credit cards, mortgages, electronic banking, budgeting and investing.
  • Put your credit cards on ice
    Literally. Put them in a cup, add water and place it in the back of the freezer so you can't use them. It will stop you increasing your debt immediately.
  • Create a budget
    How much money is coming in each month? How much are you spending on essentials and how much are you spending on frivolous purchases? An hour of honest assessment can go a long way.
  • Pay at least the minimum due each month on bills
    Pay more than the minimum on your highest-interest credit card. After you pay that off, move to the one with the next-highest interest.
  • Automate good money habits
    Have your wages paid directly into your account and bills paid automatically from it; have small amounts automatically diverted to savings accounts. Use technology to help you to manage your money.
  • Change money priorities
    Banish shopping as a form of entertainment. Instead, go for a walk, take up a hobby or meet friends. Identify what you want to spend money on in the future?

 

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