Paying off debt is a little complicated matter which requires patience and hard work. If you are having a $50,000 debt on your shoulders, with hard work and determination, you can gradually get out of it. But for that, you need to concentrate on earning extra income, reduce expenses and most importantly, managing your finances through a budgeting plan.
People think that having a debt load means the person is a bad money manager and doesn’t know how to spend money in a proper way. For that person, debt symbolizes the sign of failure.
Getting emotional about your debts is quite natural, but it’ll be wrong if you feel embarrassed about it.
So, how to stop being embarrassed and tackle your debt shame? Let’s figure that out here.
1 Identify your character and behavior
You need to distinguish between your basic character and behavior. You might have taken few financial decisions and incurred debt. But that doesn’t mean you should be embarrassed in front of everyone for your mistakes. You need to stop thinking like that.
Those wrong moves might turn you into overspending, and that’s not your character. It’s merely your behavioral flaws.
If you have past history of making wrong calls, that doesn’t mean you are a financially bad person. You must take responsibilities of your wrong decisions. Accepting own misdeeds may help you to motivate yourself in the future.
If you are in debt, it doesn’t mean you are characteristically a debt dweller. You need to understand that it’s just a behavioral issue, which you need to fix asap. So, there’s nothing to be ashamed of, practically.
2 Talk to others
After trying so hard, if you still feel that you can’t manage your overspending behavior and you’re accumulating debts, it might be the best time to talk to someone who can comfort you. Starting from a professional financial planner, you can talk to anybody (friends, colleagues, parents, siblings, etc.) with whom you are comfortable to discuss the reasons for your unnatural spending behavior.
Expressing your emotions about overspending or your huge debt burden may help you to reduce the mental pressure. Discussing your debt problems with people may also help you to get easy solutions. Through the discussion, you might also find the core reasons for your debt problems; in turn, it can help you tackle your debts and overcome your debt shame.
If you don’t like discussing your debts to a person who knows you face-to-face, try a popular online debt community as a resort.
If you look closely, you’ll find many people, just like you, seek suggestions and ways to get out of debt in such online debt communities. Communicate with guys online who have been successful in beating their debts. This will encourage you to take control of the wheel and tackle your debt shame in every possible way.
3 Stop spending
Once you determine how to rectify your wrong decisions, the next thing you should consider is how you must control your spending. Trust me, once your spending behavior is tamed, your debt level will also start stabilizing.
The best initial way to stop spending is to avoid using your credit cards. Incurring new debt will be stopped if you use cash instead of cards while buying things.
Once you avoid using cards and start using cash, you’ll eventually eliminate your spending temptation. It is because your cash resource is limited, so your spending will be automatically restrained.
Cutting off your credit card usage is one of the best ways to stop incurring further debts. But, by just stopping credit card usage, you can't get out of your existing debts. But it’ll surely give you the confidence and practice and help you to forgive yourself for the past mistakes.
4 Set up a debt payoff plan
If you are confident enough to stop using credit cards, that means you are taking the first step to a good debt pay off plan. Now, what will you need to become more confident and less debt ashamed? You need to pay off all of your debts and see those accounts as “Paid as full” in your credit report!
So, how do you make that happen? Select the smallest debt account and pay it off first. Check out how:
a. Check all your debt accounts.
Gather all your bills and categorize them in an ascending order.
b. Select the smallest debt account.
Try to pay as much as possible to that debt to pay it off soon. You also need to pay the minimum payments to all other accounts to keep them current.
Fulfill your basic needs and cut off luxurious expenses like clothing, food, sports, movies and put that saved money towards your debt with the smallest balance.
Try to manage extra funds from different sources. Use gift checks received on any occasion, the bonus received from the employer, or other funds to pay off the lowest debt balance. As soon as you pay off the debt, your total debt amount will start reducing faster.
c. Once you pay off the first debt balance, just move to the next lowest balance.
Pay off debt accounts one by one, from the smallest to the biggest. In the end, you’ll find yourself the winner.
5 Gather knowledge about it
If you look thoroughly, most of your wrong financial decisions are taken due to a lack of financial knowledge and experience. So, if you want to reduce your debt burden and stop being ashamed of debts, you need to educate yourself about money. People who gather knowledge about their financial matters are likely to be confident and can handle debts well.The most effective ways to gather knowledge about finances and credit are:
- You can ask your friends, parents, and even your boss whom you can trust
- You can consult with a financial planner
- You can visit a community college and take classes on financial education
- You can opt for free online courses
If you have the guts to start your financial education as a beginner, it means you’re facing your financial obligations and debts with much more confidence. It means you’re mentally prepared to take the responsibility for your debts. Trust me, that’s not a thing to be ashamed of; it’s heroic.
When you see yourself in the mirror and realize how badly you’ve lost your control over your money habits, that feeling is enough to make you ashamed of yourself. But the bright side is that if you’re feeling guilty, you’ve seen the truth already and understand that your habit needs to stop. The idea is not to make you guilty and shameful for lifetime, rather it’s the trick to get your finances back on track.
When you are aware of the issue and want to get out of debt, it is sure that you are on the right track. You’ve taken two initial steps in your payoff plan, so don’t be embarrassed about it anymore.
With proper help you can
- Lower your monthly payments
- Reduce credit card interest rates
- Waive late fees
- Reduce collection calls
- Avoid bankruptcy
- Have only one monthly payment