A recent survey has shown that almost 10% of adults in the UK experience hopelessness, while a whopping 34% feel anxious. In 2023, 49% of people said that they were behind in paying their energy bills. These statistics go on to show how tough the current financial conditions in the country are and how they are impacting the mental health of the common people.
The popular idiom says that money cannot buy happiness, which roughly translates that happiness comes from within. However, when you are neck deep in depth or living paycheck to paycheck, money can most certainly be the sole cause of your happiness.
In this blog, we’ll explore some ways in which you can deal with the emotional toll that debt brings. From payday loans to setting realistic goals, we’ll discuss it all in-depth.
Financial Stress and Mental Health
Financial struggle can take a massive toll on every aspect of your life, your physical and emotional health, your relationship with loved ones and even your professional life. When you’re constantly worried about money and the bills that need to be paid, you can suffer from insomnia, irritability and mood swings, depression, anxiety and low energy levels. Some people even resort to bad habits such as alcoholism, substance abuse or gambling.
There is a vicious cyclical connection between your financial situation and mental health. Financial struggle leads to depression and stress. Poor mental and emotional health can make it even more challenging to manage your finances and concentrate at work. This can further make it difficult to solve your financial woes, adding to your misery.
However, no matter how dire the situation, there is always a solution! In this article, we explore how you can get through debt.
How to Get Through Debt & Move Towards Financial Stability
Acknowledge and Accept
The first step towards financial stability and freedom is acknowledging you have a problem and accepting it. Many of us often don’t want to accept that we are in a financial crisis. It is easy to hide the credit card bills, mark financial notices as spam on your emails, and ignore calls from banks until it all comes down as an avalanche.
Once you accept and make peace with the fact that there is a problem, you can seek help and look for a solution.
Communicate
Being in debt can lead to social isolation and strained relationships with friends and family. However, it is important to confide in trusted people and have open communication. If you are married and have children, then your financial state will impact the lives of your spouse and children. Thus, it becomes crucial to discuss your financial situation.
Your loved ones can provide you with an alternative perspective, offer solutions, and even extend help. Moreover, instead of hiding from your bank and credit card provider, it is best to have an open and frank conversation with the officials. This can help you to work out a mutually acceptable solution towards clearing your debt.
You can also seek help from professionals, like accountants, financial advisors, and therapists.
Set Realistic Goals
The next step towards financial stability is to set realistic goals. This includes a practical timeline for paying your bills, loans and credit cards. It is also important to factor in money for your monthly needs—grocery, transportation, rent, utility bills, etc. Instead of trying to pay all your bills in one go, consider paying your debt by following either of these two methods.
- Avalanche Method: In this method, you prioritise paying off the debt with the highest interest rate. First, pay the minimum amount for each loan/credit card debt that you owe, and then pay an additional amount towards the debt with the highest interest rate.
- Snowball Method: In this method, you pay off the smallest amount first and then subsequently move towards the larger ones. Begin by paying the bare minimum amount towards all your debts. Next, put the extra amount towards the smallest debt. Once it is paid off, you move towards paying off the next credit. This method can keep you motivated, as you find yourself closing one loan after the other.
Switch to Cash
We often end up spending more when we don’t use cash. It is very easy to just swipe your credit card or scan your payment wallets, like Apple Pay. However, you will soon find your savings account dwindling and the credit card bills accumulating. To prevent this, make a monthly budget, take out cash, and set aside the funds according to your needs.
Prepare for Emergencies
Even when you are working hard to pay off your debt, it is important to consider contributing towards your emergency fund. If you have already exhausted your emergency fund in paying your bills, then start a new one as soon as possible.
If you require some extra cash at the end of the month to tide you over until you receive your next paycheck, consider taking out payday loans. These are smaller amounts, short-term loans, which can be paid back once you get your next salary.
Embrace Healthy Habits
While you work towards paying off debt or supplementing your income, you must also pay attention to your mental and physical health. Debt can take an immense toll on your overall well-being.
Here are some quick tips to take care of yourself:
- Start with light exercises and walking. Dedicate at least 30 minutes in a day towards this.
- Eat nutritious meals. Choose home-cooked alternatives over takeout.
- Start mediating and journaling. In addition to this, breathing exercises, positive affirmations, and yoga can help you calm yourself and feel energised.
- Get enough sleep. Prioritise your sleep and try to get a minimum of 5-7 hours of sleep. This will help you concentrate and be more productive.
Wrapping Up
If you are struggling with money problems, you are not alone. By accepting your situation, creating a financial plan, and sticking to it, you can find your way out of the economic sinkhole. Remember, it’s okay to seek help from your family, friends or professionals to get through the difficult times.