If you’ve ever experienced a sudden wave of panic after looking at your bank or credit card statement, or a sense of dread stopping you from opening it, you certainly aren’t alone.
A new study from comparison site KnowYourMoney has suggested that as many as 14 million people are taking a hit on their mental health as a result of debt-related stress.
The research found that around 70% of us are in some form of debt, and while some of us are OK with the level to which we are in the red, that certainly isn’t the case for everyone.
More than two in five (41%) said it was causing their mental health to deteriorate, while a quarter said they didn’t feel in control of their debt.
These struggles are spilling out into everyday life too, with one in four (26%) saying debt has caused them to argue with a loved one in the past year.
John Ellmore, director at KnowYourMoney, suggested that debt is still seen as “something of a dirty word” in the UK, but argued it was important to start a “national conversation about debt”.
He added: “Not only will this prevent concerns becoming pent-up, it will encourage consumers to share useful advice about managing debt effectively.”
It’s good to talk
The good news is that there are a host of charities that specialise in helping people with debt. And even better, they won’t charge you for their services.
StepChange Debt Charity
Debt Advice Foundation
The Money Charity
Obviously they all work slightly differently ‒ some will discuss your situation online or over the phone, for example, as well as face to face ‒ but in each case they will help you work out the best route forwards.
Putting a plan in place
There are steps that you can take immediately which will help you move in the right direction towards tackling your debt, no matter how large it may be.
For starters, it’s always a good idea to go through your bank and credit card statements so that you know exactly where your money is going each month.
This can be very effective in flagging up those areas where we are clearly overspending, which could be things like eating out or memberships which we don’t actually use.
But don’t just stop there ‒ check precisely how much interest you are being charged on your debts too, whether that’s an overdraft or credit card.
What can I afford to spend?
Next you’ll need to put a budget in place, outlining precisely how much you really can spend each month.
There will be certain essential bills that you can’t do a huge amount about, but equally you may be able to trim things like your energy bill and grocery spending by shopping around and switching who you use.
This approach should be applied to the debts too ‒ have a look around to see if you can move your debt to a cheaper deal.
If you’ve got a chunk of debt on a credit card for example, then you may be able to move it to a balance transfer card which doesn’t charge interest on your balance for a set period.
As a result you’ll be able to make payments each month in the knowledge that every penny is going directly towards cutting the cost of your debt, rather than on interest charges.
It’s important to remember that you may not be able to clear everything in one go ‒ if you’re in serious debt, then getting back in the black will take time.
But recognising that you are making progress in getting your debt under control should provide a boost, both financial and mental.
Looking after your mental health
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Of course, while tackling the debt itself is a good idea, it’s also important to focus on your mental health as well.
Just as debt can lead to mental health issues, the reverse is also true ‒ mental health problems can push people further and further into the red.
An excellent place to start is with the free ‘Mental Health and Debt 2019’ guide from MoneySavingExpert .
It doesn’t just touch on where ‒ and when ‒ to get advice on tackling your debts, but also how to approach mental distress.
This includes the wellness and recovery action plan (WARP), which helps you monitor your wellness and outline steps you can take to stay well.
This might include making an agreement with your partner that you will hand over your credit card if you start feeling unwell.
As well as the guide, there are a host of mental health charities that are also worth speaking to, including the likes of Mind and Rethink .