Become Debt-Free

How to stop obsessing over your debt, according to experts

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If you're constantly obsessing about money, you're not alone. Nearly three-quarters (71%) of people with debt think about their financial burden more than they'd like to.

That's according to a 2019 study from The Ascent, which surveyed 1,007 people with varying levels of debt. When it comes to how often they're mulling over their bills, 28% say they think about the money they owe every single day, followed by 20% who think about their debt "almost every day" and another 20% who do so "several times per week."

While it's a good idea to set a plan and keep an eye on your debt while paying it off, there's a point where existing in a constant state of worry could end up hurting your mental health. And stressing over your bills won't make them disappear any faster.

"When paying off debt interferes with seeing the big picture, it's too much," Douglas Boneparth, president and founder of Bone Fide Wealth, tells CNBC Make It. "Those who treat debt as a cardinal sin are likely being too extreme in their view."

The key to finding out if you're putting yourself through an unreasonable amount of stress is to realistically evaluate your financial situation in relation to the level of attention you're giving it. To get started, consider these four steps from financial experts that can help you get a grip on your debt-driven emotions.

1. Realize that debt is often a part of life

Don't assume that just because you have debt, you're bad with money. If that was the case, most everyone would be considered financially irresponsible at one time or another.

In 2018, American household debt landed at an all-time-high of $13.2 trillion, according to Debt.org. Those in debt under 35 carried an average of $67,400 and those in debt between 36 and 44 carried an average of $135,768. This debt stems from a variety of sources, including mortgages and student loans.

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Many Americans are willing to take on some form of debt in order to advance their lives. If you're paying off a home, student loans or have made a beneficial purchase by way of credit, it's often considered an investment in your future.

Credit can be a useful tool, Boneparth says. "When used properly, it can be very powerful," he explains. "The goal is not to eliminate debt, but to learn to use credit responsibly and productively."

2. Consider how much debt you actually have

It's not that you shouldn't be concerned about carrying debt. Sometimes, feeling stressed can serve as a motivator toward becoming debt-free. But if you aren't overspending or being irresponsible with your money, you shouldn't feel like you have to constantly berate yourself over your bills.

To find out if you're being unnecessarily hard on yourself, look at how much money you owe in relation to your income. You can do this by solving for your debt-to-income (DTI) ratio, which is a metric lenders often use to see if you'd be a trustworthy borrower. But it can also serve as your own personal debt metric — even if you aren't applying for a loan.

To calculate your DTI, divide your monthly debt payments, including your credit card bills, mortgage and car payments, by your gross monthly income. If that number comes out to 36% or higher, lenders consider that a high risk debt load, according to Bankrate. If it's between 15% and 35%, you should still consider ways to reduce it.

When debt is interfering with achieving your financial goals, it's too much. If you are unable to also save for an emergency fund or financial independence, you need to take a close look at how you're managing your cash.
Douglas Boneparth
President and founder of Bone Fide Wealth

In addition to measuring your DTI, you can also look at your money management habits. If you're regularly having issues keeping up with your monthly credit card bills or are frequently looking to transfer your credit card balance to a new card, such as one with a 0% APR interest rate, "you probably have too much debt," explains Ryan Marshall, a New Jersey-based certified financial planner.

And if your debt is so high that it's "interfering with you achieving your financial goals, it's too much," Boneparth says. "If you are unable to also save for an emergency fund or financial independence, you need to take a close look at how you're managing your cash. If you're accumulating debt each month, something's wrong."

3. Ask yourself whether you're making progress

Ask yourself: Are you doing everything possible, given your circumstances, to work toward becoming debt-free? If so, you shouldn't have to continually obsess over money.

Signs an individual is making real strides toward eliminating their debt include "paying above and beyond the standard payments and continuously looking for ways to save money so they can pay off their debt sooner," Boneparth says.

One way to get out of debt more efficiently is to contribute any extra income you can. "If your mortgage payment is $1,200 per month and you add an additional $100 per month to the payment, you would be making an extra payment by the end of the year," Marshall says. "This extra $100 per month could shave off four years of payments and thousands in interest."

It's also important to acknowledge that moving toward owing less sometimes requires sacrifice. If you're not making progress, you may have to get a side hustle to earn extra money or sell material items you no longer need in order to pay your bills, Marshall says.

Simple changes, such as bringing a packed lunch or making your own coffee, are "smaller adjustments" that can "add up over the course of months or years," Marshall says.

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Shutting down any unnecessary, negative thoughts during your debt journey is a lot easier if you celebrate your small victories, stick to your plan and practice patience.

Contribute what you can and recognize that "every little bit helps," Marshall says. He adds that very rarely is becoming debt-free an overnight occurrence: "In the age of Google, Netflix and Amazon you can get whatever you want almost instantly, but some things take more than a couple clicks of a button."

If you're practicing all or some of these strategies and you're serious about eliminating your debt, there's no need to be hard on yourself, Marshall says. Just keep working steadily toward your goal.

4. Consider the "why" behind your debt

Some of life's biggest decisions, such as buying a house or attending college, often come with a good amount of debt. However, if you remember why you wanted to be a homeowner or get an education, it's often easier to accept that these kinds of investments are meant to benefit your future self.

"If the debt helped make you more money or will eventually save you money, then you shouldn't worry about it," Marshall says. "One of the best investments you can make is an investment in yourself."

Just make sure to choose carefully when deciding where to put your money. "If you pay a few thousand [dollars] for training and now your income potential is going to increase by $10,000 to $15,000, it was a good move," Marshall says. But, "if you go out and pay for training that you will never use, that is another story."

Keeping your "why" in mind when thinking about your debt can help you maintain a far more positive outlook. And an optimistic mindset will help your repayment process feel more worthwhile and less discouraging, Marshall says.

"Maintain a positive focus. Most people are drawn to the negative," Marshall says. "Take inventory on the positive the debt may have provided you with. When your mindset is grateful and positive, you won't feel stressed."

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