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8 Tips to Stop Being Ashamed of Your Debt and Take Control

What would you be more embarrassed to shout from the rooftops: your weight or your credit score?

The National Foundation for Credit Counseling conducted a poll asking participants to finish this sentence: “I’d be most embarrassed to admit my…” Perhaps surprisingly, a whopping 37% of respondents answered that their credit card debt was the most embarrassing, followed by 30% of respondents admitting they wouldn’t want to fess up to their credit score. Weight made only 12% of people sweat and came in a distant third place.

If you’re tired of debt hanging around your neck, it’s time to retake control and pay it off permanently.

Why Shame Is Counterproductive

You might think that debt shame isn’t such a bad thing — after all, if you feel bad about it, you’re less likely to incur more, right? Unfortunately, it’s not so simple.

When consumers feel a deep sense of shame, guilt, and embarrassment over debt, an opposite effect can take place. Instead of curbing spending and improving debt payoff rates, the embarrassment causes debt to fester unacknowledged and keeps consumers from getting the help they need to take control of their finances. Furthermore, a study published in The Economic Journal found that people with “problem debt” (defined as debt that is burdensome) are more likely to suffer from mental health issues such as anxiety and depression.

You obviously made choices to put yourself in a position of debt, but berating yourself for those choices doesn’t solve the problem. Remember that overspending and going into debt aren’t character flaws or signs of stupidity, but behavioral issues. Financial guru Dave Ramsey put it succinctly: “Debt is not a math problem. It’s a behavior problem.”

There’s nothing inherently wrong with you. As with so much else in life, the first step is simply acknowledging you have a problem, so you can start solving it.

Tips to Take Control of Your Debt

No one likes feeling like they don’t have control over their financial situation. And nothing leaves people feeling financially powerless like spiraling debt.

Take these steps to wrestle back control over your bills and finances, and get back on track for your long-term goals.

1. Stop Digging

When you want to get out of a hole, the first thing you need to do is stop digging it deeper.

Cut your credit cards in half, or lock them away in a drawer somewhere. Erase saved cards from online shopping sites.

From now on, you can only spend the money in your actual checking account. No new debt balances allowed!

2. Plan and Prioritize Your Debt Elimination

It’s all too easy to feel overwhelmed when you look at a half dozen debts and wonder how you’ll ever repay them all.

So? Start with one.

As for which one, start with either your smallest debt or your highest-interest debt. Then follow either the debt snowball or debt avalanche methods of paying off your debt.

In the debt snowball method, you put all your monthly savings into paying off your smallest debt first. Once you pay that off, you then put all your spare money into the next smallest debt, then the next smallest, and so on until you’ve paid all debts in full. With each debt you pay off, you have more money to put toward the next one: hence the name “debt snowball.”

The debt avalanche method works the same way, except you prioritize your debts in order of interest rate rather than balance.

If you don’t know which to try, follow the debt snowball method. It provides a quick win to boost your morale as you pay off your first debt in full.

Note that you don’t necessarily need to pay off your home mortgage or your auto loan early. Just knock out high-interest unsecured loans like credit card balances, student loan debts, and personal loans. And use a debt payoff calculator, like this one from Tally, to make sure you’re not paying more than you should as you trim down your debts.

3. Revisit Your Budget

It’s time for some tough love: if you’ve accumulated significant debt, you probably have a broken budget.

That doesn’t mean you need to beat yourself up. It does mean you need to fix your budget.

Begin by creating a new budget in Google Sheets. Don’t worry for now about your current spending — draft your ideal budget unencumbered by your current expenses.

Only after you’ve set a target, then review your current budget and spending categories. Don’t feel discouraged by the wide gap between your current and target budgets. It takes time and effort to bridge that divide.

Start with the low-hanging fruit — the easy but small spending habits. Try cutting these 12 simple costs to save over $13,000 each year. But note that for the greatest savings, you need to change your structural spending on big expenses like housing, transportation, and food.

4. Set Up Automated Payments

We humans only have so much self-discipline and motivation. It runs out or fails us all the time.

So don’t count on self-discipline to do the right thing. Automate it so it happens without you having to set calendar reminders or tie strings around your finger.

Set up automated recurring debt payments for all your debts. Most of these can be your minimum monthly payment, but for whichever debt you’re targeting for fast payoff, set up automated payments to coincide with your paychecks. Every payday, money should automatically leave your bank account to pay down your debts. It leaves you with no wiggle room, no excuses, no way to spend more than you have.

As soon as you pay off that debt, switch over your automated payments for the next target debt. It’s that simple, and you’ll be surprised how quickly you make progress toward becoming debt-free.

5. Track Your Progress Monthly

It feels disheartening, watching all your extra money fly out the door with nothing tangible to show for it.

Which means you must make your progress tangible.

Each month, track your debt balances in a single spreadsheet. It doesn’t have to be fancy, just one column with the debt name, and another with the remaining balance. Only include your unsecured debts for now, and leave your home mortgage and auto loan out of it.

As you watch your balances shrink month after month, it will show you hard proof that your work is paying off, and reinforce your resolve.

6. Find an Accountability Partner

One way to trick yourself into saving more money is to check in every month with an accountability partner.

One study reported in Entrepreneur magazine found that simply committing to a goal out loud to a friend boosted participants’ odds of achieving it by 65%. Those who checked in regularly with a friend about their progress nearly doubled their odds of success, with a 95% increase.

Keep it simple. Once every week or month, touch base with your accountability partner for a quick phone call. Share your progress — as tracked by your spreadsheet described above.

7. Increase Your Income

Budgeting works wonders. High earners who spend every penny don’t build wealth. Full stop.

But at the same time, earning less money means less room to save. Which means you should attack the problem from both sides, simultaneously spending less while earning more.

Earning more money could mean negotiating a raise or changing jobs for a higher salary. Or it could mean picking up a side hustle, whether in the gig economy or starting your own business on the side of your full-time job.

Just make sure you put your higher earnings toward paying down debt, rather than lifestyle inflation.

8. Boost Your Financial Literacy

The more you know about personal finance and investing, about all the ways you can put money to work for you rather than vice versa, the faster you’ll not only escape debt but build true wealth.

Surprising no one, there’s a well documented link between spending habits, and financial literacy — for example, a study published in the Journal of Economic Psychology. People with low financial literacy are more likely to spend compulsively, use credit, and suffer from changes in income or unforeseen events.

Take time to educate yourself about money. Financially literate people don’t count themselves among those ashamed of their credit report or card statements.

Start simple with free financial newsletters. Read personal finance blogs (cough, cough) and listen to financial podcasts. Talk to friends and family members who know more about money than you do. Speak with a financial advisor if you want professional financial advice.

Most middle-class Americans know little about money — and have no idea what they don’t know.

Final Word

You can’t build wealth while straddled with high-interest debt. While you’re paying 24% interest on credit card debt, it makes no sense to invest in the stock market for an historically average 10% return.

But once you shed the yoke of your debts, you can start funneling money into building true wealth. You can start building passive income streams, start working toward financial independence, start designing your ideal life.

You can waste mental energy feeling embarrassed or ashamed. Or you can acknowledge that you’re only human like the rest of us and you made some mistakes, and start taking steps to climb out of debt so you can start working toward your long-term financial goals in earnest.

G. Brian Davis is a real estate investor, personal finance writer, and travel addict mildly obsessed with FIRE. He spends nine months of the year in Abu Dhabi, and splits the rest of the year between his hometown of Baltimore and traveling the world.