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We won’t mince words here: being in credit card debt can be an absolutely miserable, soul-sucking stress hurricane. When you’re struggling to keep up with a bunch of different debt payments, debt can seem like it controls your mind, always hovering around in the background, waiting to remind you that your money is not your money and your future has long since been mortgaged.
It can be enormously difficult to distance yourself from this kind of stress and force yourself to relax. After all, how are you actually going to go about making yourself happy? In the short-term, you are broke and short of an irresponsible credit-backed spending spree, where are you going to find the funds necessary to treat yourself and give yourself a break? In the long-term, how can you possibly plan for a happy future when all of the traditional markers of success (your own home with a white picket fence, a two-car garage and plenty of time for vacations) have been put so far out of reach by your creditors that it makes your head spin?
We understand this kind of thinking. Anyone who has ever dealt with a sizeable amount of debt in any form can attest to gut-wrenching depressive spiral that can be triggered when you finally work up the courage to calculate just how much you owe.
Be optimistic, though: we have good news. It is perfectly possible to deal with your credit card debt and still be happy. There are only two simple steps to the whole process. First: make a plan to deal with your debt so it doesn’t cripple you with anxiety. Second: devise a responsible, affordable approach to self-care so you can treat yourself without breaking the bank.
Let’s start with item number one: making a plan to conquer your debt.
How to Actually Deal With Your Debt So You Worry Less
Have you ever heard the cliche that “proper planning prevents poor performance”? It’s a cliche for a reason: it’s true, even when it comes to something like your debt.
Most people drive themselves nutty worrying about their debt because they feel like they’re incapable of handling it. To them, debt feels like a force of nature, thrust upon them by some merciless third-party. They feel as if they have very little power to eliminate debt for good.
Luckily, that’s just not true. You are perfectly capable of getting out of debt, and if you take back this feeling of control and intention, chances are you’ll worry much, much less about your finances and be much more capable of joy, happiness and everything else in life that’s good.
There are four basic ways we’d recommend to take control of your debt and your financial future: budget, strategize and, if all else fails, ask for help.
1. Make a budget
Making a budget sounds easy because it is easy. Almost everyone over the age of 11 (and even some high-roller kids younger than that) knows that making a budget is day one table stakes for getting a handle on your finances. That goes double if you’re in debt and need to make sure that you’re being financially responsible.
Yes, everyone knows to make a budget. The reason we put it on this list is that so few people actually do it and do it well.
Making a basic budget is simple. Fire up your spreadsheet program of choice (Excel, Google Sheets, etc.) and start entering some data. Kick things off by entering your monthly income (if you’re salaried, this is easy; if you’re an hourly employee, make your best guess). Next, start to deduct all of your expenses for the month. Your fixed expenses, like your rent, car payment, and your minimum debt payments, should be easy enough to tally up. Variable expenses, like groceries, utility bills and gas for your car are tougher, but you should be able to come up with a fair number for those, too.
Whatever’s left over after you deduct your expenses is surplus cash that can be put to a wide variety of uses. While you can do whatever you want with your own money, we’d strongly recommend splitting those surplus funds up into three different buckets. A chunk of that money should be put into a savings account, at least until you build up a sizeable emergency fund of $1,000 or more. Another chunk should be put towards additional debt payments that you can strategically make to help yourself get out of debt quicker (we’ll get to the details of that strategy in a minute).
Lastly, you should set aside some money each month for recreation and fun. You’re a human being and you deserve to splurge a little bit on yourself, at least to retain your sanity. Setting a limit within your budget helps you to ensure that you don’t go too over-the-top with it.
Now that you have a budget in place, the hard part is following it. It takes discipline to track your finances and control your spending - after all, who likes to tell themselves no? - but following the limits that you’ve set is vital for your long-term financial health.
2. Devise a debt repayment strategy
Coming up with a strategy for paying off your debt in an expeditious, cost-effective way is vital for keeping yourself happy when you’re deep in debt. Strategy doesn’t just make your debt repayment dollars go farther - it helps you to set priorities and create a feeling of control over your financial future that can keep you sane when “debt-free” seems impossibly far away.
There are two popular strategies that many individuals in a lot of credit card debt tend to gravitate to: the debt snowball and the debt avalanche. They’re relatively similar in philosophy, but both have their pros and cons.
With the debt snowball, you identify the debt that you have with the smallest overall balance and focus on paying that off first. Remember that surplus money you identified when you made your budget? Paying off this debt is what you put it towards. Above and beyond your mandated monthly minimum payment, you pay extra, reducing the balance much more quickly and reducing the overall amount of interest that compounds each month.
You choose the debt with the smallest overall balance so that you can pay it off quicker, increasing the amount of surplus cash you have left over each month. As you pay off more debts, that surplus amount begins to grow and your debt repayment efforts begin to snowball, allowing you to devote more money to paying down debts without making further cutbacks in your life.
The snowball also gives you the “victory” of eliminating a debt as quickly as possible, which can help to motivate you to stick with your debt repayment strategy for the long haul.
The debt avalanche follows the same basic approach. You identify a debt to focus on and concentrate your repayment efforts for maximum effectiveness. Instead of focusing on the debt with the smallest balance, though, you focus on the debt with the highest interest rate.
The thinking behind the avalanche is that, at the end of the day, your goal is to pay the least amount possible to get out of debt. By eliminating high-interest debts first, you reduce the total amount that you’ll pay your creditors in interest over time. High-interest debts tend to have larger balances, however - it can be a long time before you really feel like you’ve made a dent, which can be demoralizing.
The strategy you choose is up to you. What’s more important is having a strategy at all. Without a strategy, you’re likely going to be making payments willy-nilly without priorities or milestones to keep you on track. A strategy keeps you focused, lends you a sense of control and allows you to get out of debt much faster than you’d be able to otherwise.
3. Ask for help
Have you tried it all and still feel like you’re not making any progress? If you can’t find the funds to make a debt repayment strategy work well on your own, then it can be tough to feel good about the effort that you’re putting in.
Luckily, there are still plenty of options out there for individuals who might need a little bit of help to get out of debt.
One of the most popular options is debt consolidation. With debt consolidation, you consolidate all of your various debt payments into one single monthly payment. Often, this payment is much lower than the sum total of all your monthly minimum payments and accrues much less interest over time, saving you money in the short term and the long term.
There are many different forms of debt consolidation out there. Some people approach their bank or credit union for a personal loan that they can use to pay off all of their debts at once. Others take out new credit cards with zero percent APR promotions and use those cards to pay down their debts, then pay off the balance of the card over time, interest-free.
A less common but still effective debt consolidation method entails working with a debt consolidation company to pay into a savings account over time. You stop paying your debts and pay into the savings account instead. Once you’ve built up a sizeable chunk of change in that savings account, the company takes that money and uses it to negotiate with your creditors, offering them a lump sum payment in exchange for forgiving the rest of your debt. You’d be surprised how many creditors are open to this.
Whatever you do, make sure you trust the company you’re working with. There are a lot of bad apples out there, so make sure you check their reviews to make sure they can do what they claim to do.
How to Stay Happy and Practice Self Care on a Budget
Okay, you’ve taken control of your debt payments and you have a plan for getting out of debt. The next question: while you’re paying off your debts, how do you make yourself happy?
People tend to equate self-care with going out and spending a bunch of money on expensive things without sweating the consequences. It goes without saying that, if your finances are precarious, this is irresponsible.
Luckily, there are plenty of ways to practice self-care that are free or low-cost. Here’s a quick list:
You don’t have to shell out for an expensive gym membership to exercise. If you’re feeling blue, force yourself to go for a jog or load up a quick exercise routine on YouTube. Exercise releases endorphins, keeps you occupied and, of course, helps you to stay healthy.
Mute social media
You can drive yourself crazy scrolling through Instagram. It seems like everyone else in the entire world is flush with cash and on vacation without a care in the world. They aren’t, but resentfully liking their selfies isn’t going to make you feel any better about your financial circumstances. Give social media a break for a few weeks. You’ll be glad that you did.
Wouldn’t it be great if we could all have jobs that made us feel good about our purpose in life? Unfortunately, that’s rarely the case. Volunteering, though, is much more accessible. Volunteering with an organization that you find meaningful can be a way to reclaim your sense of purpose in life and put your financial situation into perspective
Do nothing at all
We tend to feel like any time we have that isn’t occupied by something - even meaningless distractions like cell phone games - is wasted. We might actually feel guilty if we aren’t using our time actively, no matter what we’re actually doing with it.
That feeling is useless and counterproductive, though. Sometimes, laying back and doing nothing is exactly what you need to recharge your batteries.
Not to mention that it’s free. If you’re in debt and need to stay happy, sometimes all you really need is to make a budget, kick off a debt repayment strategy and then reward yourself with a nice, relaxing session of nothing at all.