Guest Post: How to Actually Deal With Debt

One of the subjects we talk about most frequently on The Financial Diet, and have been hearing about at every stop of our book tour with Mint, is dealing with debt. It’s one of those things that can loom over a person like a sad, dark cloud from a ‘60s comic strip, making everything they do feel like more of a challenge (and more of an obligation), even things which the debt doesn’t technically effect. We recently heard from a viewer on our YouTube channel, who wrote in asking for advice in dealing with her massive student debt from an emotional perspective. (It weighs on her so heavily that she panicked in the middle of an otherwise-great date, overrun with the fear that he would find out that she is basically strapped with a mortgage-worth of loans and no clear way to pay it off before she’s near retirement age.) It’s one of those questions that doesn’t just remind you of how all-consuming debt can be, but shows that the real issue for most people day-to-day is the emotional side of it: the anxiety, the shame, the guilt when doing anything that feels “frivolous,” which, when you’re paying off six figures of debt, can entail essentially anything else in life.

TFD is a place where the personal side of money is always explored first, and debt feels like one of the most crucial places to speak with a much more emotionally nuanced language. Because ultimately, if we don’t look at these decisions in terms of their human meaning — if we don’t think about what each dollar means to us in terms of joy, future value, and peace of mind — the numbers on a loan statement or in our bank accounts can start to feel simultaneously overwhelming and meaningless. When I asked TFD readers for their debt stories (both living with it and repaying it), one reader wrote to me,

“I used to think of my debt in terms of ‘the biggest mistake I ever made.’ I’m one of those sad statistics: someone who got a really expensive graduate degree and basically doesn’t use it. I was on several different debt repayment plans throughout my 20s that made me feel hopeless, and because of the field I work in, I knew that there wasn’t going to be a light at the end of the tunnel in terms of having more money for basically the rest of my young adult life. I watched all these big dreams I’d always had — a house, kids, semi-frequent travel — go Slam! Slam! Slam! Like doors in the hallway of my life.

When my dad died, I went to a therapist for the first time in my life to talk about my relationship with my mother, because I wanted it to improve in his absence. We ended up talking primarily about my debt, and working with [my therapist] was the first thing that really changed my view on it. She taught me that rather than constantly beating myself up about having made that choice at 21 is pointless, and that I should look at it as an Value-Neutral Truth of my Life. I owe money, but it is not who I am. The money I spend repaying it is not money I am robbing myself of, it was never mine to begin with.”

And maybe that’s one of the most key elements of the “getting out of debt” equation: realizing that, ultimately, this money you owe is totally value-neutral. No matter your individual strategy to pay off what you owe, the endeavor can’t be an emotionally-loaded one. When I finally paid off the credit card debt that had tanked my credit at 18 years old and haunted me for several years after, I was only able to do it because I’d stopped running from it, and stopped fearing it. I’d stopped dodging the collection calls, stopped feeling an acute feeling of embarrassment any time a remotely financial subject arose, stopped thinking of all the things I was excluded from doing because of my absurdly-low credit score. I became cold about it, because ultimately, a few numbers on a sheet of paper are a cold thing. I made a conscious choice that “freedom from this debt, and a rehabilitated credit score, are more important to me than this other stuff I’d like to buy with the money I’m using to pay it off.”

But part of that becoming “neutral,” emotionally, about your debt, is realizing that the life you might be constantly (even unconsciously) reaching for — the life of someone at your income level, but without your level of debt — is something you can’t constantly be fighting against. If your taste level is somewhere you can’t afford, and your brain is perpetually convincing you that you “deserve” the things that will cost you debt repayment, you are destined to feel deprived and bitter. One of the readers who wrote about her personal repayment story put it this way,

“We poured nearly all of our expendable cash made into our debt (while setting aside some for an emergency fund). This strategy contrasted pretty heavily with all of our peers who, for instance, were enjoying $500 dinners at Alinea and purchasing extravagant handbags to celebrate their new jobs. This extends beyond just controlling spending to also adjusting our standard-of-living – our housing situation is fairly low key and costs well below our means. But hey, as of today, we are actually an entire year debt-free!

Our strategy was far from perfect and had a lot of drawbacks. We were cash-poor for that period of time in which we were working shiny new jobs, and we of course wanted to celebrate that as much as the next person. So it required real discipline on the spending front. But overall, I am really proud of our work. Now we now feel incredibly free to leave our high-paying but extremely time-intensive and, let’s be real, boring, jobs and can pursue things we find interesting.”

Making the choice to live below your means requires an active rewiring in your mind, a resolution that where you are living is not “below” anything at all, but rather exactly where you need to be to accomplish what you want (in this case, getting rid of your debt). And while that approach might feel cold or detached on its surface, it’s really just an acknowledgement of all the fraught emotion that is usually such a huge part of this process, and actively deciding to reject it. (Similarly, the hit that Lauren and I took when we left our stable, decent-paying jobs and decided to start a business required a recalibration of what we felt our lives should look like.) But getting steadfast about that shift means that you don’t have to live under its thumb in terms of guilt, shame, or resentment. Living with your parents to maximize debt repayment, or going to community college to save money (raises hand!), or making any other decision that someone might judge on its surface but which is deeply right for you is the only way to live. Because you are ultimately the person who needs to live in your life, with your bank account, and within your day-to-day budget. Debt does not have to be that dark cloud, but in order to blow it away, you have to acknowledge it for what it is, head-on. You have to look in the face of all that fraught emotion, choose to laugh at it, and choose to move forward with your life.

Chelsea is the co-founder of The Financial Diet, a media company for women who want to talk about money. She tweets.