With the cost of living crisis and high interest rates, talking about debt has never been as important as now. It’s why I’m so passionate about my ongoing partnership with debt management app, Incredible, and why it’s vital to share more insights around debt. Founder Yas and I had a 25 minute chat about our own experiences with money which you can watch over on YouTube.
In a recent survey of both Incredible and How I Fund This‘ communities, 40% of respondents stated that their main financial goal is to become debt free. But it was clear that the impact on mental wellbeing was significant with the majority of responses referring to the mental load that surrounds debt. And it isn’t just the mental load of having debt; it’s the fear of never being able to pay it off, or being worried about falling back into debt afterwards. Being able to gain peace of mind around money and debt was evident in the responses, and as brands who care strongly about financial wellbeing, we knew we had to write about it.
While debt doesn’t define who you are, it’s understandable why so much weight is placed on it. That’s why we wanted to share actionable tips on how to change your mindset around debt.
1. Improve your financial knowledge
Knowledge is king. Arming yourself with knowledge on debt can help to lessen the mental load. Thankfully, there’s a wealth of resources at our disposal. We love podcasts such as The Broke Generation and All Things Money (both podcasts are available on other major players), as well as Radio 4’s Money Box which is an excellent way to keep up to date with the latest personal finance news. Debt charity, StepChange’s website is another superb resource with information on all manner of debt topics such as the debt collection process, and different debt solutions.
2. Remember that you can still enjoy life and pay off your debt
One mistake that we see time and time again when people are tackling debt is the temptation to remove all non-essentials from their budget until they’re debt free, or until they have reached a certain point in their debt journey. But cutting out all enjoyment from your life while you pay off your debt isn’t going to help you in the long run. Instead, create a realistic budget that factors in your debt repayments and some fun money. It doesn’t have to be a lot – and look at areas you can cut down to make room for it – but having it can help you feel less restricted by your money and feel more motivated. It also acts as a reminder that you’re in control of your money, not the other way around.
3. Seek out debt stories
While money is no longer the taboo subject that it once was – just look at the many online and print publications that now include articles on work and money, and the rise of personal finance content creators – being in debt can feel lonely. You might have feelings of shame and embarrassment, or possibly that nobody will understand. Finding articles and real life examples of people in debt is proof that people do understand and they can serve as inspiration for your own journey. Incredible’s Debt Stories is a series that showcases experiences around debt shared anonymously.
4. Accept that it might not be straightforward
In response to our survey, many respondents cited that they were worried about getting back into debt or never being able to pay it off. While we might see ‘being debt free’ as the end goal, life isn’t so simple that once we’ve paid off our debts that we’ll never be in debt again. Life throws curveballs that no amount of forward planning can anticipate, we might be taking on debt for a good reason, or maybe our circumstances and priorities change. A lot of the time, there are factors to play that are outside of our control. Accepting that our personal finance journeys aren’t truly linear can help us to place less weight and pressure on becoming debt free.
5. Talk it through with a professional
Talking about the money you owe can help you to improve your debt mindset. You might choose to talk it through with a trusted loved one but don’t underestimate the power of a professional. We often think this will cost us a lot of money but that’s not always the case. The likes of Citizens Advice and StepChange offer free debt advice; there’s nothing that they haven’t heard before and they’ll be able to talk you through your options based on your circumstances. Charities such as Mind and Samaritans are also on hand to listen without judgement, and to provide a safe space to feel heard.
No amount of practical advice on money management and the mindset around it will negate the often overwhelming external factors that can contribute to debt in the first place. Soaring food prices, wage stagnation, and economic downturn to name a few. But we hope that these tips can help you to feel in the front seat of the elements that you can control.
Incredible is an app in the UK on a mission to rewrite the rules of how consumer credit works by providing people with a single place to track, pay and optimise their borrowing. Through automation, optimisation and education, they take away the stress that debt causes. Incredible is a long-serving and trusted partner of How I Fund This. Download Incredible from the App Store today.
