Chacón helps people who struggle with managing their own debt as well as those who are responsible for managing the debt of their parents, spouses, or other relatives. Her approach combines financial principles with a compassionate understanding of human behavior and psychology.
She and Ashley Agnew, a certified financial therapist and the director of relationship development at the financial planning group Centerpoint Advisors in Needham, Massachusetts, offer advice on how to cultivate a healthier emotional response to debt and feel more in control of your financial situation.
1. Know How Much Debt You Have
The first step in changing your relationship with debt is facing it. If you have several debts — a mortgage, student loan payments, car payments, and credit card bills — print out your most recent statements or copy the balance of each one onto a piece of paper.
Add up the total amount of debt and say it out loud. “If you are lying to yourself, no plan will ever work,” Agnew says. Although a large amount of debt can be difficult to face, Agnew says that confronting the dollar amount head-on, whatever it is, can help reduce your shame about it.
2. Make a Plan (and Consider Seeking Professional Help)
Meeting with an adviser who uses financial therapy-informed planning is the ideal way to reframe your relationship with debt, Agnew says. These professionals can help you create an actionable plan for paying off debt and can also help you understand how debt is affecting you emotionally.
The best way to find this type of adviser is to search the directories of organizations that offer well-regarded certifications for financial therapy, like the Financial Psychology Institute or the Financial Therapy Association. As with other types of financial planners or therapists, the cost can vary greatly.
“If working with such a professional is out of the scope of your budget, there are some great books available, like Mind Over Money,” Agnew says.
3. Recognize That Repaying Debt Will Take Time
Part of deciding on and following a healthy plan for repaying debts is accepting that it will take time.
A financial planner with training in financial therapy can help you figure out a budget that will address your debts without making you feel like you can’t spend money on other things at the same time and enjoy life, Agnew says. You will still need to make choices about spending, but you shouldn’t feel guilty about spending every dollar that doesn’t go toward paying off your debt.
The plan should also address the possibility of unexpected bills and emergencies. “Having a plan for when things go wrong can help you sleep better at night,” Agnew says. Dedicating a small portion of your budget to an emergency fund will lower your stress and can even prevent further debt from piling up.
4. Practice Gratitude for What the Debt Has Afforded You
Chacón recommends practicing gratitude. “When I saw my $70,000-plus debt after completing my MBA, I sighed and called it a blessing,” she says. “I would not have gotten that far in my education without the blessing of student loans.”
There’s an argument for making educational opportunities more affordable and accessible to everyone (regardless of one’s financial background), of course. But Chacón says that looking on the bright side for the sake of managing your emotional health can be helpful.
5. Don’t Think About Your Debt When You Don’t Have To
Pushing your debt out of your mind may be easier said than done, but Chacón says that it’s important not to let financial obligations overtake the joy in your life.
Allocate time to think about your debt: when you’re making your plan and your budget, when you’re actively paying down your debts, and maybe even when you just need an hour every now and then to honor those stressful feelings. Your local credit union or state extension office (resource hubs run by designated universities in each state) might offer free or low-cost counseling or support groups for people in the same situation, which can be helpful.
Outside of these allocated times, try to think as little about your debt as possible. Chacón recommends working on being present. Go outside and feel the sun on your face. Cuddle with a loved one or a pet. Spend time with someone who makes you laugh. All of these things can help you live in the moment, which helps you realize that your life is about so much more than your debt and your finances.