Debt affects our lives in different ways. Understanding the true cost of debt can help you begin living a more balanced life, and as your trusted financial freedom coach, Meru Mentor is here to help.
From credit card and college debt to car loans and mortgages, debt is easily accessible for most people — sometimes too easily. When we spend too much money, we find ourselves in big trouble.
The accumulation of debt seems to be part of the American way. The social pressure of buying a nice car, wearing nice clothes, and owning a large home makes it easy to see why the United States has $980 billion in credit card debt and $1.6 TRILLION in student loan debt.
Unfortunately, what many don’t know is the cost and stress of debt aren’t just financial.
The Obvious: The Financial Cost of Debt
We can easily calculate the financial cost if we choose to. Our monthly statements show how much interest we are paying each month. That interest payment, especially on credit cards, means we cannot afford to buy other items we want or need, often leading to even more debt each month. These financial costs are relatively easy to calculate.
The Hidden: The Emotional Cost of Debt
However, many don’t often calculate the emotional cost that debt brings with it. Not being able to pay off bills, save money for emergencies, or afford healthcare will directly impact our relationships and our ability to generate income. Not surprisingly, financial challenges, with debt being a significant factor, are a leading cause for divorce.
Our emotional state often affects our physical well-being and overall health. When people are unable to afford healthcare, their financial issues dramatically increase. The spiral is vicious and may feel never-ending.
How Does Debt Affect Everyone?
Financial and emotional debt impacts people at all income levels, including high-earning professionals.
Consider, for example, a doctor who accumulated hundreds of thousands in school loans and then purchased a medical practice for millions. High earners are often trapped into buying more items, even when those items dramatically increase their debt load. Purchasing can become a vicious cycle that results in overwhelming debt.
Those who earn less have fewer opportunities to address their debt, resulting in even more emotional stress. Add to that the challenges of fewer resources and a lack of negotiation skills, and many people find themselves settling for mediocre salaries with long commutes.
Addressing Emotional Debt
How can you emerge from the emotional stress and begin chipping away at your accumulated debt? Financial coaching and mentoring from Meru Mentor can help you find the solution.
Change Relationship with Money.
Do you feel like money controls your life? When we change our perspective and take control, financial issues will decrease. That may sound puzzling or too optimistic, but how we view money is critical. One important area to address is spending money on items and expecting it to result in happiness. While many experiences and purchases may temporarily increase our happiness levels, the emotional returns are not what we anticipate. This unnecessary cycle continues, and our financial status decreases negatively, impacting our emotional health.
Address Money Traumas.
All of us are born into existing money traumas. This means we end up mirroring and carrying our parents’ money traumas and poor financial responsibility. Addressing money trauma helps alter our relationship with money.
Live Balanced – Not excessively or Frugally.
Just like spending too much, eliminating all spending can also harm people. Finding balance is key. Understanding your money personality will help support that balanced life we all desire.
Live Your Life.
One of the most critical mistakes people subconsciously make is trying to impress others. Let your friends and neighbors live within their means while you live within yours.
Addressing Financial Debt
Reevaluate what you need to buy vs. what you want to buy. Food, shelter, transportation, and phone service are the basics.
Email campaigns, TV commercials, and the internet will always bombard us with advertisements for new and better items. Protect yourself from this temptation by unsubscribing from promotional emails and turning off the television. Remember, deals come and go but purchasing a sale is still an expenditure.
Discover a Life of Financial and Emotional Freedom
Financial stress is difficult and impacts our emotional and physical state. Addressing the key points below is a great first step to learning how to handle your finances and avoid more money stress:
- Understand the source of financial stress
- Know emotional triggers that make you spend
- Reduce exposure to advertisements
- Avoid comparisons to others
Ready to learn how to balance your life holistically? Schedule a free discovery call with Meru Mentor today, and discover what financial advisor coaching can do for you!
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