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Is Debt Making you Sick? How to Manage the Stress and Your Finances Better

U.S. household debt currently stands at 114.6 percent of disposable income, according to Reuters' calculations based on the Federal Reserve’s “Flow of Funds” report. With some people spending more than they make, many are finding it more and more difficult to keep up with their bills. The strain that causes on your budget is obvious, but what you may not know is that the stress of dealing with debt can also have a significant negative impact on your physical and mental health. From ulcers, headaches, and an increased risk for heart attacks to depression and panic attacks, dealing with debt can literally make you sick.

The steps to better financial and physical health

The best way to lower your stress level is to take a proactive approach to getting a better handle on your finances.   

Make a budget and stick to it. To manage your finances effectively, you need to know how much you make and how much you need to pay for essentials like your mortgage or rent, insurance, utilities, transportation and gas, medical bills, and loans and credit card balances. To get started, gather all your bills and your checkbook to get an accurate picture of where your money goes. If you need help putting together a budget, there are many resources you can turn to, from articles on the Internet to your local library where you can check out many free books on money management to help you get started.  

Creating your budget will take a little time, but it’s the easier part of the solution. Sticking to a budget can be tough, so make sure your new budget is not so severe that you set yourself up to fail. Include some money for entertainment and relaxation, like an occasional trip to the movies. If possible, also put away a little of each paycheck for an emergency fund. Then, if you’re faced with unexpected expenses, such as medical expenses, in the future, you’ll have a financial cushion. 

Cut your expenses. Once you have your budget up and running, it’s time to look for places where you can cut your expenses. You will probably be surprised at the savings you can rack up with a few painless spending cuts. Start with your non-essential expenses.  

  • Are you paying for premium cable? You could save $40 or more by sticking with basic cable. 
  • Review your cell phone bill. You can lower it by limiting extra services like text and data plans.
  • Do you have a home phone? Consider using your cell phone as your main number and cut out the landline altogether.
  • Choose a higher deductible for your homeowners or renters and auto insurance and you’ll lower your overall premium. Also check to make sure you’re getting all the discounts you’re eligible for, like ones for safe drivers, good students, no accidents, having a home security system and more.
  • Spend less on eating out by filling your travel mug with coffee at home and brown bagging your lunch. 
  • Get books and videos from the library (often for free). 
  • Check out consignment stores when you need new clothes. You could also make some money by selling old clothes you no longer wear

Use the money you save by cutting expenses to build your emergency fund or pay down high interest debt. 

Stay on top of what you owe. One of the reasons that people find themselves slipping deeper and deeper into debt is that they just deal with each bill as it comes in and don’t have a clear overall picture of what they owe. You can get a better understanding of your debts and also handle them better by creating a plan to manage your debt. Include all debts, large and small, and make a list of:  

  • How much you owe 
  • Who you owe it to 
  • When payments are due
  • The terms and interest rate of your debts
  • Fees and penalties you pay for missing payments or paying late  

You can use this information to prioritize your debts and make a plan to pay them off. 

Find a partner who can help you manage your debt. Sometimes, even after following all the steps above, you may still have trouble making ends meet. One option is to turn to professionals who can help you find a solution designed to get you back on track financially. There are a number of different approaches to managing debt, including debt management plans, and debt settlement plans provided by reputable debt relief companies such as CareOne.

You can also check with your local Better Business Bureau to find out more about credit counseling companies in your area.

Take time to take care of yourself

While you’re working hard to gain control of your financial health, remember to take time to manage your stress and protect your physical health. Eat nutritious foods, get a little exercise each day to help clear your mind, and get enough sleep. If self-help doesn’t work, talk to your doctor and find out what you can do to keep stress from damaging your health. In the end, gaining control of your finances and taking steps to eliminate your debt can have a positive impact on your overall wellbeing.

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