Debt: a problem that can be solved

Published: 13/05/2015 and written by Natasha Krovak

The link between debt and stress is well established, and with good reason.  When faced with the realisation that you owe money but have no idea how to pay it back, the difficult prospect of having to somehow confront and conquer your financial problems can prove to be an overwhelming task, especially if you don’t know where to start.

It’s therefore no surprise that stress has the biggest impact upon a person’s mental health when they are dealing with debt. The debt-free advice charity StepChange estimates that between 50-90% of people have experienced mental health issues as a result of their debt.  In a survey of over 4,000 clients, StepChange found that people in debt developed feelings of stress, worry, being overwhelmed, ashamed and desperate, all of which can compound the financial problem further.

Debt - a problem that can be solved
Debt – a problem that can be solved

Finding a way out

As a responsible lender, we believe that seeking help and advice about your debt is something that should be actively encouraged. We want to dispel the misguided perception that people struggling with debt will be subjected to shame or ridicule for revealing their financial problems. We believe that debt is a problem that can be solved, and with the right tools at your disposal you can feel empowered to take back control of your finances. That’s why we’ve put together these simple steps to help alleviate some of the stress around the uncertainty of what to do next, and help you regain control of your finances.

Firstly, admit to yourself that your debt has become a problem

This step is probably the most crucial.  Without accepting the fact that you are in debt and need help, your financial problems are liable to continue spiraling out of your control, which can lead to more stress and other mental health issues.  In order to tackle the debt, you first need to face it.

Speak to your creditors

You might be surprised to learn that lenders don’t want their customers to be in debt, and are there to help any customer who is experiencing financial difficulty. Talking to your creditors about your debt is another step towards taking back control of your finances, helping to relieve some of the burden and stress created by initially ignoring the problem and trying to manage it all yourself.

Talk to someone

The old saying “A problem shared is a problem halved” is worth heeding. By talking to someone about your debt and sharing your financial worries, it can hugely benefit your mental well-being by helping reduce stress levels.

There are a number of debt advice organisations available for you to choose from:

  • StepChange: 0800 138 1111 (freephone) | A full debt help service
  • Citizens Advice: 03444 111 444  |  Full debt and consumer advice service
  • National Debtline: 0808 808 4000  |  Free debt advice charity
  • Debt Advice Foundation:  0800 043 4050  |  Debt advice and education charity offering one-to-one advice
  • Debt Advisory Service: 08000 191 278  |  Free confidential advice for serious debt problems, both personal and business.

Put a plan of action in place

Debt advice organisations are a fantastic resource that can help you to start solving your debt problems.  As well as free advice and support, they can help you to structure a plan of action that should allow you to start managing your debt and budgeting your money properly. StepChange’s Debt Remedy is an online tool that can provide expert advice on your financial situation.  It takes less than 20 minutes to complete and will provide you with solutions specifically tailored to tackling your debt, as well as creating a personal budget plan. It will also provide you with advice on how to deal with your creditors.

Create a budget and stick to it

Not only is a budget a financially savvy thing to have, but it can also boost your mental well-being.  Having a budget in place removes stressful ‘unknowns’ and gives you the confidence to know that the control of your finances is now firmly back in your hands.  Budgeting is a proactive way of empowering you to manage your money, and if you stick to it, it can help to prevent you from falling back into debt.

See our blog on budgeting for more money saving advice.