Keeping up with accumulated debt is not a cinch, and getting to grips with your finances is even more challenging. You revise your budget, make sacrifices, set goals, and turn over a new leaf, and yet you feel like your efforts are going down the drain. Consequently, you feel overwhelmed by snowballing debt, which evokes a feeling that you will never be able to get it settled. This is called debt fatigue. It is real and experienced by everyone sooner or later.
However, debt fatigue is also experienced when a large amount of money is paid towards interest and a very small amount towards a debt itself. This practice is extremely common with car loans and mortgages.
The diminishing amount of debt you owe is like a motivation for you to keep going. The burden eases off, and finding yourself getting closer to your settlement goal encourages you to work even harder to be absolutely debt-free.
Debt fatigue makes you feel desolate and depressed. It will keep you awake at night and make you feel completely dejected whether you ever will be able to settle your unpaid accounts. This is particularly common when you experience no noticeable reduction in your debt amount despite significant changes to your lifestyle.
Many people mistakenly believe that debt fatigue is the result of shame that you experience due to owing an inordinate amount of money. The reality, on the contrary, is that sacrifices over time evoke indignation and disappointment, and yet your efforts take you nowhere.
Ways to overcome debt fatigue
The most common response to debt fatigue is avoidance. It involves paying the minimum balance and employing a more rigorous approach to settle outstanding debt obligations. As a result, the total debt size is aggregated.
Another method is halting savings unless you have settled all of your unpaid accounts and get back to your old habits when emergencies crop up. The next time, you will end up owing a remarkably high amount of money.
Both these responses are not appreciated, nor are they recommended. Even though debt settlement seems elusive, you cannot desist from making payments. You can combat debt fatigue with the following strategies:
- Brace yourself
You are well aware of the fact that unforeseen expenses cannot catch you off guard at any time, and car repair and attic repair are some expected expenses. Anticipate such expenses and make them part of your savings goals. Every month, you should stash away a little money for the unexpected. With saved money, you will not have to turn to direct lenders for financial help. When there will be no added amount, you will be benefited with their assistance.
- Focus on the overall picture of your finances
Because you have accumulated debt, it does not mean that you will ignore other financial goals that need your attention. You need money to deposit your car or get a mortgage. In addition, you will also need to stash away money for retirement.
Ignoring your retirement savings in order to settle your outstanding debt will not help you at all. Again, you will find yourself borrowing money and ending up with a constant cycle of debt. Next time when you borrow money from a private money lender in Ireland, you will qualify for it at higher interest rates. Your financial situation will be all the worse.
Putting all your energy into debt settlement will make you depressed because you will not see any financial progress. The lack of savings will make you more anxious. But when you build your savings along with debt payments, you will not be hysterical thinking that your debt is holding you back from making headway.
- Seek assistance
It can be too overwhelming to pay off your debt when your budget is blowing up under its weight. Ideally, experts recommend using debt avalanche or debt snowball techniques to reduce the amount you owe. You may even combine all your outstanding debts by taking out one large personal loan; however, your credit score must be stellar.
Unfortunately, sometimes, all of these options do not sound functional. You are advised to talk to your lender. They would reexamine your financial condition and might propose another repayment plan that suits your current financial condition.
Make sure to talk to your lender before falling behind on payments because they will quickly increase the size of your debt. Lenders appreciate promptness. They go to great lengths to help those who do not abnegate responsibility.
- Avoid incurring more debt
As long as you do not discharge your debt, you should not avoid borrowing more money. Taking out a small loan can even throw you deeper into an abyss of debt. The constant cycle of borrowing money will never allow you to get out of it. You will have to break the cycle of debt, and for that, you will need to take the following steps:
- Cut back on your expenses. Ban discretionary expenses, and if your budget still needs wiggle room, you should figure out ways to cut back on essential expenses. You can do it by downsizing your lifestyle.
- Patience is a virtue. Focus on debt payments, but do not ignore saving for emergencies and retirement. Your overall financial picture should be better and motivating when you manage debt payments along with other financial goals.
- Increase your income sources and utilise the extra money to pay debts. Consider getting a part-time job or a side gig.
- Do not use your credit cards. Instead, use cash for all transactions because it helps you keep tabs on your expenses.
The final word
Debt fatigue is a condition when you feel overwhelmed by an exponential amount of debt. You feel isolated, depressed and anxious because you notice no progress despite chipping away at your other expenses.
Fortunately, there are some good strategies to reduce the burden of debt. The aforementioned tips will certainly help you get back in the driving seat. However, you will have to adhere to them unless your whole debt is repaid.
