Debt fatigue

Debt fatigue is the overwhelming, exhausting, sense that as hard as you are working to pay down your debt, it will never actually happen.  It can range from a sense of stagnation, to frustration, and even anger and reactivity.  You may be under the sway of debt fatigue if you’re feeling:
Shame
Hopeless
Stuck
Frustrated
Anxious
Worried
Reactive
Avoidant
Apathetic

Approximate read time for this article: 12 minutes

The Weight of Debt Fatigue

Burnout from debt can make it nearly impossible to keep yourself motivated and to keep on forcing yourself into restriction and frugality.  Debt stress takes an emotional, and sometimes physical toll.  It can be difficult to trust ourselves with all of that expectation.

Imagine Life Without Debt Fatigue

What would that look like?  You’re still paying down your debt, but in a way that works FOR YOU, and in a way that doesn’t leave you feeling trapped or like a failure.  Maybe paying off debt has actually become fun, like a kind of game.

What would you be able to do now that paying off your debt isn’t a source of constant stress?  What would you be able to accomplish that you can’t accomplish now.

Here’s what some of our clients have said as they learn different ways to pay off their debt without stress or fatigue:

“We’ve got a better plan for paying off debt now… it doesn’t feel like a hardship anymore.”

“I had no idea how deeply emotional debt (and trying to kill debt) was for me.”

“I’ve been told so many times that debt is evil that I guess I believed it… when I was able to change the way my brain thought of debt I was able to be much gentler on myself and FINALLY see some progress!”

“Weirdly, when I was able to stop worrying about paying down my debt I could actually CARE about it and that made it so much easier!”

Overcoming debt fatigue doesn’t mean magically paying it all off overnight or even restricting yourself, it’s about learning to trust yourself to pay it off in a way that is sustainable for YOU.

The steps outlined in this article can also be found in the free, printable “Debt Fatigue Workbook” available here:

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Your Path to Relief from Debt Fatigue

Optional prep:  Develop a safety plan

For most of us, debt is deeply emotional, and even beginning the process of tackling it can itself be fraught with anxiety and worry.  If the idea of facing or even revisiting your debt is making your heart pound in your chest right now, I strongly recommend setting out a safety plan.  

Safety plans are widely used in the mental health world around domestic violence and suicide prevention, but can be useful even for low-grade or chronic stress around debt and money.  

Most safety plans are comprised of a few things: 

1.  How to identify when you are feeling stressed out or overwhelmed
2. External resources you can use
3. Internal resources you can use
4. People or organizations you can turn to for help

You’re welcome to follow the safety plan guidelines from the link above or follow the safety plan in the Debt Fatigue Workbook.

Step 1: Change your mindset around debt

Debt IS emotional, even though we’ve all been told, (and tell ourselves) that money is just a tool and shouldn’t be emotional.  It is, though.  And we live in a culture that vilifies being in debt while making it shockingly easy to get into debt.  I’m sure you’ve heard popular financial “gurus” talk about how evil debt is.  The implication is that if you are in debt, there is something wrong with you too.  That knee-jerk compulsion to kill all debt, is emotional too, and that reactivity can cloud our decision making and put us under further pressure.

Debt is neither good nor bad.  It is a financial instrument, just like life insurance or a municipal bond.  You are not good or bad for having debt, or leveraging it.  

Dispensing with the emotionally-laden language around debt is a great first step to changing your mindset around debt.  How you pay off your debt needs to be customized to your life, there is no one correct way to do this.  And anyone who tells you that is likely trying to sell you something.   

Debt serves a purpose

Or it served a purpose for you in the past.  Recognizing that debt provides something to us is important to reframing our relationship with debt, because it means we are evaluating the debt, NOT you.  

Acknowledging that you are stressed about your debt is important too.  We also get messages from our environments that we should have unlimited, perfectly sustainable motivation and willpower to “do whatever it takes” to kill that debt.  That instinct too, is deeply emotional as well as simplistic. 

It’s also easy to pass judgment on ourselves for choices made in the past.  And while the past IS important because it informs where we are right now, ruminating on shame or judgment for past choices is not productive.  It’s easy, I’ll grant you that, it’s just not helpful.    That worry, though, sucks, and really feels like we’re doing something, ANYTHING to resolve the pain of debt.  So let’s take a closer look at worrying about paying off debt vs caring about paying debt off.

Add some of your own worry and care indicators in the workbook.

Pendulation

The idea behind pendulation is simple:  intentionally moving back and forth between your worry condition, and your care condition.  Let’s say you notice you’re on the worry side of that chart.  Maybe you’ve noticed that you’re hyperfocused and feel out of control.  Great! 

We’re never going to get rid of worry, and probably shouldn’t try.  Worry is just the jumping off point.  So jump over to the “care” side of the chart.  Pick one thing, just one, off that side, and practice being that for just a few minutes.  Let’s say you pick “learn from the past, not live in it” and then spend a few minutes thinking about how you’ve learned from your past.  It’s important to do this WITHOUT shame or judgment.

Then move back to the “worry” side of the chart.  Spend a few minutes in perfectionism, let’s say, and then move back to the “care” side of the chart.  Back and forth back and forth.  By intentionally moving yourself from one of these conditions to the other, you are practicing mindfulness and resilience.  You’re also making it easier to move over to the “care” side in times of extreme stress.  Get your reps in!  This takes practice!

Step 2:  Examine your debt story

What kinds of stories are you telling yourself about debt?

Our brains naturally use storytelling/narratives to process, remember, educate, and entertain ourselves and others.  But the stories we tell ourselves ABOUT ourselves influence how we react to the world.  Your money story, and your debt story specifically, is deeply important to how successful you’ll be in paying off that debt and only taking on debt in the future that serves you well.

We recommend working through the prompts below on paper, or you can find them in the Debt Fatigue Workbook.

Debt story questions:

What beliefs, narratives, and messages have you heard or internalized about debt?

For each of those narratives, ask yourself these questions:

-On a scale from zero to ten (zero being not at all certain, 10 being completely certain), how certain are you that this narrative is true?

– What is this narrative trying to protect you from? If this narrative has a purpose, what is it?   What is it trying to motivate you to do/not do?

-What are the actual, negative outcomes of this narrative?

-Look for some other options (not better options): What are some other ways you could get some or all of the protections without some or all of the negative outcomes?

Step 3: Your personalized debt payoff plan

Quick disclaimer:  Any strategy for paying off debt is best done within an existing, personalized, adaptive budget/spending plan. More on this in a bit.

Step 1: Gather information

Before you begin playing with debt payoff strategies, gather information on your debts (interest rates, payoff balances, monthly payments)

If you need to, you can run a credit report to get information on anything you might have in collections as well.

Step 2: Choose the right debt paydown strategy FOR YOU

There are multiple ways to structure how you pay down debt, here are a few examples and the pros and cons of each.

Avalanche- pay down highest interest rates first

Pro-likey to save the most on interest

Con- difficult to build momentum, if the highest interest rate debt is also the biggest, it can take years to see any progress, which may lead to falling off any payment strategy, which may inadvertently lead to more interest accrued.

Snowball- lowest amount first

Pro- great for building momentum, as you’ll likely see more success early and find it easier to keep going.  Snowball can end up feeling like a game!

Con- possible to end up paying more on interest. How much more?  That depends on the composition of your debt.

Waterfall- higher priority debts are paid off first

Higher tiered (either highest interest rate or most important) debts are paid off first (interest and principal) while all other debts only get interest paid, once the first debt is paid off, the next one is paid off, etc.

Pro- You get to decide which debts are most important

Con- it can be frustrating just paying the minimums on the debts that aren’t the current focus, which can lead to the whole structure breaking down.  

There is no one correct way to pay down debt.  What kind of debt you have, interest rates, and balances change from situation to situation, so finding the best way to pay off your debt may require some initial experimentation.  My clients and I use this free calculator:

https://www.calcxml.com/calculators/restructuring-debt?skn=38

Pay off debt within a customized, easy-to-use, adaptable framework (i.e. budget). 

Paying off debt should be a strategy WITHIN the larger strategy of your budget.  Just trying to comply with a premade budget template will not be enough.  The composition of your debt is just as unique as your goals, your spending priorities and your desires, so custom-building a budget that thoughtfully prioritizes debt payoff is critical.  Also watch out for a budget that is either too restrictive or too loosey-goosey.   You need structure to carry forward your goals, but flexibility to handle emergencies, opportunities, and change in general.

Mandatory:

Each time you pay off a debt, you MUST celebrate.  This is not negotiable. 

Step 4: Restriction is bullshit: practicing expected spending, not restricted

Let’s do a thought experiment:

Imagine you are the Human Resources Department Head for a Fortune 500 company. Every two years the CEO and CFO get together and make a plan for the company. And every two years you get an allotment of money to do your HR work. These two years you’ve been given 10 million dollars for HR. 

Rather than spend that 10 million, however, you decide you’ll be a frugal department head and only spend 2 million. Do you think you would keep your job?

More than likely you would not. That 10 million dollars had a job to do, and spending just 1/5 of planned spending would probably put the company in dire straits. Money has a job to do.

Practicing giving money a job and practicing expected spending (not restricted) is critical to paying down debt and financial health.

Expected spending is also less emotional than frugal/restricted spending, which over time leads to better and better decision making. The opposite of frugality isn’t willy-nilly, free-for-all, unrestricted spending.

The opposite of frugality and restriction is thoughtful, intentional spending.

Only by practicing thoughtful spending can we get to a holistic, integrated, healthy relationship with our money.

A game to practice expected spending: Target Spending

1.Choose a small, variable part of your spending:
Good examples: coffee, ice cream, clothes, eating out
Not so good examples: mortgage payment, utilities

2.Choose a fairly short time frame:
Between two days and two weeks

3.Choose a specific dollar amount.

Example: “I’m going to spend exactly $17 on ice cream in the next 10 days.”
“We’re going to spend exactly $42 on towels in the next 2 weeks.

Not so good example:
“I’m going to spend up to $24 on pencils tomorrow.” (this is restriction)

Game play:

Your job is now to spend EXACTLY that amount of money in that time. No more. No less.

We want this to remain a game, not a budget, so that’s why we’re keeping the time frame and scope of spending fairly tight. And this is just a game. So if you spend more or less, does that really matter?

Nope, because this is just a game.

You are now practicing expected spending. That $17 (or whatever amount you choose) has a specific job to do.

As you play this game what do you think you might notice? Do you think it will be easy or hard to spend exactly that amount on that specific thing in that specific amount of time?

There is a dual purpose to this game. First it’s to practice expected spending rather than restricted spending. Second is to begin to trust yourself with money.

Step 5: Saving as you pay off debt

There’s some traditional financial “wisdom” out there that says you shouldn’t build savings until you pay off your debt.  The reasoning that’s typically used here is that you’re paying a higher interest rate on your debt than you could earn in most savings accounts.  

Why this is bullshit:

Savings is the anti-debt.  I realize that accounting for interest rates is important, but we can get highly reactive and emotional when we optimize for ONE thing.  The preoccupation with interest rates can feel like the only one correct way to do this, but without savings, we will likely fall right back into the debt cycle again and again.  

Savings not only prevents debt, but it is functionally our financial resilience.  

Building savings while paying off debt is critical not just because it may prevent future debt, but it is a constant reinforcement that you can be trusted with money.   I have just two recommendations on building savings while paying off debt for you here, but you can find more about how to stay motivated while building savings here.

Suggestion 1: Build savings slowly.  The slower savings is built, the more likely it is to stay put.  I don’t care if on paper it looks like you should be able to save $500 a month, start with $50.  After a few months, revisit that dollar amount and if it feels comfortable, bump it up to $75 or $80.  

I often get pushback on this because “what’s the point of saving if it’s such a small amount?”.  My response is typically that savings is useless to you in the future if it’s not saved, and if you’re committing big chunks of money to savings and then pulling it right back out again, you’re not building savings regardless.

Suggestion 2:  Give all of your savings a specific job.  Just calling it “savings” or “emergency fund” is not enough.  How would you know when to use that savings?  How would you know when not to? 

FAQs

Q: Why does debt feel so exhausting?

A: It’s a combination of reasons, I think.  First, compound interest.  The more we have in debt, the higher the interest rate, and the longer we are in debt means that debt grows (compounds).  This is the dark side of compound interest.

Secondly, our own expectations of ourselves.  These can be unforgiving.  The shame around debt compounds just as viciously as the actual interest rates.

Q: Can debt fatigue lead to depression?

A: Only a qualified mental health professional can diagnose depression, but yes, debt fatigue can lead to, and amplify depression.  It can hurt to keep trying and keep caring, and eventually we may slip into apathy and depression.  BUT, you have the tools above to help!  If you feel like debt fatigue is leading to depression, please seek a qualified therapist.

Q: What is the right debt payoff strategy?

A: The one that works for you.  Ya, I realize you’re probably looking for a plug-and-play system, but if that worked, you would have found it by now and it would be working.  Building a customized strategy to fit into YOUR life takes time, but it makes paying down debt so much easier, ultimately.

Q: What’s the one thing I can do to quickly pay off debt?

A: Surprisingly, it’s not restricting yourself or even budgeting.  The one thing you can do to move quickly and smoothly through this process is to be gentle with yourself.  I know that seems like I’m asking you to abdicate responsibility, but nothing could be further from the truth.  By accepting ourselves we make it easier to adapt our routines, find patterns in our behavior, and evaluate the choices we make, not ourselves.

In Conclusion

Regardless of the messaging that you’ve received throughout your life, debt is not evil.

And debt fatigue isn’t a sign you’re failing—it’s a sign you’ve been pushing through something incredibly tough, and a great indicator that the system you’re using to pay off your debt is likely not working.

Exhaustion, frustrated, or even straight-up pissed about your debt?  I get it. That’s your mind and body waving a giant red flag that it’s time to evaluate your debt (and how you’re paying it off), not yourself.

This isn’t about forcing yourself into deprivation or blindly following some financial “guru’s” rigid money rules. It’s about choosing a path that works for you. Snowball, avalanche, waterfall—whatever strategy keeps you motivated and moving forward is the right one. Progress isn’t just about watching that debt amount go down, it’s about learning to trust yourself with money AND debt.

And again, this is mandatory… you MUST celebrate! Every time you pay off a debt, or pay down $500 (or whatever you choose) bring that home as a win!

Financial health isn’t about restriction or shame, it’s about you breaking the cycle of debt, trusting yourself to make good, future-focused decisions, and finally, finally feeling the stress of debt let go.