Harness your money mindset to take control of debt

If you’re struggling with debt, you are not alone - one in six people has a debt problem. And the financial implications of the Covid-19 pandemic, such as a loss of income, job loss or furlough, may have pushed some people further into debt, or forced them into unexpected debt.

While it can sometimes seem overwhelming, taking steps to deal with it can help you feel as though a burden has been lifted. Most people will understand that the biggest obstacle to dealing with debt is facing up to it in the first place. And that comes down to our money mindset - our attitude and unconscious set of beliefs around money.

Having the wrong money mindset can stop us taking action. So here is how to understand your own money mindset, so you can transform it from a hindrance into a powerful tool to help you deal with debt.

Do you have the right money mindset?

The good news about discovering your money mindset is that you have all the answers - you just need to ask yourself the right questions. Many people are in denial over the extent of their debt, or find talking about financial matters stressful.

It’s human nature to be worried what other people will think, which makes us reluctant to ask for advice. And many of us think dealing with debt will be too difficult, so we keep putting it off.

Start by asking yourself these simple questions:

  • Am I in denial about how much I owe?
  • Am I ashamed of my debt, or worried what others will think?
  • Do I avoid facing up to my debt - for example, ignoring letters and bills, and refusing to check balances?
  • Do I find talking about my debt stressful?
  • Have I failed to take action I know will help me take control of my finances, such as making a budget?

If the answer to any of these questions is yes, then your mindset may be getting in the way of you dealing with your debt. The good news is that you can change it and remove one of the biggest barriers between you and a healthier financial future.

How to get into the right mindset - and stay there.

Changing your mindset is more straightforward than you may think. Try these simple techniques and you could transform your relationship with money.

  • Be honest with yourself. If we are in denial about the extent of our debt or our ability to afford repayments, the key to changing that mindset is to face facts. Once we accept the reality of our situation, we can begin to change it.
  • Focus on the end result you want, not just your current situation. If debt problems feel overwhelming, it can be difficult to take the practical steps necessary to start dealing with them. So before tackling budgets, payment plans or your bank, take a few moments to think about how your life will be once you have got a grip on your debt problems. Imagining how you will feel once you are in control of your finances can be the perfect motivation to kick-start a new money regime.
  • If taking practical steps is daunting, then associating tasks with something you love may be the answer. We are more likely to do something or form a good habit if it becomes part of an enjoyable routine. It can be as simple as making your favourite coffee or the perfect cup of tea every time you call the bank, or rewarding yourself with a soak in the bath after you’ve gone through your monthly statements.

These are simple things, that won’t cost you a penny, but could have a huge impact on your financial wellbeing. Changing your money mindset for the better is one of the most effective ways of getting on top of debt and ensuring you are in charge of your finances.

You’ll feel confident that you’re on the road to controlling your debt and your life.

Where to get help

If you are struggling with debt, consider speaking to your bank, who may be able to help you.

These organisations can also offer information and free, non-judgmental help and advice.

nationaldebtline.org
payplan.com
debtadvicefoundation.org
stepchange.org
citizensadvice.org.uk

Five simple steps to get a grip on debt

Working closely with third party organisations such as Citizens Advice Bureau, TSB are committed to offering everyone the help and support they need to find a way forward with debt and ensure people feel more confident with their money, every day.

Related articles