Overcoming Debt Depression
Posted by Gail | Filed under Debt Traps, Life Lessons
You’ve all heard me talk about Debt Fatigue and how being in debt for a long time saps your desire, your motivation, and your belief that you can ever be out of debt. But what do you do if you’re already there: Debt Depressed. You don’t think things can ever change. You don’t believe there’s any point to even trying. You’ll never be happy.
Well, you can wallow. Or you can accept that you’re in an emotional cycle and haul yourself to a new place. Being in a debt depression doesn’t mean you never feel good. It just means that the things you do to feel good don’t last very long and are often detrimental to your financial health in the long run. Any of this sound familiar:
- Having debt is normal. Everyone has debt.
- I’m so far in debt now, I might as well…
- If I have to wait to get out of debt to buy (whatever), I’ll be old and grey.
Next time you’re feeling down about your debt, put your logic into drive and your emotions into neutral. The emotional stuff will pass if you keep to your path and stay on track towards your goal.
That assumes, of course, that you have a goal. If you haven’t yet started down the track to debt-free forever by taking even the smallest step, well, you’re in a miasma and nothing will change until you do take a step forward. It’s time to get with some people who have been where you are now and have made strides towards their goals. This is where the Gail Clubs come in. They’re designed to help you meet people who can help you, and whom you can help, by sharing your stories, your successes and your challenges, and walking forward together.
It doesn’t have to be a formal Gail Club. Just get with a friend, a family member, a co-worker or two and talk about your debt, how it makes you feel, and what you want to do about it. But talk. Get it out in the open. Commit to doing something differently.
Having a few positive people on your side can’t hurt. Since we know that thoughts – both positive and negative – are contagious, surrounding yourself with people who are on track to achieve their goal of being debt-free forever will help clear your path.
While you’re on your journey, if you focus in only on what you don’t have – what you’ve given up to find money to pay off your debt, or what you can’t have because you’re broke – you’ll deepen your debt depression. Consider everything that is good in your life. Count yourself fortunate. Be grateful. Change from focusing on what’s missing to seeing what you do have and being happy with that.
Count your successes along the way. This is an important part in not getting weighed down by how far you have to go. Turn it around and see how far you’ve come. Use charts to plot your progress. Have small celebrations each time you hit a milestone. Give yourself a hug for what you’ve achieved, instead of a kick for how far you still have to go.
Ultimately, if you’re in a debt depression, you’ll have to do something to help yourself. I get hundreds of letters every month like this one:
“Gail, please help me. Our situation is so bad. I just don’t know what to do. We need your help.”
I’m not sure what this person – or the hundreds of others who write – think I’m going to be able to do to help them. I do know that if they took steps to help themselves they’d be way better off than waiting for me to wave my magic wand.
Once people decide to stop feeling out of control, and pick up the reins of their own lives, things start to get better. If you want to mope about how crappy your life is and how dire your circumstances, hey, mope. Far be it from me to take away your will to wallow.
But if you’re serious about moving forward, if you’re tired of feeling Debt Depressed and want to get to a better place, action is required. Once you get some results, you’ll build some momentum and positive thinking will come easier. But YOU have to take that first step.
August 6, 2010 at 6:54 am
I’ve never been in that point of desperation where I couldn’t see the way out. When I started my journey to debt freedom, I knew it was going to take some time, but I also knew I had to work a plan and I would make it.
For those people that write to you in desperation, I’d recommend telling them to read some of your blog posts, it is free advice. Or even your book if it is at the local library.
Personally I’m glad I’ll never experience Debt depression.
regards,
Jason
August 6, 2010 at 8:00 am
While I never went into depression about my debt, it was quite worrisome and I wondered if I would ever get out of it. I used Gail’s tips, started to budget, paid down consumer debt, and began working on emergency fund. The first emergency I had and was able to pay for without going into debt was the best medicine to keep me on track. Now out of debt and well on track to achieving my goals, I continue to visit this blog, and read people’s helpful tips, comments and support. There’s nothing like a community of support to help you through tough times. But like all communities, people have their ways of dealing with the struggle. Be kind and understand if there are people you speak to who don’t want to listen to your money woes – and when you do reach your goal of debt-freedom, remember your struggle and be willing, when asked, to help others through their struggle.
August 6, 2010 at 8:07 am
The shear length of an average mortgage has me feeling down at times. For most people it will be (hopefully) the longest form of debt they take on.
We have chosen not to buy property that requires a mortgage amortization longer than 15 years for that reason. With yearly prepayments added in, the length of time dips below 10 years. Some days, that feels too long.
I must say that in order to achieve the above, we have chosen to live in a fairly small city where real estate prices are much more “reasonable” to the numbers I read about in the Globe re: Toronto, Vancouver markets.
Our home, which would rival some of the ones found in Rosedale, was purchased for $285000 3 years ago.
Best of luck to those out there who are combating debt fatigue.
August 6, 2010 at 8:08 am
I think I hit a debt depression when I was almost $50K in debt (my own consumer debt, not even the ‘family’ debt). I almost threw up when I had everything added up in 1 spreadsheet. Despite coming here for months earlier and feeling motivated daily, I don’t think I ever felt so much despair, not to mention the overwhelming desire to just say “Stuff this, I might as well blow what’s left in cc room and have a good ol’ spree once and for all.” But I didn’t. I put the spreadsheet away, sweated a few bullets, mulled over the situation, and popped that sucker back open again with a plan. Yeah, I fell off the wagon a few times, what with emergency spending and “how’d that kid grow 2 feet in a week??” spending, but it’s consistently dropped since that first cold sweat.
Now I find joy in using my multi-coloured pens and shade in every new $250 debt payment I make. I can’t wait for pay days so I can colour in a whole new square! I know, kindergarten simplicity at it’s best for an almost 40 year old woman. But it works. Maybe if I could find some of those old ’scratch n sniff’ stickers that smelled like debt-freedom, that would be even MORE motivating!
Peace all!
August 6, 2010 at 8:09 am
There have certainly been times over the last few years, when I didn’t have a plan to retire my debt, that I treated it as if it would always be there, so what if it was a few grand more.
Now, that I actually have a concrete plan, rather than a “someday I’ll….” it’s not only more successful, but easier to live the day-to-day. This isn’t to say that the journey isn’t full of hurdles. I’m amazed how many “little things” occur that can cause a person to throw in the towel. Thankfully, I’ve gotten pretty good at flexing things around.
What gets me are the friends and sometimes family, in an attempt to be (presumably) supportive, say things like “can you ever really get out of debt” or “do you even think that’s reasonably possible” or “go ahead and buy that, you deserve it!”
To those folks I say – yes, it is possible, I’ll let you know in about six months when it happens. No, I won’t be totally debt free. I’ll still have a mortgage, but I can accept that, and live without any other debts. For my friends who tell me I deserve something, that’s sweet. What I really deserve is to live a life free of debt obligations (other than my mortgage) and the freedom to save up for the things I really want.
August 6, 2010 at 9:33 am
My monetary depression is not particularly linked to our debt, but to the household income. We have $50,000 in total household debt, and our income last year was $36,000 gross.
Recently, I got hired on to a full-time ‘real’ job after working for two years as a temp. This will help bring in at least $200 more each month, just with the adjustment in wages. On the other hand, my partner’s company has cut his hours, giving him a shortfall of about $200. Some days, I end up wondering if we’ll ever have enough to pay more on our debts
August 6, 2010 at 9:40 am
When we finally got serious about zapping our debt, it felt great. Watching the balance on the LOC drop each month was so motivating. However, I didn’t drop every dime to debt repayment – I did what Gail suggests on her shows – I put a few hundred bucks into savings and emergency funds each month as well. And it’s a good thing we did because through out the time that we were aggressively paying down our debt, we had to replace 2 dead appliances! We were able to pay cash for those 2 puchases because we had been stashing away hundreds of dollars a month into savings. A year earlier a dead appliance would have meant slipping a thousand dollars further into debt… not today! I’m so glad the money was there when we needed it. Now that the debt’s gone and paid, I will never choose to live in debt again! Bad things can happen outside of your control but now we have a plan to be able to handle a financial crisis – of course, we aren’t fully prepared yet, but we are getting there, dollar by dollar.
August 6, 2010 at 10:15 am
@ Sharon: Think positive — that $200 that you’re making more offsets what your husband will be losing; it can only go up from there! I have been discourage with the many backslides that life has handed us, but then something always comes up to help balance, or make life just that wee bit better, whether it’s extra over-time, slight pay increase, kids getting older meaning less daycare expenses… that ‘good’ luck is always waiting just ahead…
My husband takes Philosophy #1 — Everyone has debt… Yeah, but ‘everyone’ has lululemon clothing too, and I’m not buying any… However, sometimes it does put a bit of perspective into the situation in that you’re not alone, and other people have managed to get in AND out of debt, just hang in there, and remember what’s really important in your life. Decluttering my basement has helped me recognize what I value, what I don’t, and how much I love my house when it’s all clean and organized, and how I don’t want to just fill it up with ’stuff’, and while a sectional couch might look nice, our 2nd hand couch and Ikea chair do the job just fine, and doesn’t affect our enjoyment of hanging out as a family watching movies, playing Wii, or board games, but having more debt for a couch would affect our family’s stress level. That’s how I try to avoid ‘debt depression’… 3 more years until ALL debt is paid, hubby’s RRSP’s are maxed, one child’s university savings where we want it… not so long to wait.
August 6, 2010 at 10:16 am
I have no debt other than my mortgage. I certainly wasn’t always like that, and sometimes I do use my LOC until my ex gives me the child support, I know I shouldn’t but I also don’t want to use my Emergency Fund for that. In all truth I know I should have some extra in that account for that reason, but when I see some extra money in there I like to put it into the Florida account, or the Savings, or plunk a bit extra on the mortgage. Wow do I love doing different senarios on those Mortgage calculators. If I put $150 biweekly more on my mortgage it will cut down 8 YEARS from my mortgage. I desperately want to do that but I know that I need more in the Emergency Fund first, because that Harvest Gold stove isn’t going last forever, nor the 23 year old fridge. And the kids want to do dance and ringette this year, sigh…the extra on the mortgage will wait for another month.
August 6, 2010 at 10:30 am
I truly don’t understand the logic behind saying “everyone is in debt.” Basic logic dictates that if any part of a statement is false, then the entire statement is false.
Therefore all you need to do is provide one person who is NOT in debt (ie a homeless person is likely not in debt) and therefore the statement is false. Might as well say everyone is 9′ tall or everyone is 500lbs or everyone is a pirate if we’re going to ignore basic logic. But I guess that’s a coping mechanism and isn’t meant to t stand up to the light of day.
August 6, 2010 at 11:10 am
Up until 3 years ago I always paid my credit cards off every month and was proud to say I was good with my money. 3 moves, 3 cities, 5 jobs, and 1 serious illness later I owe $13 000 on credit. For the last year I’ve been “trying” to pay it off but not really getting anywhere. It took being completely maxed out for me to actually take a stand and start paying debt off right. It’s been 6 weeks and I’ve paid 1300 of that debt off already and for once I’ve got money in savings. I’m excited because today is debt payment day! yay! I get to watch the number go down again
On another note my spouse and I watched The Pianist last night. For those who haven’t seen it, it’s a movie based on a true story of a Jewish Pianist who manages to live through the Holocaust. There were moments in his life over that 3-4 year period that he went days without food or water and 3 years without safety, never mind stuff. It was very humbling. It reminded me that $300 a month for a grocery budget is more than plenty and there is no need to over spend on fancy restaurants every week especially when there are thousands of people across the world that live on far less or even nothing at all. For some reason this movie really hit home and made me double think the purchase’s I’ve made in the past and decide that maybe my scale of what I NEED vs. what I WANT maybe be a little off and that I need to stop being ungrateful for living in the beautiful, safe and truly blessed country that I do. This is just a reminder to live within your means and be thankful for how little or much you have, because I’m pretty certain there are thousands maybe millions of people in the world who would do just about anything to have half of what you have.
August 6, 2010 at 11:18 am
Oh, I hit debt depression 5 years ago when we were $60,000 in consumer debt. We made a lot of hard changes – using a budget, being more frugal, working extra hours, etc.
At times it was very frustrating. Car repairs, lay-offs and unexpected expenses ruined our debt-repayment plan for the month and there seemed to be no end to the debt.
After a few years of getting our debt paid down and a job change for my husband, I was able to stay home with my kids. Believe it or not we have more money now than when I worked full-time!
Last month we made our last debt repayment and are proud to say we are “debt-free” (aside from our mortgage).
As hard as the last 5 years have been living with debt I must say we learned a very valuable lesson about finances. We are now on the right track and will never get into debt again. I plan to teach my kids about money (something my parents never did) and set them on the right track for their adult life.
Gail, you had a huge part in helping us get through the past few years with your show Til Debt Do Us Part and this blog. Thanks for helping us reach debt freedom!
August 6, 2010 at 11:35 am
I have been in debt depression also. But you know, since embracing Gail’s philosophy and methodology, I don’t seem to go there any more. Oh yes, we still have a whopping debt to pay off, but we are actively doing it and saving at the same time. Having this goal seems to help keep me out of debt depression. My husband used to also say that everyone was in debt but he too, has changed his perspective.
Even if we don’t want to discuss these issues with our friends, we still have this blog as a support network!
August 6, 2010 at 11:53 am
Even though my debt was never huge I still had debt depression – it just felt like it would never ever end or go away. Until the day came that I just got so mad at all the interest I was paying the banks and credit cards, never having anything in the bank and always feeling broke and made a plan to get out of debt.
It took me 3 years and daily reading of this blog (thanks Gail!) and watching TDDUP (reruns and all) to keep me motivated.
Best day ever was when I could finally say I was debt free!!
We’re now tackling our mortgage and plan to have that paid off as well within 10 years.
I’ll be throwing the biggest party when that day comes!
August 6, 2010 at 12:36 pm
I was in debt depression many times over the years, even though my debt was not huge, it felt huge to me compared to my income. Now I’m getting really close to being totally 100% debt free and I’m excited, after having been in debt since I was 18. Thanks to Gail for all her pep talks! My mom used to just sit and look sad with me when I told her about my money worries – I wish she and my dad had sat me down and showed me how to do a budget and live on cash, rather than just commiserating with me, but at least now I’m nearly there on my own.
August 6, 2010 at 2:11 pm
Amanda, I like your comparison – I would venture a guess that most of us could say we have too much ’stuff’. I have always had that inkling, but it was slammed home two nights ago when I came close to having a house fire. DO NOT leave a candle unattended – there is good reason for that warning on candles. I forgot that I had lit a pencil thin scented candle (in a glass bead filled glass holder) and went downstairs for a bit. Coming back up to a black smoke filled main floor almost made my heart stop. The fire was the size of a baseball (the glass started on fire!@!!!!), but the smoke and soot was enormous! The clean up has made me question the need to keep all my knicknacks, books and ’stuff’. I am actively downsizing with a garage sale in a few weeks, and have decided to be brutal with my culling. My ’stuff’ dictates the size of my rental, and that is ridiculous, when you think about it. I can’t say that I have ever bought any of this stuff on credit (don’t have credit other than student loans), but the impulse garage sale purchases could instead go to S.L.’s and hasten that process. BTW, my smoke detector never went off until the main floor was totally filled with smoke!! I can’t boil water on the stove without it going off, so that was an eye/ear opener for future reference! After two months in a cast, I have started physio – once I am back to work, I can put into effect the debt repayment/saving plan I have had ample time to construct during my recuperation. Thank the heavens for Gail’s bare bones wisdom and Interactive Budget!!
August 6, 2010 at 3:26 pm
Can’t say I was ever in debt depression. I just stupidly and unwittingly went on my merry way being a consumer as though I had all my marbles – sheesh.
When I was a kid my Mom would say ‘just because your friend said she was going to jump off a cliff – would you jump too?’ Guess those that say everyone is in debt is jumping with their friends?
I think those on this blog are really amazing. Sure there are ups and downs. That’s life. But to come here and read that you are all cognizant of where you are debt-wise and what needs to be done and that you are putting one foot in front of the other to get debt free is awe inspiring. Knowing that we are all in the same boat bailing out together helps so much. To come and read how Jason and others have their acts together gives me inspiration.
When I joined this group – November 2008 – our reno’s and cars had our LOC at $58,316.19. Wow!
I had a giggle to myself just yesterday. Looking at our TD account there it was…..LOC owing $6,000. Hubby’s VISA $0. My VISA $0. I love
the days I can put a check mark beside another payment…..
November 30th can’t come soon enough. Imagine…not owing one cent to anyone.
I haven’t received the cheque yet from the July 29th auction sale – it will be going into the emergency fund.
Loved to read about your magic coloured pens Michelle. Whatever works!
August 6, 2010 at 4:07 pm
Been there, done that, and we have just seen a BIG light at the end of the tunnel in this week in the form of a Consolidation Loan paid off 4-5 months early! Hubby and I have been talking for the past couple of years how nice it’ll be to be rid of that payment (higher $ amount than our monthly mortgage), and for the last year, we’ve been seeing the loan amount dwinddle when checking on-line after every payment… and now it’s GONE… buh-bye!!
Hubby was never one to discuss money unless I really pushed the issue, because he felt like we’d ALWAYS be in debt, it’s a way of life, yada yada yada, but when I texted him to say we were able to pay off the loan in full earlier than we’d thought, he was THRILLED! It’s already had a positive domino effect; he wants to participate in the household budgetting and he’s even opened his own RSP at our bank (his work doesn’t offer RSP contributions).
Even though there were days that the debt seemed insurmountable, we’ve worked really hard, and now we’re seeing the results!
August 6, 2010 at 5:57 pm
Hello everyone,
i love this blog and i would like to ask a question. What are the definitions of “household” or “consumer” debt? I read these terms in your posts to the blog entries. Where does the mortgage fit into this? I read a stat saying the average Canadian debt was 97,000. The article mentioned it had the banking industry worried about this high value. If this includes mortgage, then I would tend to think this is rather low? Just a bit confused. thanks for your input.
August 7, 2010 at 8:02 am
Trying to figure out a way to be debt free, my salary was cut to 70 hrs instead of 80 hrs that i normally work, we have 2 kids and trying to pay off our debt, I watch Gail’s show every week trying to get tips, so far ite been difficult setting up a budget, does anyone have any ideas on how to get started on a budget
August 7, 2010 at 8:35 am
I know I felt absolutely petrified when I started paying my student loans. The debt seemed so overwhelming. I chipped away slowly, I had other debt, but that is gone, and my student loan debt is months from being paid off. WAHOO! Then I will only have my credit card to deal with. Unless, I get my 1st home in the next few months.
August 7, 2010 at 8:41 am
Re: Michelle I think that the color coded squares are a great idea I have one for my emergency fund, payment to my sister and fun fund (Christie’s in the fall) (Antiques) I can’t wait for the day when I can go down there and actually buy something and paid cash for it Oh what a feeling!
But as for being depressed been there done that not the greatest feeling, so I have taken up riding lesson at a local ranch where for $25.00 for a couple of hours I get a lesson on a western discipline and then go riding for an hour and for those couple of hours I don’t think about anything other than what I am doing and for me it works. Everybody has to find something that takes their mind off of what they are going through.
Have a great day I am going riding LOL
August 7, 2010 at 12:09 pm
@Richard – I’ll try to answer your question…but don’t know if I’m the right person to do it……there are more savvy people here.
Gail usually talks about two types of debt. Fixed and Variable. The Fixed are the things you don’t usually alter – like mortgage, hydro, water etc. The Variable are things you can do something about – like cable, cell phone, groceries, credit cards, etc. It may come to the point where you have to move to a less expensive place thereby altering your Fixed payments.
I would suggest that you click on ‘Gail’s Website’ at the top of this blog, then ‘Resources’.
There you will find Gail’s Guide to Building a Budget. Read that. Then click on ‘Interactive Budget Worksheet’. Have all your bills in front of you and punch in the numbers. You will be amazed to see your money all in one place. Play with it. Make it work for you. Need more money? Ditch something you can live without. Or make more money. Decide what is important to you…having ’stuff’ or debt freedom. Don’t use your credit cards at all. Put them away. Or, if you do have to use one…pay it off at the end of the month. Don’t pay interest.
This is a long, slow process. Doesn’t take a rocket scientist to see that it works, it just takes time to get your head around taking steps to becoming debt free. It’s not easy. Far from it. But, I think you will sleep better and have a skip in your step knowing you don’t owe one cent to anyone.
Hope I’ve helped.
Catherine….a work in progress
August 7, 2010 at 2:30 pm
Catherine wrote:
“Gail usually talks about two types of debt. Fixed and Variable. ”
I think she means to write: Gail usually talks about two types of EXPENSES. Fixed and Variable.
I would label consumer debt to be from: credit cards, personal loans, lines of credits, car loans, student loans.
Household debt??? all of the above for sure… some might include the mortgage… anybody else?
August 8, 2010 at 3:08 am
This might sound silly, but 3 years ago when I found your show and blog I printed off the casting call page to later find out that we would never be picked due to our location. I challenged my husband to use all your knowledge so we too could get $5000. It approximately 9 months to have 1500 in our emergency fund and pay off 3500 in debt. I felt like we had succeeded and that we were what the show was for! Thank you so much, now we know we can save, spend and donate. I still feel apprehension about spending money and tend to save too much..but it feels so much better to be careful and put it away so you have more options. I love being consumer debt free…35000 off our backs and more time to enjoy life.
August 8, 2010 at 10:37 am
I am fealing debt fatigue but still carrying through with as much diligence as I can, while enjoying small pleasures along the way, We hardly ever eat out and when we do, we rarely spend more than $25 for the two of us. We work out at home instead of at a gym. We live close to a wonderful bike trail and go for biking and hiking excursions at little or no costs.
Im trying to accept the fact that the debt cycle is taking more time because we are sending extra money to Emergency Fund, Mortgage, and HELOC. I know I could be using “snowballing” but Id rather distribute money towards these 3 important goals (EF = only covers one month of regular mortgage at this point, HELOC will take another 2-3 years to pay off, Mortgage another 15-20 years to pay off).
August 8, 2010 at 4:22 pm
DanielC:
“we are sending extra money to Emergency Fund, Mortgage, and HELOC”.
If you have credit card card debt, the mortgage and HELOC are probably the lowest interest rate. I would not put extra on those two unless they are your only debt otherwise it will take you longer and cost you more. I would continue contributing to the EF.
August 8, 2010 at 5:17 pm
As a girl in my mid-twenties I have made some very stupid money choices.. Got sucked into the world of credit, even though I have worked full-time since graduating from high school and never took out any student loans. I didn’t take the debt seriously, always telling myself I could deal with it later.
Now I’d prefer to think of myself as a Reformed Princess (as Gail would say). I’m hoping to have all of my debt paid off by the end of the year (with the help of my second job) and then be able to save up to buy a house within 4 years while finishing university. Thanks to Gail’s budget, this blog (with all of the wonderful comments and stories), and an endless supply of TDDUP re-runs thanks to the Slice website, I know I can do it!
August 8, 2010 at 6:40 pm
Marie: I have no credit card debt, and paying it off in full every month. The rates are as follows; 2.91% on HELOC, 5.22% on mortgage, 2.0% on EF kept in TFSA. The EF rate is low, and the amount there is far from the amount required to cover 6 or even 3 months survival expenses.
August 8, 2010 at 6:49 pm
…to add to above comment; once I have reached a decent amount in the EF, this will allow more funds to be directed at HELOC balance and mortgage. I am very far from my EF target, but happy about baby steps (close to 1st step to cover 2-4 weeks until initial EI would be granted).
August 8, 2010 at 8:34 pm
Well, my husband & I have been looking for ways to help us get out out debt. We saw Gails show for the first time last night & really got some good tips. WE HAVE ALOT OF DEBT! We had just a mortgage & home equity loan we were paying on & GOT ZAPPED! Our debt was part of a divorce that never went through. Now baCk together @ a few surgeries, & attourneys fee’s we have alot of work ahead of us. Its overwhelming & part of me just wants to take the bankruptcy route because I am unsure if we can even get this paid off. We have both had job promotions & know that this will help. Its all very overwhelming. I plan on getting Gails book so that we can get started somewhere!
August 8, 2010 at 9:24 pm
DanialC: Then you are doing fine. It just takes time. I build my EF to 6 months of necessary expenses but I working on building it to 6 months of all expenses (including a future mortgage). It just takes time. You’ll get there!
August 10, 2010 at 3:28 am
Good read. Very informative. This can help a lot of people who are having a hard time with their personal finances.