Debt Denial And How To Identify It Early On

debt denialDebt denial is one of the most common problems a lot of Americans deal with on a daily basis. And for some, it is even more challenging because they are in denial about it. They do not want to accept the fact that they are already operating in the red. It is hard enough already to manage an existing problem but accepting that you have one is always the first step.

This happens for a number of reasons. For one, it can be that their lifestyle slowly overtook their ability to earn. As a result, their expenses and other payments are already bigger than what they are able to take home every month. This discrepancy can lead to physical and emotional stress and ultimately, to unmanageable expenses and debt.

This is one of the reasons why your household budget is failing. Once your expenses are way more than what you are making, it is time to make some serious changes. Otherwise, you will find your finances in a tailspin of financial problems. Debt denial will only compound the situation and keep you stuck in debt.

What makes this even more challenging is the fact that Americans seems to have a love affair with debt. According to Nasdaq, consumer debt has gone over $1.3 trillion. Denial and debt amount that just keeps on getting bigger and bigger do not make a good mix. In all these, it is important to be able to identify early on signs that you are in denial about your debt situation. Here are a few things to consider.

Your bill payments are taking a back seat

One of the quickest signs that you are in denial about your debt and financial situation would be your bills. At the very least, you need to be paying them on time. However, when you start finding the need to move payments around to accommodate other expenses means that there is something terribly wrong with your budget.

You need to make sure that your bills are all paid on time all the time. It will also help if you can pay the full amount and not be content with the minimum payment. For one, you get to save money you would otherwise pay for interest. Paying in full also helps you utilize your card better whether for its rewards purposes or payment convenience.

Stress is becoming more evident in your daily routine

Stress can manifest itself in a lot of ways. It can be losing sleep at night, eating too much during the day, losing focus, and even aching joints and muscles. It can even ripple out to more serious health and mental conditions. When it comes to stress, you always need to remember one thing, it always has a trigger. You may not want to accept it but your debt denial could be causing all the stress in your life.

This is a dangerous road to be in especially when stress prompts you to take up unhealthy vices such as drinking and smoking. Once you are able to identify an unusual amount of stress when thinking about your current financial situation, it could be high time you take a serious look at your debt situation. Look for ways to how you can make it better.

Fights erupt at home when talking about money

Marriage will be full of fun as well as challenging moments. This is one way of growing up as a couple. However, when you notice that you are fighting more and more when it comes to your budget and even debt payments, it is a sign that you could be in debt denial. Time even shares that most fights usually revolve around money. You could be trying to hide the fact that you are at a point where you are way in over your head with debt obligations.

To get your finances in order and to save your marriage, you need to sit down and talk. It is extremely important, to be honest, and lay all your cards on the table. List down all your income sources,  debt payments and how things got to a point where you need to seriously talk about your finances. You might also need to identify habits that are destroying your ability to manage your finances.

Having to open credit cards to make ends meet.

This is one of the most dangerous things you can ever do especially when you are already in debt. Your credit cards should help you manage your budget and not ruin it for you. If you are constantly reaching for your cards to cover your expenses, you are headed down to a deep debt hole.

One way to address this is to have the habit of asking yourself why you need a new card. Will it help you with debt consolidation? Do you want to maximize the rewards program? Or do you need it to pay for your everyday needs? If you are getting the card to cover for fund shortage, you need to step back and reassess your decision.

Getting out of debt denial

As you understand the signs that you are in denial about your debt obligations, here are a few things to look into to help you out of your situation.

Recognition and acceptance

Just as with any other challenges and problems in life, you need to accept the fact and recognize that there is a problem. This puts you in the right frame of mind and much more open to finding solutions along the way. You need to accept the fact that you are in denial when it comes to your debt and expenses.

You would also have an easier time if you are able to pinpoint the problem from the start. It might be a little challenging but you just have to be honest with yourself. It can be anything from a shopping addiction to a hobby that went out of hand or even the lack of budgeting know-how. Once you identify the root cause, it would be a lot easier to address the problem.

Commit to change

Once you accept that you are in debt denial, identify the problem and lay out a solution, you need to commit to your plan. This is where discipline comes into the picture. You need to make sure that you follow through on your plans. You might get derailed a few times but the important thing is to get back up and follow your plan.

Revisit your long term goals

One thing that can help is if you keep mental tabs on your long-term financial and life goals. This can be a gentle nudge on days when you feel like you are not up to it. It helps you remember why you want to become a better version of yourself.

Debt denial is one of the problems that can slowly put your finances in the red. You might not know it but you are starting to descend into big and unmanageable financial problems. This can put a strain on your daily life and keep you further away from your long term goals. That being said, it is best to identify and address this problem as soon as possible.