Many Americans struggle with debt at one point or another. For some, it’s the result of adversity, like losing a job or getting hit with a medical bill.
For others, though, debt can be cyclical and not tied to a specific circumstance.
If you’re consistently taking on more debt than you can manage, financial therapists — who examine financial behaviors through a mental health lens — argue that looking inward may help in resolving the issue.
“We have a saying that every financial behavior makes perfect sense when we know the underlying beliefs,” says Rick Kahler, a Rapid City, South Dakota-based certified financial therapist and one of the founding board members of the Financial Therapy Association.
If you’re determined to get out of debt this year, consider these three key lessons from financial therapists.
Lesson 1: Identify the root cause
Do you find yourself constantly making the same mistakes with money? Then, there’s a good chance something bigger is at play.
“I get asked all the time, ‘Who should do financial therapy?'” Kahler says. “And my soundbite answer is anyone who is stuck around a financial decision. Because usually, when we’re stuck, it’s not about the money and it’s not about getting more information. It’s anchored in some emotional wounding from the past.”
For example, Kahler says he has seen clients painfully claw their way out of credit card debt only to fall right back in — they’ll amass $30,000, pay it off, then immediately rack up another $30,000.
What could be driving that?
It varies, he says, but it’s usually because some part of that struggle is familiar or even comforting. For example, that individual’s parents may have believed only rich people didn’t have credit card debt, and rich people only got rich by taking advantage of others.
These beliefs, or “money scripts,” as Kahler calls them, are typically subconscious but can drive our behavior in powerful ways.
If you want to interrogate your beliefs around money, you can use a series of questions to unveil those thoughts and, with each question, drill down deeper, says Erika Wasserman, a Miami-based certified financial therapist.
“Start by asking yourself, ‘Why are you in debt?'” she says. “‘Well, I’m in debt because I like to shop at discount stores.’ Okay, why do you like to shop at discount stores? ‘I want to feel better about myself.’ But why do you need to feel better about yourself?”
Once you reach the core issue, you can address it in ways that are easier on your bank account.
Lesson 2: Focus on where you want to go
Though debt can feel overwhelming, it’s crucial to adopt a growth mindset versus a fixed mindset, says Wasserman. A growth mindset means believing that things can change and you can be the one to change them.
“Take that statement of ‘I’m always going to be in debt,’ and change it to ‘I have $15,000 in debt, and I’m going to be out of debt in the next 24 months,'” she says.
Wasserman also advises identifying your goal and creating a visual, everyday reminder of that objective. For example, if you want to get out of credit card debt to build your credit score and eventually buy a nicer car, find a picture of the vehicle, place it in a frame and hang it by your front door.
This can help you stay motivated as you work toward your goal.
Lesson 3: Ditch the shame
Few money problems come with as much shame as being in debt. Other people will shame you for what they perceive to be poor financial choices, and you’ll likely shame yourself.
But shame doesn’t work, says Kahler. In fact, it can derail you completely.
“Shame says, ‘You’re defective. You’re screwed up. You’re a bad person.’ And nothing in that is going to motivate a change in behavior. It’s just more evidence that you can’t do this,” he says.
Wasserman agrees shame is particularly damaging. She encourages clients to confide in someone they trust about their money issues.
Not only may this help relieve shame, she says, but another person can hold you accountable to your goals or help you brainstorm solutions if you get stuck.
Other tools for getting out of debt
Financial therapy is just one tool that can help you get out of debt this year. Other strategies will help you tackle the hard numbers.
For example, if you have multiple forms of debt, like credit cards, medical bills and unsecured loans, a debt consolidation loan can combine these debts into one monthly payment. Not only will this simplify the debt payoff process, but you can save money if you consolidate at a lower interest rate than your current debts.
If you have good or excellent credit, a balance transfer card with 0% interest can help you save money. However, you’ll need to pay off the debt during the card’s promotional period to avoid interest — and be careful not to use your new card to rack up more debt.
For those who don’t want to consolidate, there are other ways to pay off debt, like the avalanche or snowball method, which helps you chip away at payments, one debt at a time.