How to Get Over Your Fear of Debt

Dealing with debt phobia is no joke

Updated May 13, 2024
Fact checked

We receive compensation from the products and services mentioned in this story, but the opinions are the author's own. Compensation may impact where offers appear. We have not included all available products or offers. Learn more about how we make money and our editorial policies.

Debt is heavy. 

If you’re carrying a load of debt from month to month, you want to get rid of it but may not be sure how to do so. And, you’re not alone. The average American has $8,195 in credit card debt, according to a report by Experian.

That feeling of helplessness or a lack of control can quickly turn into a gripping fear of debt.

Maybe you’re afraid to check your online credit card account, or you’ve stopped trying to make more than just the required monthly payment. Or, may you’ve pushed it out of your mind completely. If any of this sounds familiar, your fear of debt could be the only thing standing in the way of eliminating it.

Money phobias are common and having a fear of debt doesn’t mean your financial situation is doomed. Understanding why you’re afraid and what options are available can not only help you overcome your fear, but it can also help you find the light at the end of the tunnel.

Understanding What Triggers Your Fear of Debt

If you have anxiety thinking about how to get out of debt, it’s important to understand what triggers your phobia. It may not be the same for everyone. Here are some common triggers and how to start dealing with them.

Credit Card Statements

If opening the mailbox and seeing your credit card statement inside causes a rush of anxiety, it may be because you feel helpless about the situation. It’s a monthly reminder that you’re drowning in debt and aren’t sure if you’ll ever get out of it — a fear 32% of millennial debt holders struggle to fight.

What to do: Consider opting for online statements instead of paper statements. It’s still a good idea to check it each month, but you can do it on your own terms. Seeing paper statements build up over time on the kitchen table and not knowing what to do about it will only feed your fear.

Unexpected Expenses

Whether or not you feel like you’re managing your debt well, any semblance of control can disappear in a second if you have to add to it because of an unplanned purchase.

What to do: While it’s not possible to prepare for everything, it can help to have a monthly budget with an expectation of what you’ll spend each month.

Also, consider starting a small emergency fund to cover the expenses you can’t plan for, such as a car breaking down or a trip to the emergency room. It’s easy to dismiss the idea of having an emergency, especially when you’re deep in debt, but every little bit helps. Try to set aside even 5 to 10 dollars as often as possible.

Holiday Spending

Whether it’s the end-of-year festivities or your significant other’s birthday, holidays can be a harsh reminder of your situation.

Not only do you have to try to figure out how to pay off debt without getting deeper in, but you’re also surrounded by family members and friends with whom you’re constantly comparing yourself.

What to do: To help alleviate the money issue, consider planning and saving in advance to afford good birthday or holiday gifts. And when it comes to comparing yourself, it’s important to remember that looks can be deceiving. The best person to compare yourself with is your past self.

How to Overcome Your Fear of Debt

Understanding your fear of debt is half the battle, but it’s not enough to remove it from your life. Here are some steps to help you face your debt head-on and set up a successful repayment strategy.

1. Accept Your Situation

Whether your debt is a result of one event or gradually grew over time, it’s not easy to acknowledge where you’ve ended up. But accepting your reality can help you get over the first hurdle toward getting rid of it.

Be honest with yourself about how the debt came to be, and take ownership of any decisions you made that contributed to the problem. Then recognize that just because you’re in the situation doesn’t mean you have to stay in it.

2. Stop Running

If you’re embarrassed by the debt situation you’re dealing with, remind yourself you are not alone. Despite perfect appearances from those around you, it’s likely those same peers could be struggling with some form of debt of their own. This is your life, try to work past letting others’ opinions affect you to the detriment of your future.

3. Know Your Options

A critical step toward overcoming your fear of debt is taking back control of the situation. One way to do this is to research how to eliminate the debt.

If you have high-interest debt, for instance, consolidating debt with a personal loan can help you simplify your repayment plan and potentially save you money. With a personal loan, your payment amount will be the same every month and you'll just have one bill to pay instead of multiple.

Balance transfer credit cards are also a good option if you have credit card debt. These cards often offer introductory 0% APR promotions, giving you time to pay down your debt interest-free. Keep in mind, though, that balance transfer cards typically require that you have good or excellent credit to qualify. For more information, check out our list of the best balance transfer cards.

If you don’t qualify for a good consolidation loan or a balance transfer credit card, it’s still possible to pay down your debt quickly. Consider using the debt snowball or avalanche method to achieve your goal.

If your situation is dire, it may be worth considering working with a reputable debt consolidation provider who can counsel you on how to avoid bankruptcy or debt settlement, which can significantly impact your credit.

If you’ve already considered debt consolidation but aren’t sure how it works (or have been avoiding it out of fear), it’s time to end the cycle of avoidance. Understanding how to combine multiple loans doesn’t have to be as intimidating as you might think.

4. Avoid Sabotaging Yourself

Whether you use a debt consolidation loan, a balance transfer credit card, or some other method to pay off your debt, avoid undermining your own efforts by adding more debt to the mix.

If you have credit card debt, for instance, this may mean putting your cards in a sock drawer and sticking with cash or a debit card until your debt is gone, especially if you’re refinancing credit cards. Otherwise, it can feel like you’re spinning your wheels and you’ll have a hard time staying motivated with your plan.

Knowing yourself and how you operate (a.k.a. What triggers you) can go a long way in helping you avoid self-sabotage.

5. Make it Personal

You won’t get far with your debt repayment plan unless you understand why you want to get rid of it. Unfortunately, the simple answer of being debt-free likely won’t be enough to keep you motivated.

Instead, think about the positive things that will come into your life once you’ve achieved your goal. For example, you’ll be able to start saving toward a dream vacation, or you’ll have enough cash each month to feel financially secure.

Whatever your motivation, make it personal to your situation and remember it when you’re struggling in the daily grind.

The Bottom Line

If you’re afraid of dealing with your debt, you’re not alone. And the good news is that you don’t have to be. By confronting your fear and taking steps to overcome it, you’ll slowly be able to take back control over your financial life.

National Debt Relief Benefits

  • No upfront fees1
  • One-on-one evaluation with a debt counseling expert
  • For people with $30,000 in unsecured debts and up

Author Details

Ben Luthi

Ben is a personal finance and travel writer who loves helping people achieve their money goals. Along with FinanceBuzz, his writing has also been featured on U.S. News, NerdWallet, Experian, Credit Karma, and more.