The Best Ways to Defeat Doubt and Depression Due to Debt

American household debt hit a record $16.9 trillion at the end of 2022, according to And in 2022, it was estimated that just below 10% of the average American household’s income went to paying down debts. Seeing these numbers, it’s easy to understand why Americans feel overwhelmed by their debt. 

If you find yourself in a situation where your debt makes you feel out of control, know you’re not alone. The stress of being in debt can cause individuals to feel hopeless or even depressed. But there is hope. There are things that you can do to get on top of your debts and start to feel better. Let’s look at some of the best ways to defeat doubt and depression due to debt and get back on track!

Give Yourself Grace

Being in debt and dealing with self-doubt and depression as a result is hard enough. Beating yourself up over past financial decisions won’t help. If you find yourself struggling with debt, the first thing you need to do is give yourself grace. 

It can be hard to see past choices you aren’t happy with and not wish you’d chosen a different path. But, looking back won’t change the situation. So, take a deep breath. Know that you did the best you could in the past. And then, move forward knowing you can tackle and defeat your debt-related doubt and depression. 

Get Organized

While sitting down and looking at the numbers can seem like a counterintuitive way to defeat doubt and depression due to debt, it’s where you need to start. Knowing your numbers will help you make informed decisions as you try to get out of debt. 

It can also help you see how things truly are. Often, when you find yourself struggling with your debt, you may not have an accurate picture of what you’re dealing with. And when you don’t know, you might build the problem up to be bigger than it is. So, to defeat your doubt and depression due to debt, get organized!

Make a list of any and all debts you owe. Be as specific as you can. Write down who you owe, what the current monthly payment is and when it’s due, your overall balance, the interest rate, and any other information about your debt. 

This list will do two things for you. First, it will help you get organized so you can make a clear debt repayment strategy. Second, it will help you face the problem head-on. Avoiding your debt because it is making you feel bad doesn’t help the situation. Facing it and getting organized may be overwhelming initially, but it will help you tackle the problem.

Pick a Debt Repayment Strategy

Once you’ve organized your debt, the next step to defeat doubt and depression due to debt is to pick a debt repayment strategy. If you have a plan to pay off your debt, you’ll feel more in control of the situation. Here are three common debt repayment strategies to choose from.

Debt Snowball

The debt snowball is a common method for paying down debt. With the debt snowball, arrange your debts from smallest balance to highest. Then, make the minimum payment on each debt. 

Any extra money is applied to your smallest balance debt. Once this is paid off, shift the minimum payment and the extra you were paying on your smallest debt to your next smallest. 

This continues until all of your debt is paid off. Much like a snowball growing as it rolls downhill, your debt repayments accelerate over time. The debt snowball method is a great debt repayment method for those who need to see results fast. It can also help you build momentum and see that debt repayment is possible. 

Debt Avalanche

The debt avalanche is another common debt repayment strategy. With this method, arrange your debts from highest to lowest interest rate. Again, you’ll make your required minimum payments across all your debts. 

But this time, you’ll apply any extra money to the debt with the highest interest rate. Once you pay off your highest interest rate debt, you’ll shift the money you were paying towards it to your debt with the next highest interest rate, and so on down the line. 

This repayment strategy is good for those with higher interest rate debts that cost them each month in interest payments. Like the debt snowball, it also will allow you to build momentum on your debt repayment journey. 

Pay Off Emotional Debt First

The third debt repayment strategy is to focus first on paying off any highly emotional debts. Sometimes, you may find yourself in debt because something bad happened in life, and you need money to take care of the situation. This debt can become emotionally charged, and knowing that it is hanging over you can make your doubts and depression worse. 

If you have debt like this, making it your top priority can help. First, make the minimum payments on all your debts. Then, use any extra money that can go towards debt to pay off the emotionally charged debt first. Getting rid of this debt can help you think more clearly about your debts. Once you’ve paid it off, you can follow the debt snowball or the debt avalanche to get through the rest of your debt.

Create a Budget

Once you’ve picked a debt repayment strategy, it’s time to find more money to put towards your debts. Creating a budget will help. It will also help you feel more in control of your financial situation. And feeling more in control can help you defeat your doubt and depression due to debt. 

Fixed Spending

To start your budget, first identify your fixed expenses. These usually include expenses you pay at the same time and in the same amount each month, like your mortgage or rent, car payments, insurance premiums, internet/cell phone bills, utilities, daycare, medical expenses, subscription services, debt payments, and anything else you pay for at the same time each month.

Review three to six months of your bank and credit card statements, highlighting any recurring expenses. Write down each expense, how much it costs, and the due date. Then, total up your fixed monthly expenses.

Flexible Spending

Next, you’ll want to look at your flexible spending. These are variable expenses you pay for each month or on occasion. This category includes things like eating out, groceries, entertainment, clothes shopping, and any other expenses you see in your bank and credit card statements over the past three to six months. . Write down the amount spent monthly on each expense.  Then, find the average to estimate roughly how much you spend each month. Total your flexible spending and add it to your fixed spending to build a rough budget.

Find Money to Pay Towards Debt

Once you have created a rough budget, it’s time to find extra money to pay toward your debts. Compare your total spending to your income from all sources. If you have money left after paying your fixed and flexible expenses, you can use this to pay down your debts. If there isn’t money left over, review your spending carefully. See if you can find expenses you can reduce or cut out completely to give you extra funds to pay towards debt. 

Developing a budget will help you find extra funds to put towards your debts. It will also help you regain control of your finances. Seeing where your money goes each month and making strategic changes to keep your spending in line with your income and your values will help you feel more confident with your money. This confidence will in turn help you defeat the doubt and depression your debt has caused. 

Set Small Goals

Another way to defeat doubt and depression due to debt is to set small goals for your money. Small goals are better when you are working to turn around your money situation because they aren’t overly complicated, and you can see progress faster. 

It’s important when setting goals for your money to create SMART goals. A smart goal is one that is Specific, Measurable, Achievable, Realistic, and Time-based. Having a goal with these elements will give you a clear path to success. Write your goal down and keep it where you can see it to keep it top of mind. As you make progress on your goal, be sure to track it. And when you reach it, before you set another, be sure to celebrate! 

When you are feeling doubt and depression due to debt, you can lose your ability to trust yourself and your ability to make good choices with your money. Setting small goals and working consistently to achieve them can help rebuild this trust and get you back on track. 

Get Help

Finally, if you’re dealing with doubt and depression due to debt, know that you don’t have to go through it alone. Problems feel lighter when shared. And sometimes, someone outside the situation can see a solution when you can’t because you’re too close to the problem. 

Reach out to a friend or family member for support. Or speak to a trusted religious leader or mentor. Find support for your depression from a qualified mental health counselor in your area. 

Psychology Today has a great resource for finding a mental health professional in your area: go to their homepage, then select “Find a Therapist.” Or look for an Accredited Financial Counselor (AFC®), financial coach, or financial advisor in your area who can help you work through your debt and start feeling better. To find an AFC® in your area, visit

Final Thoughts

Debt can feel so heavy and hard to deal with that you may not even know where to start. The good news is there are a few things you can do to defeat doubt and depression due to debt. 

Remember to give yourself grace as you start dealing with your debt. Then, after taking a deep breath, get organized. Determine exactly how much you owe, who you owe it to, and at what interest rate. This information can help you make informed decisions as you go forward. 

Then, look at the different debt repayment strategies and pick the one that’s best for you. Once you have a repayment strategy in mind, review your spending and create a budget. This will help you find extra money to put towards your debt repayments. Next, start to build your confidence by setting small goals and working hard to achieve them. And above all else, remember, you don’t have to walk your debt journey alone. 

Take Charge of Your Savings
Earn rewards for creating a brighter future
Sign up to save more

Recommended Articles

7 Strategies to Stay Positive on a Tight Budget

In June of 2023, 61% of adults in the US reported they were living paycheck to paycheck. This means over half of adults in the US spend the money they earn each month.  If you find yourself living paycheck to paycheck, it may feel like your budget doesn’t have any wiggle room. When your budget… Read more

7 Money Habits That’ll Help You Stop Stressing Your Savings

Saving money is something we all know we should be doing. But it can often be hard to start and sustain a savings habit, especially if you don’t know where to start or how to stay the course. And this can cause considerable unnecessary financial stress that stops you from getting started.  But there are… Read more

5 Tips to Stay Out of Debt on Black Friday

Your No-Debt Black Friday Survival Guide As a veteran, I often get eye rolls from my kids when I use military analogies to describe events. But as a financial coach, I can’t help but see Black Friday as an epic battle. You’re knee-deep in the trenches of holiday shopping goals and you’re experiencing the rapid… Read more