As far as four-letter words go, “debt” doesn’t burn like the classics. But many of us try to keep it out of our mouths just the same.
Data released by consumer insolvency firm MNP in January found that 40% of Canadians are embarrassed by the amount of debt they owe, while 35% admit to hiding their credit card debt from friends and family. Almost half of Canadians regret the amount of debt they’ve taken on.
Debt shame is having a sad, predictable impact on Canadians’ mental health: anxiety, stress, feelings of isolation — emotions that can descend on us anytime we’re stuck in a situation and afraid to talk about it. That fear can lead to inaction and an even greater sense of anxiety.
Talking about debt won’t lower your credit card balances, but it might make you feel less overwhelmed and more inclined to take positive action. Here are some ways to make the idea of opening up to a loved one or credit professional less daunting.
Keep things in perspective
Buddhists believe that life is suffering. Outside the temple walls, life is borrowing.
In the third quarter of 2023, global debt totalled $307 trillion dollars, according to the Institute of International Finance. This figure, which includes government, business and individual debt, rose $10 trillion in the first half of 2023 and is $100 trillion higher than it was 10 years ago.
Debt is central to the global economy; you could argue it is the global economy. So by taking on debt, you’re not doing something shameful. You’re making use of a tool that’s used — at every level of society — to allow goods and services to trade hands when cash isn’t an option. At its most basic, that’s all debt is.
There’s a lesson to be learned from how much global debt increased in 2023: borrowers can only control so much. When interest rates rise quickly and stay elevated, debt loads can swell to the point where they’re unmanageable — even for careful borrowers. Credit card use in cash-strapped households is bound to increase if decades-high inflation causes prices to spike.
Consider this: If a sibling, friend or even a stranger opened up to you about their debt worries, would you judge them? When debt costs grow due to factors beyond your control, there’s no reason for anyone to judge you, either.
What does debt mean to you?
Debt can thwart our goals of being financially secure, so it’s not unusual for it to cause anxiety, says Dr. Joseph Hayes, a social-personality researcher and professor at Acadia University in Nova Scotia.
Shame is different. Shame can enter the picture when you associate financial stability with being a good person. If you’re unable to get out from under your debt, it could impact your self esteem.
“In this case, [people] may be reluctant to talk about their debt because they don’t know how to get rid of it, and it makes them feel less than their ideal self,” Hayes says. “Here, what they are trying to avoid is a confrontation with the implications of their debt to their self-esteem more so than the debt itself.”
No matter how integral you feel your finances are to your self-image, they do not define you. Debt is just one aspect of your life, so try to not let it blind you to everything you do well. Even if you aren’t able to talk about debt with others, putting it into context for yourself can be helpful in spurring you to action.
And action is the ultimate goal.
“Troubling issues like this will tend to come up again and again, so if you respond with avoidance, you will have to keep turning your attention away from the issue every time it comes up,” Hayes says. “The anxiety can be resolved once and for all if you deal with the issue head on.”
Let’s be real about spending
Are you ashamed of your debt or your spending habits?
If your debt load is heavier because interest rates and the cost of living have risen faster than your income, that’s not necessarily your fault (unless you work for the Bank of Canada). Paying for the same items today that you bought last year will cost you a lot more money. That’s the boat we’re all bobbing along in.
But if sub-optimal spending habits are fueling your debt, it might be time to try changing them.
We all spend too much on a trip, meal or piece of clothing now and then, but letting indulgences dominate your spending is a risk to your long-term financial health. Don’t be swayed by lifestyle FOMO; it passes.
When spending takes a more compulsive form, like impulse buying, shopping addictions or excessive online gambling, there may be underlying, unaddressed issues to unpack.
If you’re struggling to keep spending under control and it’s leading to feelings of shame or other negative outcomes, it might be time to speak to a therapist — even if it means paying for your session with a credit card. Consider it an investment in your future well-being.
DIVE EVEN DEEPER
Financial therapy can help you address emotional blockers to financial well-being. But it’s still an emerging industry without regulation, and might be pricey.
Eliminate subscription bloat by reviewing bank statements and digital wallets, identifying recurring charges and downgrading or cancelling what you no longer need.