The Emotional Cycle of Debt

By Chelsea Taylor, Licensed Insolvency Trustee

Logically, we know we can't buy everlasting happiness for 12 low payments of $59.99 – or less than the cost of one coffee a day. Yet, we all fall into a similar trap at least once (and usually several times) in our lives: We buy things we don't need with money we often don't have, hoping – but knowing deep down the purchase will never live up to its promise of endless joy and fulfillment.

It's not because we're naïve or irresponsible, either. It's because good marketers know that striking the right emotional chord in just the right way can make us prioritize that which feels goodright nowover that which is in our best interest. In a world where the average person sees up to 10,000 marketing messages a day from three or four years old, eventually even the most frugal among us will hear a tune they can't resist dancing along to.

There's a Solution for that Too

Of course, it's easy to curb the impulse to spend too much in the feel-good category when cash is our only option. We're duty-bound to leave room in the budget for things like housing and heat and groceries. Obviously, those things aren't just in our best interest – not having them doesn't feel very good either. So, we easily refrain.  

But lenders have the perfect solution to our stoic restraint. They advertise debt tools like credit cards, loans and lines of credit as the best way to prepare for an emergency or reward ourselves by splitting the cost of a large purchase over several monthly payments. What they don't tell us about is the stress, emotional upheaval and long-term financial turmoil that often follows when the debt cycle spirals out of control.

Debt and the Stages of Grief

​The feeling of uncontrollable debt can feel eerily similar to the feeling of losing a loved one. Which makes sense, because every dollar you give to your creditors is a dollar you can't invest in your future comfort, growth and prosperity – so in essence, you're mourning a life that you aren't able to live.

Denial

This is the period where your debt is slowly increasing, but you're sure you can still turn things around. Maybe you'll get a raise or a bonus at work. Hopefully you'll get a higher income tax refund than you expected…

Anger

Self blame starts to creep in. You start fixating on all the purchases you made on credit – especially the ones you don't use anymore – and can't stop asking yourself why.

Bargaining​

You're determined to get out of debt and set to work creating a plan. You write out a budget and manipulate all the numbers to the bare minimum. But you feel discouraged every time an unexpected expense pops up.

You renew your conviction to start fresh next month with a different approach, like consolidation. Though, it wouldn't hurt to reward your efforts so far with so much "needed" wardrobe additions, would it?

Depression

Nothing you're doing seems to be working. It feels like for every step forward you're falling two steps back. All your payments are going to interest while your outstanding balance just keeps on rising. You're ready to accept that you'll always be in debt and there's nothing you can do about it.

You abandon your budget and decide there's no point even trying to curb your spending anymore since it won't make any difference to your situation.

Acceptance

You decide that no matter what, you need to find a resolution to your debt problem. Perhaps you open up to your trusted friends and family about your situation, begin researching debt assistance programs online and consider other solutions aside from going it alone.

This is the point where most people usually reach out to a Licensed Insolvency Trustee to schedule a Free Confidential Consultation.

Help is Available at Every Stage

While most people wait for acceptance to contact a Licensed Insolvency Trustee, you don't have to. From the moment you begin struggling with debt, trust MNP to help you review your financial situation and understand your options. Whether you would benefit from a Life-Changing Debt Solution such as a Consumer Proposal or bankruptcy or another strategy, a Licensed Insolvency can help you find the financial fresh start you need.  

Based out of Victoria​, Chelsea Taylor is a Licensed Insolvency Trustee and Vice President at MNP LTD. To learn more about how Chelsea can help, contact our local office at 250.590-3034 or toll-free at 310.DEBT (310.3328).​

This article was originally written for MNP.  To view the original article, click here.

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