Hiding from debt? Here’s how to stop.

“I’d give you a straight answer about what [my debt] is, but to do that I’d have to look straight at it. And I don’t know if I’m ready to do that, or if I ever really will be.”
–Eva Hagberg Fisher, “I’m Definitely in Debt, But I’d Rather Not Say How Much,” Buzzfeed

It’s hard to imagine anything more important than knowing what you owe. Yet it’s also surprisingly hard to see it, particularly if you have a lot of debt.

How can so many of us simply look the other way–for years, even decades–while our debts mount up? For me, it was that the numbers were never quite real. I had to physically see the size of my debt before I could grapple with it.

Here are four ways we avoid seeing our debt–and a simple prescription for turning around to face it so you can finally get past it.

“We’re comfortable enough, even with a little debt.”

We live in a society that runs on debt. The companies who make us home loans, car loans, student loans, and shiny credit card offers work hard to keep us there, with low-interest offers, rewards, and debt transfers that seem like a great way out of trouble. Yet all the things these companies offer us, from minimum payments to generous terms, are aimed at one thing: keeping us paying.

Lenders are not really in the business of giving us priceless experiences to make us happy. Nope. They’re in the business of charging us as much as they legally can for the use of their funds. That’s why they give us such a long time (or forever) to repay them. It’s not because they love us. It’s because they love our money.

A lot.

Lenders are not really in the business of making us happier and giving us priceless experiences. They are in the business of charging us as much as they legally can for the use of their funds.

If you pay only the minimum on a ,000 credit card debt at 18% interest, it will take you almost ten years to pay it off. During that time, you’ll pay $923 in interest. That’s a 100% return over a ten-year period for your creditor. Pretty sweet (for them). The same $25 you were paying to that credit card, if saved at only 2% for the same ten years, would have earned you close to $3,400. Ouch.

All you have to do is double your payment–from $25 to $50–to get that debt paid in two years, with an interest charge of just under $200.

Sadly, most of us don’t wake up to this reality unless it becomes painful; when, for example, we’ve maxed out all our cards or are now making so many debt payments each month that we have nothing left over. Don’t wait until the pain to get your debts in hand. Take a hard look at what you owe now. Make it your goal to pay it down.

“I’m paying my debts on time.”

If you’re making payments on time, it’s easy to fall into complacency. This is especially true if you’ve accepted the not-so-wise “wisdom” that debt somehow helps your credit score. Problem is, especially if you are only making minimum payments, you’re stagnating or even falling behind. The marketplace, which does not have your interests at heart, should not determine your strategy: on-time minimum payments will never be enough to address debt. Get in the habit of dedicating whatever you can afford to paying extra principal as well as the basic payment you’re told you owe.

“I’m tracking my debts. Look at my spreadsheet!”

This is the most insidious denial. This was me, too. I had (and have) a fancy spreadsheet with all the numbers broken down. You never saw someone crunch and compare like I crunched and compared.

Yet the debt moved a few points, slid back, moved again, slid back again.

What was wrong with this picture? I’ll tell you: It wasn’t a picture at all. My debt was just a column of numbers to me, not tangible, not visceral, not measurable. The result? My debt wasn’t urgent enough to force a change of habits. I stagnated for years this way, tracking my debt instead of seeing it.

“I already know my debt is out of control. Looking will just make me panic.”

Trust me, I’ve been there. If you’re like author Eva Fisher (or uh, me), you’ve already hit the desperation point, and your debt is keeping you up nights, whether or not you know the actual numbers by heart. You’re trying not to think about it, not to see it, and not to make your entire waking life about its burden and its shame.

If you are falling behind or paying too much to credit card and other debt, follow the steps at the end of this article to get a clear picture of your pain points. You may find that you need professional help to get out of the hole. Two things helped me when I was there:

• I paid something, however small, on every debt, especially medical debts, which infamously go into collections fast, but carry no interest. It’s a little-known fact that hospitals and doctors’ offices will negotiate with you if you are persistent. I once negotiated a $3,000 hospital bill down to three years of payments I can afford (still paying).
• I contacted the nonprofit National Federation for Credit Counseling to find a counselor who helped me restructure my debt. While there are pros and cons to doing this, it’s probably necessary if you are already paying 50% or more of your income toward credit debt and loans. I would never hire a for-profit loan or debt counselor until checking NFCC’s resources first.

Time to Ditch the Guilt

As fellow Wealthtender author Opher Ganel points out, we’re not automatons. If money were only about the numbers, it’d be way easier to manage it. Be very kind to yourself as you start to turn to face the music. Your emotions figure into your money decisions–and I’ll bet that some of your “worst” money decisions were made for very good reasons, often for family.

Now, you can use those same emotions to fight for positive change. Take a deep breath, tell yourself that it likely can’t get much worse unless you continue to ignore the obvious, and settle down to see. your. debt.

Count Up All Your Debt. That’s Right. All of It.

If you are not already tracking your debt, start now. You can use an app like Mint, Quicken, or Personal Capital, or do what I do and keep an old fashioned spreadsheet. Whatever you do, take your time. If you have been ignoring your debt for a while, this process will likely be painful. Set aside a week or so to chase down your balances, payment terms, and interest rates. Gather them together and set up a way to rank them, by biggest to smallest, or highest to lowest interest rate, or coming due soonest.

While you’re at it, if you have not started to track and budget your expenses, open up a tab to do that too. Here are a few choices of how to budget.

Whew. That was not fun. I promise this next part will be better.

Make Your Debt Physical. What Would it Look Like If…

When I started to heal my debt last year, I took a cue from J.D. Roth of Get Rich Slowly (actually, from his reader Alissa) and Kitty of Bitches Get Riches:I chose a method for making my debt countable in physical terms. For me, that was a debt chain. That’s right: I figure when the going gets tough, the tough drape themselves with chains made from old Smithsonian magazines.

Months later, I can’t tell you how satisfying it’s been to slowly take links off each chain, sometimes consolidating when I reconfigure debts, and generally seeing the progress created by my hard work and sacrifice. I won’t lie: I still have a hella lot of chain links left to go. But I’ve turned what could have been drudgery–scrimping and hustling little sums to pay off huge sums–into a sort of game.

I was so scared at first that I only “chained up” a few smaller debts, but now I’ve gotten bold enough to make chains out of my mortgage and my husband’s terrifying-don’t-even-ask-about-them student loans.

Ready to visualize your debt? I have tips here at my blog at Medium, The Traumatized Budget, for you to get started. Good luck, and don’t lose your nerve!