Do you know anyone who is completely debt free? The answer is probably no. Most Americans have an incredible amount of debt, with the average American credit card debt standing at $15,355. Additional debts include an average of $26,530 in auto loans and an average mortgage of $165,892. Just 20% of Americans live debt-free lifestyles.
Norway does provide a great example of how to manage personal debt, however: taking out small loans when you need them and paying them back quickly can actually help to mitigate money worries. However, it is perfectly possible to work towards a debt-free life, and positive thinking could help you to reach towards a debt-free future. Here’s how:
Benefits of Positive Thinking
One of the main goals of positive thinking it to eliminate negative thoughts: to strive to succeed rather than to focus on your failures. By visualizing a life that is free from debt, you are in a better position to make meaningful steps towards clearing your existing debt problems.
Being in debt can negatively influence every aspect of your life.The psychological and physical side effects of debt are considerable: you are twice as likely to suffer from depression and anxiety if you have debt and the constant strain of debt management can leave you struggling to sleep and also lead to weight gain. However, positive thinking can reduce rates of depression, improve your physical wellbeing and reduce your likelihood of suffering from cardiovascular disease. Because positive thinkers cope better with stress, you will be better equipped to deal with the more challenging aspects of mounting debt if you practice positive thinking techniques.
The key here is to use positive thinking to visualize the debt-free life that you want, and then taking proactive steps to create a path from where you are now to where you would like to be. This isn’t about ignoring reality. It is about focusing on, and believing in, your ability to change.
Psychological Benefits of Being Debt-Free
Of course, the path from debt to becoming debt-free isn’t an easy one. You will have to make drastic changes to your lifestyle and cut back on many areas of your current spending habits. Eating out, trips to the movies and retail therapy are all likely to take a back seat for several months, and many people even take much bigger and more drastic steps to clear their debt as fast as possible, such as renting out any spare rooms in their home, or giving up their car (and the existing debt associated with it) in favor of using public transport.
The psychological benefits of making these changes may be negative in the short term (because you are denying yourself the short term materialistic rewards many of us are used to relying on for our happiness) but in the long term, the psychological benefits of being debt free are much more real, long-lasting and significant.
Positive thinkers are better at finding the path out of debt because they are better equipped to look at their situation realistically, search for ways to improve it, and then learn from their experiences so they don’t plummet back into debt again.