Why you shouldn’t feel guilty about spending when you’re in debt

If you’re in debt, paying it off is probably one of your top priorities. You’ve probably rearranged your budget, cut out non-necessities and focused your cash flow on your monthly debt payments.

However, if your budget is too strict or you don’t have one and feel anxious about your finances from month to month, you could be doing yourself a disservice. Your budget may not allow any room for non-essential spending, making it difficult to stick to.

Paying off debt generally isn’t done overnight. Giving yourself permission to spend money on what matters to you – without guilt or fear – can help you manage both your mental well-being and your commitment to debt repayment.

Overcoming the guilt of non-essential spending

As you pay off your debt, you might feel the pressure to pay off your debt as soon as possible by cutting out anything that doesn’t contribute to that goal. When you’re in debt, buying a coffee, going out with friends or getting a new sweater may seem out of the question.

You’re not alone in forgoing spending and activities because of your debt. According to a survey by National Debt Relief, one-third (33 percent) of those with debt said they missed out on a night out with friends. An additional 38 percent said they skipped a date night, and 36 percent skipped a wedding.

Missing these life events – both large and small – can take a toll on your mental health over time. Skipping social events can close off connections with your friends and family. Major shifts in your life, like cutting out on rituals like your coffee routine and changing your habits to accommodate your new budget, can also contribute to this stress. This comes on top of the stress you might be under from having debt in the first place.

If you’re spending money on non-essentials, it’s natural to feel guilt over not using it on your debt. However, it’s important to weigh in on the cost-benefit analysis of the purchase in question.

Missing your cousin’s wedding might mean you can put an extra month’s payment toward your debt. However, seeing your family and the memories of a loved one’s life event might be worth more to you than a bit of saved interest.

Determining how much saving or spending is too much

Saving, spending and paying off debt is all about balance. Spending too much can break your budget and leave you without the money you need for necessities. On the other hand, it is possible to leave yourself without room to spend money on what you care about. How much is too much?

Your primary benchmark for your spending and saving should be your budget. Having enough money for your housing, transportation, utilities and debt payments should be your number one goal. Plan your debt payments so you know how long you’ll be paying off your debt and save on interest in the long run.

How to tell if you’re overspending

If you can’t cover your essentials or stick to your budget, you might be spending too much on non-essentials or not bringing in enough money. In either case, it’s time to crunch the numbers on your monthly finances.

Analyzing your spending will help you determine if your money is being put to the best use. If you’re spending a lot of money on eating out or shopping, it’s a good idea to redirect your spending toward your essentials.

If you’ve already cut out your non-essential spending and still can’t cover your basics, it might be time to supplement your income or make some major cuts, such as moving to a cheaper apartment. You may also need to consider some relief options.

How to tell if you’re oversaving

If you’re meeting your budget and making your debt payments each month, congratulations! Now it’s time to ask yourself: are you happy with how your finances are serving you?

Perhaps you’re thinking about increasing the payments you make toward your debt or have already maximized every spare penny toward doing so. While this can be a way to pay off your debt faster and save on interest, it may take a toll on your mental health if you prioritize your debt payments above all else.

Holding off on eating out, for example, can help you reduce your expenses. There is a difference, however, between eating out every night, eating out on special occasions and not eating out at all.

Eating out every night can cost you hundreds of dollars a week, translating to hundreds of dollars in interest from potential debt payments.

Eating out once in a while, however, might only cost you $100 every couple of months. It could also give you something special to look forward to during your debt repayment journey.

Not eating out at all might save you that occasional $100. It might also mean giving up going on a date, celebrating a life event or hanging out with friends on a Friday night for as long as it takes to pay off your debt. While it might translate to a bit of saved interest or paying off your debt a little bit sooner, you might get more mental mileage from being able to enjoy a night out every now and again.

Building a spending plan that achieves your goals

A budget, at the end of the day, is a tool to help you manage your finances and offer you peace of mind that you’re able to cover your costs each month.

If your budget isn’t working, it’s time to reevaluate it. This applies whether you’re not covering your costs or feeling anxious about your finances.

While your ultimate budgetary goal might be to pay off your debt as soon as possible, it’s important to keep other priorities in mind – such as managing the mental health of yourself and your household. Your budget should help you achieve both goals in a manageable way.

A debt repayment calculator can give you an idea of how much impact your payments will have on your balance and interest over time. A calculator can also help you see how a repayment strategy such as the snowball or avalanche methods would work.

Once you’ve figured out a payment plan that works for you, you can build your budget around your debt payments and essential expenditures. This will inform how much money you have left over for items outside your hard costs. You can also see how much you can put aside for nonessentials or additional debt payments.

The key things about having a “fun” fund are that it exists within your budget and that it has a hard amount set aside. This way, you have money you know won’t impact your debt repayment. You can rely on having it available from month to month and put a hard limit on it.

Even $100 put aside each month can go a long way if you plan for it. It might fund a month’s worth of coffee runs, a night or two of takeout or a fun shopping spree with a friend.

By budgeting ahead of time, you can stick to your repayment plan and give yourself the peace of mind that your latte isn’t going to break the bank.

Spending in debt doesn’t have to come with guilt

While paying off your debt will likely come with major changes to your budgeting, finances and day-to-day life, you don’t need to feel guilty every time you spend money. By setting realistic goals, you can pay off your debt in a manageable way without having to give up the things you care about.

Here are a few of the ways you can manage your feelings of guilt when it comes to spending in debt.

Stick to your budget

Your budget will be the major benchmark for managing your spending. It’s also the first line of defense in knowing you have enough money for both your wants and your needs.

By setting budgetary guidelines that achieve your repayment goals, you can rest assured that, as long as you’re sticking with your financial plans, your non-essential spending isn’t impacting your debt repayment.

Is that coffee in your budget? Go for it. Do you have enough money to cover your debt payment and go for a night on the town? Grab your dancing shoes. Did you keep your non-essential spending below your threshold this month? Buy that croissant. With a balanced budget, you can pay your debt and spend money with the assurance that you’ve got room for both.

Understand the why

Understanding the why of both your guilt and your spending can help reconcile what you’re feeling and how it relates to your finances.

If you feel guilty when you’re spending money on something that feels non-essential, ask yourself:

• Why am I feeling this guilt? It may come from a fear of not being able to make your payments, a sense of social stigma around spending money when you’re in debt or other issues. Taking the time to address this can help you lean back on your budget and reassure yourself that your spending is within your set parameters.
• Why am I spending money on this? By stopping and looking for reasons, you can direct your money to what will truly have an impact. If you know that buying a coffee will give you a needed pick-me-up that will last the entire day, you can acknowledge that your money is being put to good long-term use and appreciate what you’re spending it on.

Assess as you go

Checking in on your budget regularly – be it on a weekly, biweekly or monthly basis – can help you adjust your spending to a level you’re comfortable with.

If you go one week without any extra expenditures, for example, you might feel a bit more comfortable with splurging on a sandwich or a new pack of pens for your desk.

Seek help as needed

There are many resources available if you’re struggling with making payments and managing your mental health around your finances.

If you’re having trouble budgeting or managing your finances, consider checking out Bankrate’s budgeting hub for resources and calculators to help you figure out a spending plan. You may also want to speak to a financial advisor, some of whom offer pro-bono services for those in need.

If you’re struggling with making your payments, you may want to consider looking into financial resources available to you, such as housing assistance or food stamps. Debt settlement companies such as National Debt Relief can also help you reduce your balance and pay off your debt sooner.

Finally, if you find that your anxieties around your finances are inhibiting your day-to-day life, you may want to seek help from a licensed mental health professional or a financial health therapist.

What next?

Paying off debt doesn’t have to come with guilt. Being in debt doesn’t make you a bad person, and spending money on things that aren’t your debt doesn’t doom you to being in debt forever. Like everything, balancing your financial priorities and mental health will help you stick to your repayment plan and build financial habits that can benefit you for a lifetime.

If you want to learn more about managing your finances, your mental health and your debt repayment plan, check out Bankrate and National Debt Relief’s ongoing article series about all things debt. Watch this space for tips, tricks and exclusive stories from readers like you and their debt repayment journeys.