How Stressed Out Millennials Can Take Charge of Their Debt



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Have you ever met a person in debt who wasn’t stressed out? It’s pretty rare.


Millennials are no exception: According to a report from the Global Financial Literacy Excellence Center, 66% of millennials have at least one source of long-term debt, 30% have more than one source, and 54% of 30-and-over millennials are worried about paying it all back. Debt stress goes beyond just feeling worried, however. Young adults in debt have higher perceived stress and depression, lower self-reported health, and higher diastolic blood pressure.


Get a clear picture of your finances


While getting out of debt may feel like an impossibly steep hill, the first step is figuring out your budget and how much money you can set aside for debt repayment. If you don’t already have a budget, the 50/20/30 budget is a good starting place.


  • 50%: Essentials, i.e., your “overhead” costs like housing, utilities, transportation, food, etc.
  • 20%: Pay-yourself-first categories like emergency savings, retirement accounts, and debt repayments.
  • 30%: Lifestyle expenses that aren’t essentials like eating out, entertainment, travel, etc. Decreasing your lifestyle expenses will spare more money to save and pay down debt.


Next, figure out exactly how much debt you have, from student and car loans to credit cards and other loans. And no guessing, you need accurate numbers to create a solid plan you can feel confident about.


Make a plan to pay off debt


Now that you have a good picture of your budget and what you owe, decide how to want to pay down your debt. There are two common approaches: debt stacking or the snowball method.


With debt stacking, you’ll pay the minimums on all of your accounts and then put any extra money (from your 20% or 30% categories) toward the account with the highest interest rate. If you follow the debt snowball method, on the other hand, you’ll still pay the minimums on your accounts but then put extra money toward the account with the lowest balance. While you’ll save money on interest with the debt stacking approach, the snowball method gives you a psychological boost of paying off an account sooner than later.


Pro tip: Consider setting up autopay for all of your account minimums so you don’t have the added stress of remembering when your payment is due.


Ask for help


Looking for an easy way to relieve your debt burden? Sometimes you just have to ask. Try refinancing your student loans and/or negotiating for lower interest rates with your credit card companies. I Will Teach You to Be Rich author Ramit Sethi even has a phone script for calling your credit card company. Considering it could save you thousands of dollars in the long run, you don’t have much to lose by asking.


Finally, take care of yourself. Eating well, exercising, and spending time with friends and family are important ways to reduce stress and its toll on both your physical and mental health.


What other tricks or advice have you found helpful for paying off debt?