If you haven’t done so already, check out the Podcast I launched last week with Grant from Millennial Money. We’ve been spending weekends and a few extra work nights putting together our first 10 episodes! We’re obviously real excited to get them out and look forward to releasing more podcast throughout 2017. Now, onto today’s post on how to overcome debt and eliminate financial stress.

Before I dive in, I want to clarify: If possible, we should be accelerating the rate at which we pay down debt.

That’s what we’re doing right now —  maxing out our pre-tax retirement accounts and now paying down debt.

Now that that is out of the way, let’s launch into today’s topic:

How to Overcome Debt and Eliminate Financial Stress

According to TransUnion, the average credit card debt in America is $5,437. That amount TRIPLES for those who carry a balance month to month.

That’s legitimately scary.

As I’ve mentioned before, millennials are graduating with so much debt that they’re postponing marriage and having children.

After college, the next logical step for many of us is to buy a home. As life events take place, the amount we owe only goes up.

Debt is everywhere! At the end of the day, it’s a way of life.

This article will focus on 3 critical factors that can help us overcome the stress associated with debt.

The first is near and dear to my heart since I’ve had plenty of lengthy discussions about it. I’m guessing you have, too.

Good debt vs Bad Debt

I’ve seen this topic come up more often lately and I wonder why.

Having learned about personal finance in business school, we’ve been taught the power of leverage and of debt financed growth. Both receive a bad rap, but the most helpful way I can explain them is that being able to afford a home with a mortgage is a good thing.

But, I get it.

Some say all debt is bad.

Some say all debt is good (I’ve seen it argued).

I’d imagine most people fall into a bucket where they classify some debt as bad and some debt as good.

I’m in this camp since I see a car loan as bad debt but, as mentioned above, I see mortgage debt as good. It isn’t great to have mortgage debt, but it is good because the debt enabled someone to purchase the home in the first place. If everyone was required to have the full purchase price without being able to take on a mortgage, then only the elites could afford homes.

So, we can conclude:

No debt is great.

But, debt can be good if it is an investment in income producing assets such as education.

Remember, good debt doesn’t mean we can ignore a financial analysis of our ROI. Good debt doesn’t mean you can take it on blindly without understanding your opportunity costs.

Labeling it good debt and closing your eyes is the wrong way to cope with debt.

Which brings me to my 2nd point:

Appreciate Debt as a Motivator

I’m not saying you have to like it, but debt often has the ability to wake us up. Once we have that extra bit of clarity, we can see through that consumer matrix and realize what truly holds  value to us.

A lot of people give themselves credit for developing financial habits that help them crawl out of debt. What I see less and less of, is people appreciating the fact that the mountain of debt created enough pressure for them to pull it together in the first place.

That one “aha,” moment often comes from saying, “enough is enough.”

Ideally, we can learn the lesson without the debt, but as in my case, debt served as the spark.

My story began when I wanted to teach myself how to never be in a financially stressful situation.

So, if you’re not motivated I hope you don’t take this the wrong way! I’m not suggesting to take on debt to find your motivation.

Far from it.

I’m suggesting we give debt its credit. 😉

Debt as a Hedge Against Inflation

The last piece of good news out there is debt serves as a powerful financial tool. If you have debt, then you are actively hedging against inflation.

Hypothetically, if inflation were to shoot up, then everyone will likely receive an equally weighted increase in their salaries. The principal amount of debt stays fixed and will not rise in such an environment. Interest rates may fluctuate, but the amount you owe will not change due to inflation.

This is the same piece of wisdom people tout about when it comes to paying their last mortgage payment. In the beginning the mortgage payment might appear huge, relative to your budget. Over time, thanks to inflation, the last payment is often very small relative to our budget.


Not all debt is bad, especially debt that can help us obtain income producing assets such as an education. Even if we have bad debt, then let is serve as motivation to never face that financial stress again.

Worst case scenario, debt will always serve as a hedge against inflation.

How has debt helped you in the past? Any other tips or tricks for overcoming the stress associated with having a mountain of debt?


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