According to a 2008 Associated Press survey on stress and debt, 27 percent of people who reported suffering from debt stress contracted ulcers, and more than 51 percent had significant muscle tension. The emotional and health-related burden of debt can be just as severe as the financial one. Addressing that stress by creating a straightforward plan to repay debt can help resolve those issues more rapidly than would be possible otherwise.
Priority Paralysis
One way to tackle debt is to repay the highest-interest loans first. However, this can be psychologically intimidating, as those loans are also often the largest. This can cause people to fail to take action at all. An alternative strategy is to pay off the smallest debts first, working up to the largest, building a positive feedback loop. Either of those methods works, depending on your level of discipline. Well-known financial counselor David Ramsey advocates the latter approach, which he calls the "Snowball Method."
Under-Earning
Those who have more debt than they can reasonably service with their current level of income are in danger of a complete financial collapse. This can result from job loss or the simple error of over-borrowing. Student loan debt can be crushing to recent graduates, particularly those without clear career paths or training for lucrative professions. Getting deferments, selectively defaulting on loans, cutting expenditures or finding higher-paying work are all valid methods for dealing with this issue.
Social Debt Issues
Just as debt can cause physical suffering, it also can cause social problems. Marriages and partnerships can break down over disagreements about money management. According to a study that research scientist Jay Zagorsky with Ohio State University's Center for Human Resource Research conducted, as reported about in "USA Today," finances were one of the top three topics of arguments among married couples in the study sample.
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