What debt does to self-esteem (and how to make it better)

Debt is hard enough without adding ✨ shame ✨to the mix 

Illustration of card looking at itself in a mirror

Unwanted debt can come out of nowhere, particularly during the shitstorm which has been the past two years of the pandemic. 

And American household debt hit a record $15.84 trillion in the spring of 2022. That number looks like this when you write it out: $15,840,000,000,000. Great times 💖


Debt can do some severe ~emotional damage~ to our self-esteem a.k.a how we value ourselves. Living in the negative brings all the negative feels: feeling trapped, stressed, anxious, and depressed. 

There’s a link between the amount of debt you’re in and the amount of alcohol you consume. One study found that college students who used alcohol had more credit card debt than non-alcohol users. 28% of alcohol users had credit card debt over $1,000 compared to 18.3% of non-alcohol users.

Having debt looming over us also impairs cognitive function - it’s harder to do standard human brain stuff like learn, remember, be attentive, or problem-solve.  

Since our brain is part of our body, low self-esteem and stress can impact our physical health too, from back pain to migraines to gut problems (we promise this article will get more fun, bear with us). 

Debt is really darn scary. It’s easy - and common - to get into a “fuck it! I’m already in debt, baby!” downwards spiral when you’re feeling overwhelmed. We buy more to numb the feelings, but the feelings are inevitably like, “hiiiii we’re still here bestie” 🙋

So you’ve been hit with an unexpected debt and you’re feeling like shit. What do you do? We gotchu!

Step one: manifest having more money ✨ (If this doesn’t work straight away, you’re obvs just not manifesting hard enough.)

Step two: Manifest harder!!! 🤬

We’re obviously just JKing. 

Self-esteem is like a muscle - it’s built on actions rather than thoughts alone. 

We’re not totally cynical. Building self-esteem can start with a thought. Such as, ‘I deserve a life without debt.’ It takes a lot of power to get to this point. But it’s built on action. 

There’s a clear distinction between powerful positive thoughts and grifters promising that if you just visualize a big pot of money drifting towards you on a river of gold then all of your problems will be fixed. 

Then they make you feel like shit because you couldn’t think your real-world problems out of existence hard enough 🙇

Has anyone noticed that money manifestation works best for those our economy already benefits? Don’t doubt the real power of setting money intentions, but don’t be afraid to call out BS.

In Part 2 of our article about money and mental health, Spill psychotherapist Graham Landi spoke about the importance of setting goals, gaining motivation, and aligning desires to improve our personal finances. You have to “create a compelling picture of the future that makes you say yes.”

Once you have this, start implementing small changes to your personal finances. $20 a week, however small you need to. 

If you’ve been on an “if I pretend I can’t see this debt then it isn’t real” vibe, then the first thing you have to do is face the reality of your finances. 

 Shameless plug, our budgeting app makes personal money management a lot easier. You can:

- make monthly targets 🎯

- break down spending 📊

- manage bills ✉️

- track your  daily ins and outs, spending categories, and top merchants 💲

Like we said, start small if you have to. It’s all about building momentum so that you can climb (or crawl) out of the downwards spiral of shame. 

Hold yourself accountable along the way. One way spending damages self-esteem is because we betray ourselves. The sensible part of us is like “I neeeed to stop spending so much money on takeout food” and then we go ahead and order it anyway. Fun sometimes, but eventually this kind of behavior takes its toll on our self-belief.  

Shameless plug #2: Cleo’s roast mode is a great way to hold yourself accountable for bad habits. 

Throughout the process, think about the language you’re speaking to yourself with.

Roasting yourself is NOT the same as hating yourself. Okay, you’re not where you want to be. You wanna be somewhere else, and it’s going to take a while to get there. But you can be a bit gentler to yourself along the way. You can’t hate yourself into being better, it’s actually not a very effective way to change.

Having a PMA (positive mental attitude, not to be confused with PMS) is equally as important as holding yourself accountable. If you’re struggling to muster the 🌈vibes 🌈, we can provide them for you with Cleo’s hype me feature. 

Try and remember that loads of people are in the same boat with debt - we just don’t talk about it enough, and largely the problem is with our financial system and lack of education. Most of us are out here learning about money the hard way. It’s not totally on you.

Because debt isn’t inherently negative 

It’s important to learn how to get out of debt and rebuild self-esteem so that we’re not afraid of it. 

As a generation, Gen Z is particularly skeptical of taking on debt. But it can be empowering, paying for education and allowing for a sense of mastery.

In fact, researchers found that the more credit card and college loan debt held by young adults aged 18 to 27, the higher their self-esteem and the more they felt like they were in control of their lives. 

The effect was strongest among those in the lowest economic class, who experienced the most financial freedom from their loans. 

So debt can be cool. But it shouldn’t be ruling your life. And it definitely shouldn’t be making you feel like shit. We’ve got your back.

Enjoy this post? Def give it a share or send it along to a friend. You never know, it could make a big difference. And of course, if you want to try the best money app in the world for free, just hit this link right here.

Big love. Cleo 💙

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