5 tips to reduce money-related stress, from a behavioral wealth expert

Student loan payments have resumed for the first time since 2020, and many borrowers are dreading the effect it will have on their finances. That stress could also negatively affect their mental health.

Back in August, more than half of borrowers polled said they’d be forced to choose between fulfilling their loan payment and buying groceries or paying rent, according to a survey by Credit Karma.

These nerve-wracking financial decisions aren’t great for a person’s overall wellbeing. Consider that just last year 54% of student loan borrowers said their mental health issues like depression and anxiety were directly related to their debt, according to a poll conducted by online education program, ELVTR.

In honor of World Mental Health Day on Oct. 10, CNBC Make It talked to a financial expert with a background in psychology about how one can maintain positive mental health even with student loan debt.

DON’T MISS: 54% of student loan borrowers say their mental health issues like anxiety and depression are directly related to their debt

“We can’t just walk away from our student loans, but what we can do is minimize the amount of stress that we expose ourselves to,” says Wendell Clarke, a behavioral wealth specialist at Wealth Enhancement Group.

5 ways to reduce debt-related stress

Here are five ways that Clarke recommends minimizing the stress you’re feeling about your student loan payments.

  1. Identify what exactly is causing you stress: Ask yourself what specifically is stressing you out about your student loans, Clarke says. This can range from the amount of the payments to how long it may take you to pay all of your debt off. Getting to the root of the problem is a necessary first step before you can move forward, he adds.
  2. Know your coping mechanisms: “Understand what techniques you use to reduce your stress,” says Clarke. A few practices you can add to your list are taking walks, volunteering and expressing gratitude for what you have. Turn to your coping mechanisms when you’re feeling overwhelmed, he suggests.
  3. Set realistic expectations for yourself: Settle on a reasonable timeline that you’ll aim for to pay off your student loans, Clarke says. “Find what’s realistic based on [your] financial capacity, and be okay with that,” he notes.
  4. Create a spending plan: Track your spending habits to get a better sense of what you can cut back on to save more money, Clarke suggests. It may be helpful to get an app or join a program that can help you with your financial planning. Within your plan, include a budget for a reward system and your non-negotiables that you know will boost your happiness, he says.
  5. Consider picking up a side hustle: “If there are things you can do on the side, then that’s something that you should look into,” says Clarke. He recommends choosing a side hustle doing something that you really enjoy so that you’re more likely to stick with it.

What can you do if you’re unemployed or underemployed?

If you’re unable to afford your monthly loan payments, consider applying for an income-driven repayment plan. The Saving on an Valuable Education plan can bring your monthly payment down significantly.

Additionally, Clarke suggests tapping into a faith system for encouragement, surrounding yourself with supportive people who can help improve your emotional health and searching for financial resources that can assist you.

For everyone who’s starting to pay off student loans again, and borrowers who will be paying towards their student loans for the first time, Clarke recommends being patient and compassionate with yourself.

“Give yourself grace because we can be very hard on ourselves,” he says. “Readjusting, or adjusting, is not easy work. It’ll not feel great sometimes, but this is a part of the process.”

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