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Money Management International offers advice for understanding and addressing the effects of debt

Posted on April 16, 2013

HOUSTON (April 16, 2012) – Often, when creating a plan to eliminate mounting debt, consumers focus only on the debt itself, however the effects of debt are rarely limited to your savings account alone.

In order to create an effective plan, consumers need to first understand how a destructive relationship with debt has affected them – beyond dollars and cents.

Impact on credit score

Repairing your credit takes time – much more time than damaging your credit takes. The first step is to obtain a copy of your credit report. You’re entitled to a free report every year from each of the major reporting bureaus, which you can obtain at

Review your report. If you have accounts that have fallen past due, create a plan for how you’ll bring them current. If you have accounts in collections, reach out to the collection agency and try to negotiate a repayment plan.

MMI offers many articles and webinars on reading and understanding credit reports. If you need help creating a plan to bring accounts current and pay down your debt, consider speaking with a certified credit counselor.

Impact on personal relationships

Debt can cause us to withdraw from others out of shame or embarrassment, resulting in lost or damaged relationships.

A strong support system is going to be absolutely essential on your path to financial freedom. Learn how to be open about your finances. If debt has caused you to disconnect from loved ones, reach out and make an effort to rebuild those relationships.

For ideas on how to maneuver debt and finances in relationships, be sure to check out our Love and Money eBook.

Impact on self-image

Your debt does not define you, no matter how big or scary it may come to be. Still, it can negatively impact how we view ourselves as spouses, parents, employees, and friends.

Simply deciding to make the changes necessary to pay down your debt and improve your finances will go a long way towards repairing the damage caused to your self-image, but it’s important to make sure that you address that damage directly as part of your plan to become debt-free. As they say, money doesn’t buy happiness, but creating a solid financial foundation will relieve a lot of the stress that has prevented you from feeling the happiness you deserve.

Our eBook, Managing Debt to Improve Your Mental Wealth was written for just that reason. Be sure to check it out.