Sometimes being in debt is as much of an emotional issue as a financial one.
A 2026 study by Freedom Debt Relief and Money.com that surveyed borrowers with at least $10,000 in non-student loan, unsecured debt found that participants were just as motivated by emotional reasons as by financial ones for paying off debt — if not more so.
The two most common responses to what motivated respondents to get out of debt were regaining control and feeling financially stable (48%) and stopping feeling stressed or anxious about money (48%).
“In my opinion, one of the reasons to become debt-free is because of the psychological weight of it,” money coach Bernadette Joy tells Business Insider. “Specifically feeling like some part of your finances are beyond your control, or not within your control, or that you owe some part of your paycheck every month to somebody else.”
With her clients, she finds debt can become overwhelming because it’s such a routine part of everyday life in the US. Joy tells the story of a client who said she was debt-free, completely forgetting about her car loan until she calculated her net worth. “We so normalize everything about payments and not the actual total principal,” Joy says. “So once people realize that this is more than just payments, it’s actually larger sums of money, I think it can be very overwhelming.”
Here are five reasons why the psychological toll of debt can become overwhelming and stand in your way.
1. You focus on what you’re missing out on by paying down debt
Financial FOMO is real. It’s easy to resent every dollar you put toward debt when you’d rather spend that money elsewhere.
“They’re thinking about everything else that money could be doing,” Jasmine Johnson, certified financial therapist and founder of Happi Money, says about some of her clients. “I could be going on vacation, I could be saving,” she continues. “That can become overwhelming.”
Johnson recommends consciously choosing to view your debt payments differently. If you make a $500 credit card payment, she says you can shift your mindset from “I just lost $500” to “I just got $500 worth of my financial freedom back.”
“Most of how we handle our money comes from our mind,” Johnson says. “It’s what we’re telling ourselves, right? We can psych ourselves up to do so many different things, and it’s the words that we’re telling ourselves internally and verbally out loud that play a huge part in that.”
The more you pay down, the closer you are to paying off that debt, and the sooner you can start spending that money on other things.
2. Fear of your debt activates your fight or flight response
Money coach Joy, who is also an author and the founder of Crush Your Money Goals, tells Business Insider that she sees her clients use all four fear-coping strategies for dealing with debt: fight, flight, freeze, and fawn.
She says the fight response usually means tackling debt head-on and paying it down aggressively, which kicked in for her personally when she found herself with more student loan debt than she expected.
She finds the other three responses are more common with her clients, though. Many choose flight and ignore the magnitude of their debt. Others fawn, praising her work as a money coach, but feel ashamed of their debt internally. Others freeze.
“Because a lot of my clients tend to be higher-earning professionals, they freeze by overanalyzing and basically doing kind of like analysis paralysis, where they’re like, ‘Let me let me listen to like 10 more podcasts before I decide what to do,'” Joy says.
3. You burn out when paying off debt
Johnson finds it’s crucial to celebrate each milestone in your debt-payoff journey. If you just power through — tap into that “fight” coping mechanism a little too hard — you risk burning out.
Instead of tunnel-visioning your way to paying off all $40,000 of debt, for instance, maybe you can celebrate each time you pay down an additional $1,000. She says the celebration doesn’t have to be big. Maybe it’s just hanging out with friends, buying cupcakes, or even eating your favorite fast-food meal.
“As you celebrate and you split out your debt into little milestones, it starts to build that self-trust that you can do that,” Johnson says. “It starts to build that confidence, and in turn, momentum, because now you want to keep going because you’re almost there.”
4. You’re taking advice that isn’t for you
Another reason debt can feel so overwhelming, Joy says, is because Americans are inundated with what she calls “piecemeal” financial advice; that is, financial advice that doesn’t take into account your personal financial situation.
Joy points to a common example in her clients: contributing to their 401(k)s. She often sees clients following the “generic” rule of maxing out their 401(k) match while sitting on fast-growing debt with a 20% interest rate.
“And then they get overwhelmed because they’re like, ‘Well, I’m doing what the experts told me to do,'” she says. “But the experts don’t know your personal finances and don’t know that you’re also carrying student loans and a mortgage and a car loan and credit card debt.”
When you piece together sound bites of financial advice without looking at your whole picture, she says, you can easily become overwhelmed.
5. You don’t have a plan
But Joy and Johnson both emphasize the importance of setting up a plan. “Debt can feel overwhelming because psychologically we want it gone immediately, like a long time ago, right?” Johnson says. “But if something has taken years to accumulate, then it realistically is going to take years for it to be paid off.”
Your plan might be the debt snowball, which builds momentum by prioritizing small balances first, or the debt avalanche, which reduces lifetime payments by targeting the highest-interest debts first. Or, it might be calling in professional help, like a credit counselor or debt settlement program.
Debt settlement involves working with a debt relief company like Freedom Debt Relief, which can negotiate with creditors on your behalf with the goal of reducing your total amount due. Consumers typically set aside funds in a dedicated account throughout the program, which are used to pay settlements as they’re negotiated and approved.
Debt settlement tends to be a better fit for people who are overwhelmed by their debt, and maybe even considering bankruptcy. Debt settlement programs typically take 24 to 48 months, and there may be temporary credit impacts during the process depending on factors such as payment history and account status.
Remember that a legitimate debt relief company will never guarantee results (the negotiation is a process) or ask for payment upfront. Legally, debt relief companies can’t collect any fees until a negotiation is complete.
No matter what debt payment plan you put in place, Johnson says it’s crucial to not get down on yourself if you have to change it. Life happens. If you need to adjust your timeline, she says, don’t lose trust in yourself.
Created by the Commerce Team at Business Insider with Freedom Debt Relief.