Financial therapist Amanda Clayman shared a few crucial mindset shifts that can help you get out of debt, stick to a budget, and start saving money.
Amanda Clayman
As inflation booms, many Americans feel like they're in their own personal recession. Most people have drained their pandemic relief savings, racking up debt in the process.
While everyone's financial situation is different, there are mindset shifts that can help anyone save more, whether they're a cushy DINK or an ALICE living paycheck to paycheck.
Amanda Clayman, a financial therapist and host of Fresh Produce Media's Audible series "Emotional Investment," told Business Insider that many people avoid thinking about money problems, which in turn makes them worse.
She said some people can try to "white-knuckle" their financial goals, believing that once they reach them, they won't have to worry about money again. But she said that isn't always realistic or easy, especially if you might be facing years of debt payments.
Clayman shared a few simple mindset shifts that have helped her clients when faced with different financial issues. Doing so is the first step to finding budgeting hacks and paying off debt.
If you feel overwhelmed by the idea of budgeting, Clayman said you should get to the root of why you're overwhelmed. Sometimes, it's less about your financial circumstances and more about having an expectation that life at this point would be different, she said.
For example, you might have banked on being promoted by now and feel discouraged by your current salary. Clayman said it's important to "mourn your old expectations, and find a way creatively to discover the opportunities for joy and peace while these are your circumstances."
"Surrender to the reality that this is what it's going to be for the foreseeable future," Clayman said. That helps you take action, rather than hope things change on their own.
Saving is tough when you feel like your life is all work and no thrill. "That's where it becomes really dispiriting and hard to show up," Clayman said.
You need a deeper reason to stick to your goals if saving money will require both working a lot and turning down some fun experiences. That reason can be to raise a family or fund a life of travel.
"The reframing can be around 'how do I find dignity in this effort or struggle?'" Clayman said. In paying off her own $19,000 debt in her 20s, she had to develop "a different definition of strength and what's cool and what's valuable," she said.
It helped her be more honest with friends about when activities were too expensive for her — something she avoided doing in the past.
When you're younger, it can be tempting to live life to the fullest and not think too much about money. But that can lead to serious debt later on.
"On the one hand, there could be an almost unlimited amount of money that one could spend right on travel and experiences," Clayman said. "But we also have this other value tool that we're trying to make room for, which is long-term security."
Rather than choosing between one or the other, Clayman said to look at saving and fun as a "both/and" situation.
It might mean getting creative with wedding arrangements, finding a lucrative side hustle, or even traveling the world to spend less on rent.
If you're saddled with student loan debt, it's easy to blame yourself for a decision you made when you were 18.
But regret can ruin your confidence and motivation to do anything about it.
Instead, Clayman said it's wise to "accept that there are parts of this choice that are really painful," without making the experience part of your identity.
This is especially important as big debts are seldom paid off super quickly. Clayman said some people "feel so ashamed and overwhelmed at the idea that this debt is an unmovable burden" that they don't engage with it at all.
She said the better move is to "focus on how to be ok with limited control." Even if you don't have a full solution yet, it's always more beneficial to stay on top of what you can reasonably manage than to shut down and keep adding to the debt.
After all, Clayman said, "you can't fully rebel against the debt without it being worse for you than for your lender."
