How to Tackle Debt While Still Enjoying Life

Debt can feel like a dark cloud hanging over your life, and unfortunately, many young Americans are caught under its shadow. Only 23 percent of young adults in the U.S. claim to be debt-free, with the majority carrying over $100,000 in non-mortgage debt. The numbers are staggering, but they don’t have to define your life. The good news is that there are ways to dig yourself out of debt without completely sacrificing your quality of life.

How Did We Get Here?

Debt often creeps up gradually, making it hard to recognize the full extent of the problem until it feels overwhelming. The most common type of debt among young adults is credit card debt, with 67 percent of 18- to 34-year-olds reporting they owe money on their cards. This is even more prevalent than student loan debt, which affects 48 percent of this age group.

A significant factor contributing to this is the phenomenon of FOMO—Fear of Missing Out. According to a survey by CreditKarma, 40 percent of millennials admitted to spending money they didn’t have to keep up with the social lives of their peers. The pressure to maintain a certain lifestyle can lead to rash financial decisions, often driven by emotions rather than logic.

Financial expert Rafael Robert points out that this culture of “enjoy now and pay later” is pervasive, but it often leads to less joy in the long run. Studies show that delaying gratification actually results in greater happiness, as paying for something upfront and enjoying it later feels like a reward. Shifting from instant gratification to thoughtful, deliberate spending is crucial for long-term financial health.

How Do I Dig My Way Out of Here?

It’s easy to see debt as an enemy, but debt itself isn’t inherently bad. It enables life events like buying a car or a home, which most people can’t pay for in cash. The key is to master your debt rather than letting it master you.

• Prioritize Your Payments:Start by paying off the debts with the highest interest rates first to minimize the amount you’ll pay over time. If you have extra money, put it toward debt repayment before savings, since debt typically has a higher interest rate than most savings accounts.

• Maintain a Consistent Budget:Financial planner Dr. Sonya Britt-Lutter suggests setting a consistent monthly amount for debt repayment. If you’re paying $250 a month on a car loan and manage to pay it off, redirect that $250 toward your credit card debt rather than spending it elsewhere. This approach keeps your budget stable and helps you stay proactive.

• Try a Spending Diet:To give your budget a boost, consider going on a “spending diet.” This could mean avoiding entertainment expenses for a weekend, skipping eating out for a month, or making coffee at home instead of hitting the drive-thru. Like a food diet, a spending diet is easier to stick to when it’s temporary, and it can help you save money without feeling deprived.

• Find Your Financial Motivation:It’s important to understand your psychological relationship with money. If you feel rewarded by small wins, consider paying off your smaller debts first to build momentum before tackling larger ones. Conversely, if you need a strict plan to stay on track, you might need to cut back aggressively on discretionary spending.

How Do I Ensure I Stay Out of Debt?

Managing debt is similar to maintaining good nutrition. Just as crash diets can lead to weight gain once they’re over, extreme debt reduction strategies can backfire if they’re not sustainable. Britt-Lutter advises expecting setbacks but not letting them derail your progress. If you slip up, confront the issue, learn from it, and keep moving forward.

Clint Hodgdon of brightpeak financial suggests building a cash reserve for unexpected expenses and a general savings fund for future goals. Even if you don’t have specific plans yet, this approach helps prevent debt from creeping back into your life. And when you do need to take on debt, plan ahead to ensure you can manage the payments within your budget.

For couples, communication is key. Robert recommends going on a “money date” every six months to review and refine your debt strategy together. This keeps both partners on the same page and ensures accountability. After your financial discussion, celebrate with something more fun to maintain a healthy balance in your relationship.

The Bottom Line:

Getting out of debt doesn’t have to mean sacrificing your quality of life. By being proactive, consistent, and intentional about your spending and repayment strategies, you can regain financial freedom without feeling miserable. Stick to your principles, keep the long-term in mind, and you’ll find that you can live, give, and save the way you want—today and tomorrow.

If this article helped you, consider sharing it with others or subscribing to our newsletter for more financial advice and insights.