Deep Dive

What is a debt-free mindset & how to achieve it

Emma Nunes-Vaz
January 16, 2024

What is a debt-free mindset?

A debt-free mindset is the belief that debt doesn’t rule your life. It is the understanding that debt, when not kept under control, can be a major source of stress and anxiety and can prevent you from achieving your financial goals. It is a perception focused on getting out of debt by curating a plan and sticking to that plan.

Why is it important to have a debt-free mindset?

Debt, when not under control, can be a major financial burden. Whether it’s the interest on your debt that adds up quickly or the financial sacrifices you have to make within your everyday life. It can take years to pay off and this can be a daunting reality to face as it leads to facing truths that other goals you have, such as retirement or a deposit on a house, may need to be kicked down the road.

Similarly, debt can cause stress and anxiety. When you are in debt, it is common to have a cloud of worry looming over your head. Worries range from making your payments on time to how you are going to afford to pay off your debt. This stress can take a toll on your physical and mental health and lead to negative outcomes as it makes you feel like you are always behind or that you will never be able to get ahead. Some negative outcomes could be getting yourself into more debt through emotional spending (no…you would not have bought that electric massager if you weren’t feeling so deflated about the balance on your credit cards). You might also stop monitoring your spending and your debt total stops decreasing. 

Whilst taking a break for your mental health is of utmost importance during your debt pay-off journey, it is still good to keep an eye on your spending to ensure you don’t get yourself into an irreparable situation that will leave you feeling even more down in the dumps.

Debt can prevent you from achieving your financial goals. When you are in debt, you are limited in how much money you can save, invest and it can have implications on your financial health. An example of this is that debt affects your credit score and a low credit score makes it difficult to apply for loans or credit cards making it even harder to get out of debt. As your debt decreases and you are deemed a more ‘trustworthy’ borrower by lenders, your credit score increases and therefore, your financial health improves. Whilst it may seem impossible with all the different due dates and interest rates to pay down your debt, that’s the exact reason Incredible was created. We want to give power back to you, the consumer by guiding you through the complicated process that is paying down your credit card debt. If this sounds like the right tool for you, download Incredible here (personalised link to the app store) to access that debt-free mindset you deserve.

How to achieve a debt-free mindset

1. Understand the power of your thoughts

Your thoughts have a powerful impact on your reality. When you focus on the negative aspects of debt, it’s very difficult to achieve a debt-free mindset. By creating positive connections, that matter to you individually such as more financial freedom or peace of mind, it’s much easier to sustain a positive mindset

2. Get a plan of action in place

The first step to getting out of debt is to create a plan to empower yourself with the knowledge of what you need to do, for how long, in what order and what you’re aiming for. Luckily we’ve got a couple of blogs for you to find out how to do exactly that: here and here 

3. Get help from a professional

If you’re struggling to adjust your mindset on your own, it can help to speak to a financial adviser who has helped many people before you and will help many people after you. Sometimes it only takes slight tweaks to change perspectives on a situation, and sometimes that takes getting out of your own head which is where a professional can help.