Feeling Embarrassed and Ashamed Of Debt? Take These Steps to Overcome Financial Anxiety, Guilt, and Shame

Feeling embarrassed, guilty, or ashamed about debt is completely normal—especially in a society that constantly tells us debt means we lack self-control, are bad with money, or have failed as adults.

Most people don’t talk openly about their debt, which only makes those feelings of shame and isolation grow stronger. If you’re struggling with debt, you might feel like you’re the only one in this situation. You’re not. In fact, a recent survey of employed Americans found that 68% had credit card debt.

If you’re struggling with debt, know that you are not alone and you are not a failure. AND, it is 100% possible to get out of debt without further berating yourself, feeling guilty, and internalizing these messages of shame.  

Keep reading to learn why debt isn’t something to be ashamed of, how to let go of the guilt, and practical steps you can take to regain control of your finances.

Why You Shouldn’t Feel Ashamed of Your Debt

Yes, debt can sometimes come from some bad decisions, but most of the time it is far more complicated that you did something “stupid” (as debt guru Dave Ramsey likes to say). 

I don’t believe that there are any truly “stupid” decisions. It’s important to remember that you were doing the best you could with the information and resources you had at the time. You didn’t take an action that you knew was stupid.

And if you did do something while knowing that it wasn’t the best idea, it was almost certainly because of a bunch of other factors. In other words, there are many perfectly understandable reasons why someone might get into debt, none of which are because you’re stupid or bad with money. 

Why People Really Get Into Debt

People get into debt for a variety of reasons, including:

• Medical expenses

• Divorce

• Unlucky events and circumstances

• High living expenses 

• Salaries/wages that are too low

• Lack of financial literacy

• Social pressures and expectations

• Mental health conditions

• Dealing with stress in other areas of life

• It’s what they learned growing up

• Lack of emergency savings

• Job loss

• Inflation and the economy

• Constant exposure to marketing and sales messages

• Social media and articles telling us all the things we need

How to Stop Feeling Ashamed and Take Charge of Your Debt

1. Practice Self-Compassion

As you can see from this list, there are many reasons for being in debt, many of which aren’t even within your control. And even if your debt is related to overspending, it is often linked to something deeper that is going on. So it is understandable that you got into debt and it’s important to forgive yourself. 

The reality is that being hard on yourself and getting stuck in the cycle of self-criticism only makes getting out of debt harder.

When you practice self-compassion, you soothe your nervous system, reduce stress, and create mental space to make clearer, wiser financial decisions. It helps interrupt harsh self-judgments and replaces them with acceptance and encouragement, which builds resilience and patience over time.

Try This

Imagine your best friend is struggling with debt under similar circumstances. What would you say to them? Now, write a letter to yourself using those same kind, supportive words. This simple exercise helps shift your mindset from blame to understanding.

Remember: Self-compassion is not about excusing mistakes or avoiding responsibility. It’s about recognizing your shared humanity and treating yourself with kindness so you can take empowered action toward your financial goals.

2. Rewrite Your Debt Story

If you’re feeling a lot of shame about your debt, chances are you’re seeing it as a personal failure. Every time you think about it, you might experience waves of regret and relive what you see as past mistakes.

But here’s the truth: debt is not inherently shameful or bad. Debt is simply a tool-it gives you access to money now instead of in the future. Interest is just the fee you pay for using that money before you’ve earned it. In fact, many wealthy people use debt strategically to build wealth and invest in their futures.

So no, debt itself isn’t shameful. Part of overcoming the guilt and shame is learning to rewrite your debt story so you can see how debt may have actually served you.

Try This

Think about the benefits your debt provided. For example, did your debt:

• Help you pay for a much-needed medical procedure?

• Cover bills during a time of job loss, low income, or another tough period?

• Enable you to leave a difficult situation or get through a divorce?

• Help you recover or cope during stressful times?

• Provide moments of meaning or joy when you needed them most?

• Help you get ahead by going back to school or pursuing an internship?

No matter the reason, your debt likely played an important role in your life at some point. Even if you now see it as a mistake, it’s important to honor the value it provided so you can start to heal your relationship with money.

Doing this helps you leave regret in the past and create a new, more empowering narrative. Instead of getting stuck in shame, you can view your debt as a challenge to overcome. Recognize that seeing the negative impact of debt means you now have valuable information to help you take control of your future.

By rewriting your debt story, you give yourself permission to move forward with compassion and create a new money story for yourself. 

3. Believe It Is Possible

A lot of people stay stuck in debt simply because they don’t believe it’s possible to become debt-free. They can’t even imagine what that would look like. That’s when all those feelings of failure and shame creep in. Instead of thinking, “This is possible and here’s what I can do about it,” you might find yourself stuck in, “Thinking about debt makes me feel terrible, so I’m just going to avoid it.”

But here’s the thing: once you’ve rewritten your debt story and started letting go of regret, the next step is to create a vision for your future. It’s about shifting from avoidance to hope—even if that hope feels small at first.

Hope is what takes you from feeling like it’s not possible to thinking about what you could to do make it possible. It opens your mind to possibilities and changes the way you think about it. 

If picturing yourself completely debt-free feels too far away, start by imagining what it would be like to simply have a clear plan and feel in control of your debt. Sometimes, just believing that you can take the next step is enough to get started.

Try This

Spend 20 minutes reflecting or journaling about what your life will look and feel like when you are debt-free or when you have a plan that makes you confident about paying off your debt. What will you be able to do? How will you feel? What will change in your day-to-day life? Let yourself really picture it, even if it feels a little out of reach right now.

Remember, believing it’s possible is the foundation for real change. You don’t have to know every step right now; you just need to believe that a different future is within reach and that you’re capable of getting there, one step at a time.

4. Create a Plan

Having a specific plan can make a huge difference, not just financially, but mentally and emotionally, too.

Without a plan, paying off debt can feel overwhelming and vague, like saying “I’m going to pay off my debt” but not knowing where to start. You might take random actions, hoping something works, but end up feeling stuck or unsure if you’re making any real progress.

The first step is to get clear on exactly what you’re dealing with. Make a list of all your debts: include the lender, total balance, interest rate, minimum monthly payment, and due date for each one.

Seeing everything laid out in front of you might feel scary at first, but it’s a critical first step in taking back control. (You can use the worksheet in my free Debt Payoff Guide to help organize this information.)

Breaking your goal down into clear steps makes it feel much more manageable. Instead of constantly worrying and feeling pressure to “do something,” you’ll know exactly what to do next. That sense of direction can take away a lot of the overwhelm and help you feel more in control.

Try This

Download my Debt Payoff Guide and go through the steps I’ve outlined to assess your situation and create a solid, personalized plan. It will walk you through figuring out where you are and what to do next, so you can move forward with confidence and clarity.

Enter your email address here to get the free guide:

5. Find Your “Why”

Paying off debt isn’t just about numbers; it’s about motivation. Humans are naturally wired to prefer immediate rewards over future ones, which is why saving money or sticking to a debt payoff plan can feel so challenging. It’s completely normal to want something now instead of waiting for a bigger payoff later.

(This is known in behavioral economics as “present bias.”)

The key to overcoming this natural tendency is to connect deeply with your bigger goals—your “why.” When you know exactly what you’re working toward, it’s much easier to stay focused and make choices that support your long-term happiness, even when it’s tough in the moment.

Try This

Reflect on why you want to get out of debt. Go deeper than “financial freedom” or “less stress.” Get really specific about what a debt-free life would mean for you. Maybe it’s being able to travel with your family, buy your own home, or simply feel at peace when you check your bank account.

Ask yourself “why?” for each answer you come up with. Keep digging until you find what’s at the heart of your desire. (I once heard someone say, “Ask why until you cry”—that’s when you know you’ve found your true motivation.)

Once you’ve identified your why, keep it front and center. Create a vision board, set reminders on your phone, or write it on a sticky note for your wallet. When things get hard (and they will get hard), reminding yourself of your why can help you stay on track.

The Debt Payoff Mindset

Paying off debt might sound simple—ust put more money toward your balances—but the reality is much more complex because of the emotions and beliefs we all carry about money. If you’re feeling overwhelmed, stuck, or unsure how to move forward, you’re not alone. Sometimes, having support and accountability makes all the difference.

That’s exactly what I’m here for. As your financial coach, I’ll help you create a personalized debt payoff strategy and give you the tools and encouragement to stick with it. Most importantly, I’ll help you feel better about your money and yourself.

If you’re ready to let go of debt shame and finally take control, schedule a free call with me. There’s no pressure or obligation—just a chance to learn more and see if coaching is right for you.

You deserve to feel confident and empowered with your money. Let’s take the next step together!