While much has been made of the damaging effects that increased debt levels and the general cost of living are having on consumers' pockets, there is little focus on the devastation that these financial hardships have on people's physical and psychological wellbeing.

"A number of international surveys confirm that money worries create enormous stress, particularly when they threaten the way people live, their homes, businesses and even families," says head of Go Banking, Toby Wooldridge.

Anxiety, depression, insomnia, headaches...

In a recent survey conducted in the US by Psychology Today, 20 000 respondents were asked which emotions they most often associated with money. 71 percent listed anxiety, 51 percent of those surveyed listed depression and another 51 percent cited anger (the survey allowed for more than one response). Those most stressed by money — and they weren't necessarily jobless — complained of more fatigue, insomnia, headaches and other stress-related complaints.

According to another survey of 1590 consumers with credit cards commissioned by Family Credit Counselling Service in Illinois, more than 75 percent had experienced some type of physical symptom — from headaches to nausea and an inability to concentrate — that they attribute to financial strain. 35 percent of debtors reported trouble concentrating at work and 17 percent acknowledged spending time at work dealing with financial troubles. Some even threatened suicide.

Wooldridge says that while it is easy to be paralysed with fear when it comes to facing your financial problems, by dealing with them head-on you will relieve the stress of worrying. As debt eats further into your limited resources, you need to implement a strategy to assist in reducing it.

Determine if your worries are justified

The first step is to determine whether your worries are justified. With South Africa's debt to income ratio at 82 percent, Wooldridge cites a few warning signs:

• You owe more than you own.

• On a monthly basis, you spend more than you earn.

• More than 40 percent of your income goes towards paying off your debt.

• More than 25 percent of your income is spent paying interest on the debt.

• A great many of your bills are two or three months in arrears.

• You have trouble sorting out whom you are going to pay each month.

• You have been requested to return a credit card or store card.

• Your bank account has been closed.

• A debt judgement has been obtained against you.

He says that to overcome a debt crisis requires a plan along with persistence, focus, commitment and vision. "The basics of debt reduction are simple. Cut down on your variable spending and put the extra money towards your debt payments. Once you determine the maximum amount you can pay off each month, pay down the debt with the highest interest rate first — that usually means your credit card balance — while paying at least the minimum monthly amount due on all other revolving bills."

Outside of fixed monthly bills, many South Africans don't have a precise idea of how they spend most of their money. "If you want to get your debt under control, start by figuring out your spending patterns and identifying unnecessary expenses. Try to reduce your fixed expenses, take steps to lower your household bills, refinance your mortgage to get a lower interest rate or, if you have a good payment history, ask your credit card company to lower the interest rate you're charged," advises Wooldridge.

Practical ways to reduce debt, avoid debt traps and take control of your finances:

1. Tally the expenses on your list and compare the sum to your monthly income.

2. Prioritize — decide what constitute essentials and what are extra.

3. Assess each debt, its terms of repayment and the monthly interest you are paying.

4. Consolidate your debt. Borrow enough from your bank to pay off smaller debts in one go. By doing so the bank will be your only creditor.

5. Close accounts and tear up credit and store cards as you pay them off.

6. Arrange to speak to those to whom you owe money — they will be more understanding if they see you have a plan and are prepared to make sacrifices.

7. Don't make any investments while you have a high debt as the interest you pay on your debt is likely to be higher than any returns you will receive on an investment.

8. Don't be afraid to downsize.

9. Consider a part-time job — it allows for additional cash-flow.

10. Use cash instead of credit, research shows those that do spend 12 to 18 percent less whenever they shop.

11. Ask for professional assistance if you are having trouble coping on your own.

12. Schedule a few (inexpensive) rewards to prevent slipping back into old spending habits.

"Digging out of debt is not an insurmountable challenge. The solution begins with an attitude adjustment and a declaration of personal revolution, undertaken in small steps that will result in dramatic change," says Wooldridge.