Most Americans don't have a plan to deal with an average debt of $37,000

If you throw money hard enough, maybe your problems will just go away.

That seems to be the American philosophy for dealing with debt, according to a new study from Northwestern Mutual.

Almost half of Americans are at least $25,000 in debt, with an average debt of $37,000. One in 10 of us owe over $100,000. Without a clear plan on how to pay it off, more than 40 percent of Americans spend as much as half their income on debt.

“Building financial security while saddled with high debt is like running a race with a weight around your ankle,” says Rebekah Barsch, VP of planning at Northwestern Mutual. “Being proactive about strategically managing the debt you already have is integral.”

But, most Americans don’t have a plan to manage their debt, strategically or otherwise, according to the study.

No way out?

These are the best solutions Americans can come up with to manage their debt…

  • 35 percent say they pay as much as they can to each of their debts each month
  • 19 percent say they pay off debts with the highest interest first and make minimum payments to others
  • 18 percent say they pay what they can when they can
  • 17 percents say they make minimum monthly payments to each creditor

That second method, focusing on the highest interest debt first, is the best of the options listed. That’s the debt costing you the most money, so getting rid of it first helps you save money — once it’s out of the way, you can put the interest you’ve saved, along with the payment you were making, toward the next-largest debt. Experts call this the “snowball method,” and it works — but it needs to be paired with proper budgeting.

Why getting out of debt is important

Aside from being a financial burden, debt is a significant source of stress among Americans. While 40 percent say that debt has a “substantial” or “moderate” impact on financial security, they also say it is a “high” or “moderate” source of anxiety.

Research on debt and health shows that having high debt is really not good for us. People with higher debt report they are in poorer health than people without. According to the report, stressing about money (or anything else) produces a hormone called cortisol, which over time contributes to gaining weight and weakens our immune system. It also says that long-term stress is linked to increased blood pressure, cholesterol, obesity, diabetes, and more.

In fact, research from earlier this year suggests the more debt we have, the sooner we will die. People with larger delinquent debts, meaning debts that are months behind on payments, are more likely to die before those with lower amounts. Researchers also determined increasing an individual’s credit score by 100 points reduced their risk of mortality by four percent.

Researchers evaluated mortgage delinquency data during the housing crisis and the Great Recession. They determined that that debt puts us in poor health, not the other way around.

“Our research sheds light on the extent to which macroeconomic shocks, like the Great Recession, adversely impact our health,” says Laura Argys, University of Colorado economist and study co-author. “Debt resulting from the financial crisis has had lasting effects on health that are substantial enough to increase mortality rates.”

Even further research shows money is the top stressor among Americans. In a survey conducted by the Harris Poll, nearly three quarters of Americans reported they felt stressed about money. Aside from the stress of money affecting the way we physically feel, some Americans skip seeing a doctor when they need health care because of the expense.

Earning more money may sound like an easy way to fix our debt stress, but may not be a possibility for some. Speaking with a financial adviser can help to set a plan to minimize debt can help reduce the stress of debt and risks to your health.

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Article last modified on May 23, 2017. Published by Debt.com, LLC .