What Does Debt Do to Your Mental Health?

(Today’s guest post comes from Patrick Bailey. Patrick writes in the field of mental health, addiction, and recovery. If debt seems to bug you, you will find this helpful)

In a perfect world, you would never need to go into debt to buy a car or home, but the reality is that the cost of many essential expenses is high enough that most people eventually need to rely on some source of credit.

Today, the rising amount of debt among Americans is growing at a fast pace, and you might have gotten caught up in the need to worry about increasingly high balances. Currently, the average consumer holds $92,727 in debt. This could include credit accounts for school, a home mortgage along with credit cards or a student loan. 

While one might think that people who fall on the lower spectrum of the income scale would have the highest debt balances, the opposite is true. Americans who fall within the top 10% range of income have the highest amount of debt, and the average balance for people in this category is $222,000

(Editor: The average physician has much more including an average of more than $200k in student debt when starting their first attending job.)

Whether your debt comes from financing your college or a start up business, the truth is that seeing a staggeringly high balance is stressful. Understanding how debt affects your mental health and what you can do about it helps you start making a plan of action that benefits multiple aspects of your life.

What Is the Link Between Problem Debt and Poor Mental Health?

Your financial health impacts how you feel every day. Debt has a disturbing way of slowly creeping up on you, and you may be feeling the effects of carrying high balances before you even realize it. The weight of owing other people money is a heavy burden to bear. You might find that you worry frequently about your ability to make payments, or you may have started working extra hours to make sure that you can. Long hours at work can take a toll on your mind and body. If your debt spirals out of control, then you may also be dealing with the stress caused by having credit collectors harassing you for payment.

(Editor: I thought debt didn’t have an effect on me. Then I became debt free and felt a weight lift off my shoulders that I didn’t know existed. You won’t know debt’s true effect on you until your debt is gone.)

What Types of Mental Health Conditions Accompany High Debt?

Stress from debt can often lead to or contribute to more serious mental health conditions. In a recent study, approximately 53% of people with student loan debt reported experiencing depression. Anxiety can also reach severe levels. If you worry for the majority of the day about whether you can pay your bills or have trouble sleeping at night, it’s worth checking with a professional to find out if you have a mental health condition related to your financial situation.

How Do You Start Fixing Your Debt Problem?

Debt doesn’t have to slowly drain your mental health and happiness. You have options available to help you start working immediately on the problem. Taking these steps can help you regain some degree of control over your debt within just a short period of time.

Determine How Much You Owe

Burying your head in the sand might help you forget about your troubles for a moment, but it won’t help you to get your debt under control. Instead, you’re going to need to take a deep breath and dive into those anxiety-inducing bills. Once you know exactly how much debt you owe, you’ll be in a better position for creating a payoff plan.

Look for Ways to Increase Your Payments

Most people find that their debt escalates when they aren’t able to make more than the minimum payment. While making payments regularly does help to keep your credit score up, you’ll still want to avoid having all of your payments go straight to interest. You may be able to find extra money for payments by cutting out dining out. Or, you may be able to brew your own coffee at home and apply that extra money you save to your payments.

Decide What to Focus On Paying Off First

There are several ways to pay down debt, and you can pick one that works best for you. For instance, the snowball method involves paying off your lowest balances then applying that saved payment to the next round of debt. The avalanche method is where you pay off the debt with the highest interest rate first before moving on to the next one. Both can work for also helping you to feel a sense of relief with each account you pay off.

What Can You Do to Improve Mental Health While You Deal With Debt?

Unless you win the lottery, you have to expect that debt will take some time to pay off. But, there are things you can do to improve your mental health while you wait. Prioritizing your mental health during this time can also help you to break the cycle of debt. When you’re at your mental best, you’ll be more likely to stay productive at work and avoid unnecessary purchases. 

Create a Peaceful Living Environment

One simple thing you can start doing after you finish figuring up your budget is start picking up around your house. Too much clutter can increase the levels of the stress hormone cortisol in your body, and you might find being in a disorganized home too distracting to get things done. Decluttering your house could also help you to find items to put up for sale, and you can then put your unexpected income towards paying down your balances. 

Spend More Time Outside

Stepping outside exposes you to sunlight, which can have an instant effect on improving your general mood. You can also choose to go for a run or walk to get endorphins flowing through your body that help you feel better. Planning some outdoor workouts could also help your finances if you are able to cut out an expensive gym membership. 

Resist the Urge to Drown Your Sorrows

When your stress levels rise after receiving another high bill, you might feel tempted to drink or use other substances to alleviate your stress. But alcohol and drugs are expensive, and they can lead to issues that impact your income. If you find it hard to skip that glass of wine when you’re stressed, then you can seek affordable treatment by using your health insurance. When you’re sober, it is easier to think rationally about how you’ll handle your debt, and you’ll also find that your savings account will rise when you’re not buying bottles of booze. 

Find Inexpensive Hobbies to Relax

Going to expensive restaurants and other activities that require a credit card to enjoy only increases your debt and stress load. Try to find less pricey alternatives that still fill you with a sense of joy. For instance, you might enjoy doing yoga, which only requires a mat or towel and some free online videos. Or, you could opt to host a potluck with friends. Being around other people who support your new lifestyle is uplifting, and your stress levels will lower as you enjoy the distraction.

There’s no doubt that living with debt is stressful, but you do have the ability to start reclaiming your mental and financial wellbeing. Choosing to address your debt and mental health challenges head on is the only way to make progress. Putting debt management strategies in place will help you start to breathe a little easier each time you see those balances go down.

To learn more about getting debt under control pick up a copy of the book The Doctors Guide to Eliminating Debt.

Share this article:

2 thoughts on “What Does Debt Do to Your Mental Health?”

  1. Debt is more harmful and dangerous than most people realize. If you have alarm bells going off in your head and you feel a bit insecure, then I think that is a natural and healthy response. So it comes down to how you respond. If you get sick and carry on as if nothing is wrong, then it will get worse and you’ll be at even higher risk. If you acknowledge that you’re not well, take time off of work and your other priorities, and take steps to treat the problem, then you’ll be fine. The same goes for debt. Take it seriously, accept that it’s going to take some time and sacrifice to sort it out, and make a plan. Having a clear, doable plan and sticking to it has always helped me alleviate some of my stress and fear.


Leave a Comment