How Does Debt Affect Your Mental Health?

In the United States, the average student loan borrower carries over $48,000 worth of student loan debt and the average household carries more than $15,000 worth of credit card debt. It’s safe to assume the average consumer struggles with debt-induced anxiety. That anxiety can take a toll, not only on your financial health, but also on your mental health.

“First of all, the stress of being in debt and having to pay it back can be so pervasive,” says Melanie Lockert, founder and author Dear Debt. “When I was paying off my student loans, I felt like I was constantly in a low-grade stress level because I knew my money was never truly mine.”

It’s easy to overlook this stress and simply chalk it up to typical money worries. However, that stress becomes absolutely overwhelming for many consumers.

The Link Between Debt and Depression

“Depending on the level of debt and the capability that the individual or family may have to resolve the issue, the impact on mental health can be shorter-term or can carry on for years,” says Megan Ford, M.S., LMFT. Ford is a practicing financial therapist at the University of Georgia and the current President of the Financial Therapy Association.

Ford says that financial concerns often lead to stress, anxiety, and depression. Research backs this up. A 2012 study published in the European Journal of Public Health found a link between debt and mental health disorders. The study explained:

“Adults in debt were three times more likely than those not in debt to have CMD [common mental disorders]. The increased likelihood of CMD among those in arrears was found for all CMD and was irrespective of source of debt—housing, utilities and purchases on credit. The situation was exacerbated among those with addictive behaviours—alcohol or drug dependence or problem gambling.”

The findings were enough for the study to conclude that debt is “one of the major risk factors for CMD.”

Another study from Northwestern University found that consumers with higher levels of debt had a 13.3% increase in depressive symptoms and a 11.7% increase in perceived stress. In general, for every 10 percent increase in personal debt, the study concluded that depression symptoms worsened by 14 percent.

“There can be so much shame and guilt associated with debt,” Lockert says. “You feel bad for getting into debt, frustrated trying to get out of debt and it can feel like you have no one to talk to about it.”

After attending a prestigious private school, Lockert says she was unable to find a job afterward. This led to a rush of symptoms similar to those experienced in the study. “I felt so ashamed at how much debt I got into for a pretty useless degree. I felt consumed by my debt and it affected my mental health in a big way. I suffered from anxiety and depression and also feelings of worthlessness. Having so much debt and not having a way to pay it back right away was tough.”

The Effect of Debt on Physical Health

It’s not just mental health, either. As Ford explains, mental and physical health often overlap. Northwestern’s research also found that participants with higher levels of debt had a 1.3 point increase in diastolic blood pressure. They called this increase “clinically significant.”

“A two-point increase in diastolic blood pressure, for example, is associated with a 17 percent higher risk of hypertension and a 15 percent higher risk of stroke….’You wouldn’t necessarily expect to see associations between debt and physical health in people who are so young,” [Lead author Elizabeth] Sweet said. ‘We need to be aware of this association and understand it better. Our study is just a first peek at how debt may impact physical health.’”

Ford added that we often neglect our physical health when we’re stressed, too. With so many financial problems on your plate, it can be hard to find the time for self-care.

“Additionally, if you are in a heap of debt, you may feel less inclined to further accumulate debt through pursuing medical appointments or regular check-ups, if they are going to cost you significantly,” she adds. “If you’re not taking care of yourself, on top of feeling a large amount of stress, it’s definitely likely that debt is affecting your physical health – perhaps in more ways than one.”

How to Cope

The good news is, there are an increasing number of resources available for consumers dealing with the mental health effects of debt. Of course, credit counseling offers financial relief, as counselors can assess your situation and come up with a plan. A financial plan goes a long way toward easing some of the burden.

To address the emotional impact, Ford suggests some sort of financial therapy.

“If someone is seeing signs of depression or severe stress related to their debt or money situation, it’s an indication that you may need some help to deal with it – whether that means taking steps to resolve the financial matter, or finding new ways to cope more effectively with this stress, or most ideally both.”

During her depression, Lockert says she turned to low-cost counseling from a local graduate school.

“I recommend people who are really struggling to get help from their church, community center or local graduate school,” she suggests. “They may be able to offer help with flexible payments. I paid $5 per session, a rate which I negotiated with them after letting them know I was on food stamps.”

She made financial changes, too, which included cutting her budget and looking for creative side gigs to earn more money. These jobs, she says, went a long way toward restoring her confidence. Still, the biggest confidence boost was a shift in mindset. Lockert says learning to separate her debt from her identity was crucial.

“Your net worth is not your self-worth. Understand that you are not an inherently bad person because you are in debt. Accept the mistakes you may have made to get into debt — or whatever situation caused your debt (for example, medical debt is no fault of our own) and work to be proactive, not reactive.”

It can also help to understand that your debt is temporary. It’s natural to feel completely overwhelmed and paralyzed by the money you owe, but small steps help you regain control.

“It’s like healing from a bad break up,” Lockert explains. “You take one day at a time and keep moving forward.”

Kristin Wong writes and makes videos about all things money. You can find her writing at Lifehacker,, and on her own personal finance blog, Brokepedia.

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