In many ways, it can feel like debt is an unavoidable part of life. The average American holds $104,215 in debt across mortgages, credit cards, car loans and student loans. But, just because debt is so “common,” doesn’t mean it’s easy. The mental toll of owing a lot of money to lenders is undeniable. If you feel burdened by your debt, know you’re not alone. Keep reading to learn more about the impact of debt on mental health and tips on how to cope.
Americans and Debt
Many Americans hold debt, and it’s not always a bad thing. For example, a mortgage is typically seen as a necessity for achieving the American dream of owning your home someday. So, it’s unsurprising that the largest percentage of the average person’s debt balance is a mortgage. Many financial experts consider this a “good debt” that helps you work towards a more stable financial future.
However, other types of consumer debt, such as car loans and credit card balances, are often seen in a negative light. These debts are often viewed as avoidable and as something that can harm you financially and mentally.
How Debt Impacts Mental Health
Debt isn’t just about the money. Here are some of the many ways debt can have a psychological impact on a person:
1. Additional Stress
Owing money is stressful. One study found that 54% of Americans with debt report feeling always or often feel stressed due to their debt.
You know that you’re paying interest and fees you can’t afford and that your financial situation isn’t currently stable. Unfortunately, stress impacts your mental health, making you more irritable, causing problems with concentration, and even leading to physical health issues as well.
2. Sleep Issues
An adequate night’s sleep is important for your overall mental and physical health. But, when you have money troubles racing through your thoughts, you may find it hard to get a good night’s sleep.
3. Relationship Problems
Money can be a big stressor for relationships. When someone is in debt, it might cause difficulties in the relationship for many reasons, such as:
- The need to constantly lie and hide the financial issues from the other partner
- Feelings of resentment around your partner not having money problems, earning more than you, or being the reason for the debt
- Constant feelings of strain as one or both of you struggle to afford necessities
4. Increased Risk of Mental Health Problems
Debt has been correlated with an increased risk of mental health problems, including anxiety, depression, and isolation. Respondents in a study on debt-related stress reported these issues, with 40% saying they have higher anxiety, 38% saying they’re less social, and 34% experiencing depression.
Tips for Improving Your Relationship With Money
The good news is that debt isn’t forever. Whether you owe $1,000 or $100,000, you can address your debt and take steps so it stops impacting your mental health. Here are some tips that can help you get back on the right track:
1. Acknowledge Change is Needed
The first tip is to ensure you’re no longer in denial of your situation. You need to acknowledge that you’re having financial difficulties, and it’s negatively impacting your mental health.
You must also accept that you need to make some changes to prevent further deterioration.
Some people feel stressed and upset about their debt and feel that a solution is impossible, so they continue to spiral into further debt. You may feel hopeless, but just know there’s always a way out of debt. You have to start by wanting to change your situation.
2. Learn Positive Financial Habits
Next, consider investing the time to learn healthy financial habits. Sure, you can climb your way out of debt, but if you don’t learn how to be fiscally responsible, you might find yourself in the same situation all over again.
Consider educating yourself with books, videos, blogs, and podcasts about personal finance. Specifically, you’ll want to learn more about:
- Budgeting
- Saving
- Retirement planning
- Interest rates
- Loans and credit cards
- Credit scores
- Credit reports
3. Talk to Someone
Hiding secrets, especially about money and debt, can cause you even more stress. Remember that you’re not alone, and the average American carries debt! Talking to your close friends and family about your situation can significantly help. Not only can they offer practical advice, but they can also be a support system on which you can lean. You’ll be surprised by the wonders it does for your mental wellness just to get the secret of your debt out!
4. Take Back Control
When you feel like you have control over your finances, you’ll see an improvement in your mental health. After all, you might not get out of debt immediately, but you’ll know you’re working to fix the problem.
Make a debt payoff plan and stick to it. A debt payoff plan should be realistic and allow you to have an end date to look forward to.
Unsure of where to start? There are many resources out there that can help, including debt counselors and debt consolidation companies.
A Stable Financial Future is Good For Your Mental Health
Healthy finances can help you feel more secure and confident, which will work wonders for your mental health. It all starts with refusing to allow your debt to control you any longer. You can make a change, and it can start today.
You might also be interested in: The Implications of Mortgage Debt on Your Finances
