Common money problems, including loss of income, high debt, or poor credit, can have a terrible impact on your finances. But did you know that trouble with finances can also cause mental health problems?
These are the most common negative effects of debt on overall wellness:
- Mental health care neglect
- Relationship problems
- Social isolation
- Housing insecurity
- Limited housing options
Working to get out of debt doesn’t just improve your credit score—it’s also one of the most constructive steps you can take to improve your overall well-being.
Debt and mental health problems
The burden of high credit card debt alone can ratchet up your stress level. But for some people, this is compounded by lack of access to adequate health insurance, meaning someone experiencing depression symptoms or other problems might not get help out of concern lack of money.
Many mental health disorders can be managed with the help of a professional. But mental health professionals can be expensive. But people juggling minimum credit card payments due to unmanageable high debt are often reluctant to take on the expense of therapy or psychiatric care and forgo getting help because they’re worried about the impact on their bank accounts.
Even after the passage of the Affordable Care Act, many low-income individuals and households still lack access to health care coverage. According to a study conducted at the University of Michigan, high credit card debt levels often translate to fewer doctor visits, especially visits to mental health professionals.
Medical debt impacts mental health
Anyone who’s faced the possibility of racking up medical bills while struggling with student loan debts and a queue of creditors can tell you that worrying about money when you’re sick doesn’t help.
Of all the ways medical debt impacts people’s lives, including their credit score, the stress is probably the worst. The effects of medical debt on finances can be staggering, and if on top of all those new bills you’re out of work because you’re sick, it’s easy to feel overwhelmed.
A debt problem can become a relationship problem
One way that being in debt can make you miserable is by putting stress on your relationships.
In a study conducted in 2012, 27 percent of survey respondents said disagreements about finances were most likely to start an argument. Not even children, chores, work, or friends caused more conflict than struggles over money.
A 2012 study published in Family Relations showed that newly married couples who argued about money were more likely to split within five years than couples who argued about anything else. That includes arguments about who does the dishes, nights out with the boys (or girls), even sex.
The mental health effects of student debt
One of the most common ways that people incur long-term debt problems is through student loans. In fact, student debt is now the second biggest type of consumer debt behind home mortgages. And it might not be as easy to settle with creditors as with a mortgage or credit card debts.
Many people take on loans for college in hopes of earning a high income later. But it’s easy to be overwhelmed by high student loan debt if that income doesn’t happen right away—or at all. And the burden of student debt can make it difficult to buy a home or even get married.
Many student loan borrowers feel overwhelmed by the payments on their student loans and hopeless about their future prospects. The credit impact of carrying high student debt can make it difficult to get a loan for a new car or a home, adding to the stress.
Mental health affects physical health
We usually associate stress, especially stress around debt and money, with mental health. But there are several physical health problems associated with poor mental health, too. Mental health problems, including debt-related stress, can be a big problem for your body.
In a study conducted by Northwestern University, many subjects between the ages of 24 and 32 with high debt-to-asset ratios had dangerously high blood pressure. A 2011 study conducted by Ohio State University linked high stress levels with lower production of beneficial bacteria and higher harmful bacteria levels in the digestive tract.
Stress due to chronic debt can also literally be both a headache and a pain in the neck. A 2009 study published jointly by the Associated Press and AOL showed that 44 percent of survey respondents who reported high levels of debt-related stress also complained of migraines, muscle tension, back problems, and a higher risk of a heart attack.
Social isolation and mental health
Did you know that one of the biggest risks to your mental health is social isolation? Many factors contribute to social isolation. Money problems such as high credit card debt are one big issue that can actually cause some people to isolate themselves socially.
Have you ever said “no” to an invitation simply because you knew you didn’t have the money? Chronic debt often results in continually saying “no” when friends invite you to get together socially. Chronic debt may also prevent you from traveling to spend time with family members during the holidays.
A study published by the Public Library of Science (PLOS) showed that economic hardship could aggravate social isolation. This makes sense. Besides not having the money to travel or socialize, some people struggling with debt struggle with feelings of shame and low self-worth, which causes them to withdraw.
Social isolation can become life-threatening, leading to thoughts of suicide and an increased risk of self-harm. Anyone experiencing such serious mental health problems should get help from a professional right away.
The stress of housing insecurity
For many people, the biggest source of debt is a mortgage. Falling behind on mortgage payments places homeowners at risk for foreclosure and ultimately losing their homes. Chronic debt affects renters when they struggle to maintain on-time rent payments, putting them at risk for eviction.
Housing insecurity has a major impact on mental health, and it can cost even more money, such as in moving expenses, which can mean racking up even more debt. A 2015 study by the CDC showed that people experiencing housing insecurity typically experience poor mental health for about 14 out of 30 days.
Limited housing options affect mental health
Having a lot of debt compared to your income can have poor effects on your credit score. This, in turn, can make it difficult to get a mortgage or lease for suitable housing. The effects of unpleasant living conditions can be a big problem for someone having trouble managing money.
Even without suffering foreclosure or eviction, chronic debt can force you to settle for inferior living conditions. You may be cramped into a tiny apartment with no privacy for anyone, trapped in an unsafe neighborhood, or simply stranded in an isolated area with few or no basic amenities.
Not being able to afford a home close to where you work increases your commute time, leading to more stress and less time for self-care. In the long term, this can really eat away at your overall wellness, leading to anxiety or depression.
Getting out of debt is possible for patience and diligence
If you are deeply in debt, you may despair that you will never be financially solvent again. Getting back on your feet may not be the easiest thing to do. It takes not just money but time. After all, chances are that you didn’t get into debt overnight, so you can expect getting out of it will take some time, too.
It’s true that unless you win the lottery or discover a rich relative, getting out of debt won’t happen overnight. But with financial discipline, diligent effort, support from family and friends, and perhaps guidance from financial professionals, you can erase the burden of debt.
Use your credit report as a tool
The first step is to evaluate your situation. Many people facing overwhelming debt aren’t even aware of all their total debt. One quick way to get a breakdown of your current debt is from your credit report.
A quick and easy way to find out how much money you owe and to who is to get a copy of your free credit report. Every American is entitled to one free copy of their credit report from each of the three major bureaus once per year. Once you receive your credit report, you can look through it to better understand where you stand financially.
Use a budget to help you get out of debt
The next step to getting out of debt is a monthly budget to help you manage money. There are many tools you can find that will help you evaluate which type of budget is best for you. Creating and sticking to a monthly budget will help you with your financial goals and keep your spending more under control.
Financial professionals can help, too. Whether it is a financial advisor you are seeking or perhaps a debt consolidation loan, there are multitudes of people and businesses out there whose sole purpose is to help people manage money and get out of debt.
Just think of all the benefits there are to being financially secure. Your pocketbook – and your mental health – will be all the better.
Audrey Henderson is a Chicagoland-based writer and researcher. She holds advanced degrees in sociology and law from Northwestern University. Her writing specialties are sustainable development in the built environment, policy related to arts and popular culture, socially and ecologically responsible travel, civic tech and personal finance.