Can Debt Have Emotional Effects?Jan 25, 2021
Over time, debt can have a serious impact on your financial health, but debt also has very real emotional effects. Have you ever opened a monthly bill or credit card statement and heard yourself sigh, or felt your shoulders rise up? Have you had that feeling in the pit of your stomach when you’re faced with another unexpected cost? Maybe you’ve had trouble falling asleep at night thinking about upcoming expenses. If so, you aren’t alone. The stress of ongoing financial obligations is real, and the anxiety brought on by mounting debt can be even greater.
How can debt have emotional effects?
Struggling to pay your bills or keep up with growing debt can lead to a whole host of mental health issues including depression, anxiety, panic attacks and hopelessness. Research also shows a correlation between debt and suicide, depression and anxiety. Some types of debt, like payday loans, can quickly spiral out of your control, and that sense of being trapped or overwhelmed by debt can make you feel anxious and hopeless.
Ongoing money worries or debt stress takes a toll. Even in a “normal” year, increasing costs and changing life circumstances can throw your finances for a loop, and in turn, affect your emotional health. Millions of Canadians are feeling a higher level of financial and personal stress because of COVID-19.
4 ways you might feel the emotional impacts of debt
1. Fear and uncertainty
As the effects of the pandemic continue into 2021, the uncertainty and fear that people are feeling about the economy and their own financial security continues as well. The resulting stress can cause your body to be in a perpetual “fight-or-flight” mode. Cortisol levels can rise over time, causing physical and emotional effects like elevated blood pressure, sleep disorders, digestive problems, headaches and irritability. The fear around money problems, like too much debt, can lead to other emotional health problems, like anxiety and depression. The sense of helplessness or hopelessness can be a serious driver of emotional illness.
Falling behind on bill payments and struggling to get out of debt can obviously be a major source of anxiety, and the effects are often cumulative. As time goes on, if the problems aren’t resolved, the anxiety may lead to panic attacks, breathing or heart issues, problems sleeping and an inability to focus.
Some days, it might even be hard to get out of bed, and when you do, it can be tough to muster the energy you need to go about your daily life or work. Your irritability or inability to engage with others may also increase, and the people around you like family, friends, or co-workers could all take notice. It becomes increasingly difficult to focus on your partner, your kids, or your work when your debt is unresolved or increasing.
4. Avoidance and denial
Even the idea of future debt can trigger stress and anxiety. When you don’t know what’s ahead and you don’t have a financial plan in place, the stress can consume you. That can lead to an inability to act at all, like a deer in headlights. Avoidance and denial might feel right in the moment, but the reality of your financial situation or your fears about the future will soon creep back in. Late payments, unopened bills, collection calls and accessing new credit to pay off existing debt are just a few of the warning signs of financial problems. Unfortunately, when it comes to debt, avoidance and denial will inevitably make your debt problems more serious and more stressful.
Getting out of debt can improve your emotional health
Getting out of debt may seem impossible at first glance, but it isn’t. That’s why a lot of people avoid talking about debt or taking steps to pay off their debt. But those first steps are important, for your financial health and your emotional well-being.
Everyone’s financial situation and lifestyle is different. You may have the ability to bring in additional income, reduce expenses or adjust your budget. Or you may need to find a solution to help you resolve your debt, such as a debt repayment strategy or debt relief option. If COVID-19 has resulted in financial struggles like reduced income and growing debt, having a plan in place to deal with pandemic debt challenges can definitely help reduce any stress or anxiety you’re feeling.
Has your debt become unmanageable? The best thing you can do for your overall well-being is schedule a one-on-one meeting with a debt professional. Your first meeting with a Licensed Insolvency Trustee (LIT) is free, confidential and without obligation. An LIT will sit down with you, listen to your story and review your financial situation.
Often, simply knowing that there’s a solution for your debt can be a real source of stress relief. Your solution may be as straightforward as reworking your budget or tweaking your credit management strategy. Or you may need a more formal debt management plan like a debt consolidation loan, consumer proposal or bankruptcy. If money worries are affecting your emotional well-being, take steps now to eliminate debt. Make 2021 the year you reduce debt and improve your health.
If you or someone you know is in crisis, please reach out to Crisis Services Canada, online, the Suicide Prevention Hotline, at 1-833-456-4566 (24/7/365), or text 45645 (4pm-midnight ET). You are not alone.