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How Debt Affects Mental Health & What You Can Do

Debt and Your Mental Health

Dealing with debt is very stressful. Bills keep coming in, you have to constantly come up with strategies for how to pay them, and it often feels like you can never quite escape it. It’s incredibly mentally exhausting. Calls from creditors and collection agencies can drastically increase the anxiety.

Having debt is a significant stressor. Not knowing how you’re going to pay your bills and afford your expenses makes it difficult to enjoy the rest of your life. When you’re focused on bills and debt, it’s hard to enjoy yourself or to find any time to unwind. This can be quite detrimental to your mental health.

Debt can lead to depression and anxiety, as well as feelings of resentment, denial, anger, frustration, and more. People who struggle with debt often have difficulty sleeping well at night, eating a healthy diet, finding the time and energy to exercise, or socializing with friends and family. These factors make you feel even worse, as they lower your energy levels and negatively affect your mood.

However, in many cases, improving your financial situation can help improve your mental well-being as well. While debt can often seem overwhelming, there are things you can do to resolve your debt issues and improve your financial situation. Here are some tips.

Organize Your Finances

One of the most difficult parts of dealing with debt is that bills quickly become overwhelming. You can help prevent this situation by organizing your finances. Gather all of your bills and relevant paperwork together. Figure out where you owe money, how much you owe, when each bill is due, and more. This will give you a full financial picture.

It’s understandable that your first instinct may be to “hide” from your debt, but that doesn’t help resolve the issue and it won’t improve your situation. Understanding your debt will make it possible for you to create a plan and that plan will help you deal with your debt and your stress.

Create a Plan

Once you understand your debt, you’ll be in a position to create a plan for dealing with it. The first step is to note all the due dates for your bills. It’s important not to miss any payments if at all possible. Not only does missing payments hurt your credit rating, but most creditors charge penalties for late or missed payments. You don’t want to end up paying additional charges if you can avoid it. Plus, if you don’t miss payments, creditors won’t send collection agents after you. No one wants to deal with collection agencies.

Once you know when all your bills are due and you’ve noted them (on a paper or digital calendar, as reminders in your phone, etc.), then it’s time to create a plan to pay your debts on time. Put a category into your budget for “debt repayment” and make sure you “pay” into this category each month. Try to cut your expenses as much as possible so you have money available to pay your debts.

Having a plan won’t just help you reduce your debts, but it will also help you feel in control of your financial situation. This will go a long way to easing your stress and anxiety.

Set Goals and Reward Yourself

Give yourself realistic goals. For example, tell yourself that you want to pay more than the minimum balance on your credit cards. If you successfully do this for three months, you’ve achieved a goal. You can then give yourself a small reward (such as a special drink at your favourite coffee shop or something similar). This can keep you feeling motivated and upbeat.

Getting Help

Sometimes, dealing with financial issues requires help. Consider talking to friends, family, or financial professionals for guidance. For instance, a Licensed Insolvency Trustee can help you understand the options that are available to you so you can deal with your debt.

While debt and mental health issues often go together, they may not cause one another. In some cases, once the debt has been repaid, a person feels great relief and a sense of accomplishment that improves their mood. However, if you’re experiencing issues such as depression or anxiety, getting mental health support from a qualified professional may be a good idea. Therapists and medical professionals can help.