Home » Health » What Are the Emotional Effects of Debt on Your Well-Being?

What Are the Emotional Effects of Debt on Your Well-Being?

An unhappy man and woman sitting on a bench

Yes, any debt can be harmful to your emotions, whether it is a good debt or bad debt. Research shows having debt is much more pathetic than a monetary loss. Being in debt can trigger a series of emotional and psychological issues that a person can’t explain all the time.

As per the Mayo Clinic, emotional and psychological issues can create serious problems like:

  • Headaches, weight gain, digestive issues, and other physical problems
  • Insomnia or sleeping too much
  • Alcohol or substance abuse
  • Nervousness and panic disorders
  • Conflicts at work and home

As per the reports of CreditCards.com, the average American individual has $15,950 in credit card debt, and 39% of US citizens carry credit card debt from one month to another.

An average college student is carrying $40,000 in student loans, and students who opted for higher studies may owe significantly more debt. As per a Federal Reserve Board survey, 1 in 5 students owes $50,000 or more in student loans.

If you gather all the debts together, starting from the mortgages, car loans, medical bills, phone bills, personal loans, and other monetary obligations, and you’ll get one damn clear picture…and that is Americans have debts beyond their affordability.

Debt may affect different people in different ways. There is no such common tolerance of debt that can be explained. It is a fact that carrying a $1,000 credit card debt is much more stressful for a common man like you than the American business magnate Bill gates!

That wasn’t particularly surprising. Simply thinking all the time about your huge debt burden and financial insecurity is enough to trigger mental health issues. People feel twice as much mental and physical pain when they are falling behind and go through a financially unstable time. Falling into debt and unable to make payments increases these emotional feelings.

No matter what type of debts you have, these common psychological and emotional issues associated with debt may break you into pieces:


1. Stress

If you’re worried about your unpaid debts, money, bills, you’ll naturally start feeling stressed. Too much stress can create problems in your health, work and personal life. The more your debt increases, the more stressed and anxious you’ll become. You’ll feel a bit hopeless during this situation and may start doubting that you can get out of debt.

Having substantial debt can also increase your stress level at work since a job loss would be even more catastrophic to your financial position.


2. Depression and Anxiety

Consumers who face difficulties paying off their debts normally experience mental health problems, including depression and severe anxiety, twice as much as a normal individual experience.

This theory is established by Dr. John Gathergood of the University of Nottingham. His study also revealed that 29% of people with high debt stress report severe anxiety.

The Royal College of Psychiatrists found that men and women with higher risk credit behavior were more likely to report depression and anxiety symptoms.

To handle this emotion, you need to improve your finances and reduce debts.

So, try to follow these steps:

  • Stay positive
  • Reduce expenses
  • Set a payoff goal date
  • Increase monthly payments to creditors


3. Denial

Let’s think about a situation where you might be using your credit card a lot and making only the minimum payment per month. Month after month, you are ignoring the increasing balance and still making new purchases. Your family members might have told you about this situation but it doesn’t work out. You are simply avoiding the situation despite knowing it clearly. That is denial.

Denial is a defense mechanism people use so they don’t have to accept the mistakes they’ve made. Unfortunately, even if you’re able to ignore your debt completely, it will only provide temporary relief. Meanwhile, it often leads to more and more debt piling up.

This emotion reserves your ego, but it doesn’t fix the issue whereas it encourages additional debt.


Signs of denial may include:

  • Ignoring bills
  • Underestimating your debts
  • Comparing yourself with others
  • Living with a happy-go-lucky attitude
  • Devoting towards impulse buying using a credit card, etc.


4. Loneliness and fear

When you are in debt and having a financial crunch, people close to you might start avoiding your presence. Your friends and family might feel uncomfortable around you as they might think you are going to ask for money.

They also think they’ll never get back that money from you as you are already in financial jeopardy. Gradually, you might feel lonely in spite of being a social creature.

Similarly, debt can scare you like nothing else. If you have huge credit card debt, most likely you’re afraid. It is because you might be worried to answer any abusive creditor call.

You might also afraid to check your mailbox in case you find another warning notice from your lender.

You may even be afraid to go out as if one of your payday lenders might be stalking you. Frightening..isn’t it?

If you want to get out of this situation and pay off your debts completely, you may need to:

  1. Create a Budget
  2. Make extra money
  3. Stop using further credit cards


5. Resentment

Debts can break any of your relationships – especially your marriage, partnership, or family. A spouse or partner may blame the other for getting into debt, losing a decent job, spending too much, or not earning enough.

Money related arguments may often lead to divorce, so a large amount of debt will definitely have severe effects on your household’s well-being. Not only at your house, but you might also resent your employer for not paying you enough money or not giving you a raise.


6. Regret

When you see a pile of credit card bills and notice the total debt amount, you might surely regret the shopping you’ve made during the last month or other poor financial decisions.

Studies have revealed that students with higher credit card debt levels tend to experience devastating mental health episodes for piling up so much debt.



Many of us have a huge credit card debt burden and feel embarrassed about our financial situation. You might be one of us too. Sometimes you might feel so ashamed of yourself that you avoid meeting people, even your family.

At work, you might suffer from an inferiority complex and always compare how bad your life is compared with your colleagues.

If you want to get rid of this situation, try to consolidate credit card debt and stop being shameful about your debts. Talk to family openly, it’s quite better than living isolated in the dark pit of debt.


Freedom and accomplishment

Yes, debts have some positive emotional effects too. But it can be achieved only if you can pay them off. The Simple Dollar owner Trent Hamm explained – “Debt freedom isn’t just freedom from debt. It’s freedom from worry.” 

So, try as many debt relief options as possible to wipe out all your debts. Choose a balance transfer method and gradually pay off your credit cards. Take out a debt consolidation loan and pay off all the high-interest payday loans, medical bills, or credit card debts.

Once you pay off all the debt balances, the joy of accomplishing this hurdle and the essence of freedom will be overwhelming.


Final words

It might require 2 or 10 long years to beat your debt. Till that time you may experience a few loud emotions along the way. As your balances shrink every month, you’ll feel relieved and become satisfied. You’ll be confident that you’re on the right path.


Author Bio:

Aiden White is a financial writer who lives in Foster City, California. She started her financial journey in 2015 and has been associated with consolidatecreditcard.org for the last 10 months. Through her writing, she has inspired people to overcome their credit card debt problems and solving their personal finance based queries. Being a debt fighter in her personal life, her goal is to share innovative thoughts and knowledge in the debt communities. Get in touch with her at aidenwhitejoe@Gmail.com.

Leave a Reply

Scroll to Top
%d bloggers like this: