How debt affects mental health

Live Well Diary Team

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debt affects your mental health

Debt affects mental health, peace of mind and quality of life—a connection between debt and mental well-being.

This article reveals how debt can infiltrate minds, leading to feelings of stress, worry, and even depression.

Overview of how debt affects mental health

Debt impacts self-perception, perspective on life and future outlook.

It can be hard to think about anything else when one is in debt. One may find oneself constantly concerned about managing one’s finances or the potential consequences if one needs to catch up on payments. When preoccupied with matters, there will be thoughts that will always revisit those familiar inquiries: “How will I cover the costs?”, “What led to this situation?”

Feeling inadequate or not meeting obligations is common when in debt. This may lead to feelings of worry, sadness, and a sense of lacking hope.

Feeling ashamed of being in debt can make it more challenging to overcome the situation.

Anxiety and stress

Let’s talk about something real—stress and anxiety. It’s like carrying a backpack full of worries when we’re in debt. Every bill that comes in feels like a punch to the gut. We lie awake at night, our minds racing about scraping together enough money to cover it all. It’s exhausting.

Debt digs its claws into our emotional well-being, too. There’s little room left for joy or peace when every amount is accounted for. We’re constantly teetering on the edge, afraid of what might happen if we slip up even once.

It’s not surprising that debt and stress often come together. When every day feels like a battle, finding any semblance of calm is hard; recognising it is the first step to tackling it.

Here are strategies to combat anxiety and stress when dealing with debt:

Face it head-on: Ignoring debt only fuels anxiety. Start by facing your financial situation squarely. Gather all bills and statements to understand clearly what is owed.

Create a budget: This helps in managing finances. List expenses, then focus on paying off debts with any leftover money.

Communicate with creditors: One shouldn’t suffer in silence. Contact creditors to discuss payment options. Many will negotiate lower monthly payments or interest rates to help manage debt.

Seek support: You’re not alone in this. Share struggles with trusted friends or family members. Sometimes, talking can provide immense relief.

Practice mindfulness: For stress, try integrating mindfulness. Mindfulness can also ease anxiety. Examples include practising meditation, engaging in breathing exercises, or staying present at the moment.

Break it down: Look for ways to break or manage the debt into smaller, more manageable chunks. Create a milestone and celebrate when it is reached.

Explore financial assistance programs: Investigate resources such as debt counselling services or government assistance programs. These can provide valuable guidance and support.

Focus on what can be controlled: Getting rid of debt overnight is sort of impossible. Do concentrate on managing the controllable parts of the finances. Make efforts to cut down on expenses and boost earnings.

Practice self-care: Participate in activities that bring happiness and calm, like enjoying nature, working out indoors, or pursuing a hobby.

Celebrate progress: Appreciate and rejoice in advancements, no matter how minor. Each payment and budget effectively managed brings you closer to achieving financial independence. Recognise the work already completed and treat yourself with kindness throughout the journey.

Debt can be a source of conflict in relationships.

Discussing money can often be a difficult subject to broach.

Being in debt can leave us feeling exposed, particularly when we lack funds to meet our expenses or are heavily indebted.

You could feel hesitant to discuss issues out of concern. Or you might worry about the implications of a divorce, like how your debts would be handled.

Ignoring will only make things escalate further. Your significant other may struggle to support you during these times if they are not fully aware of the situation. So open up.

debt affects your mental health relationships

Debt can disrupt your sleep.

If you’re in debt, you might be no stranger to nights spent tossing and turning. Having difficulty falling asleep due to worries is an issue. It’s possible to experience insomnia and be awake in the middle of the night, consumed by concerns about finances. And in some instances, waking up in a state of panic after dreaming about money and debt can be unsettling.

If you find yourself preoccupied with concerns, the urge to dismiss them from your thoughts may arise. However, research indicates that attempting to avoid pondering an issue or financial obligation can actually increase the likelihood of it occupying one’s mind.

Give yourself permission to think about the financial concerns—just try not to stress over what seems like an unsolvable problem.

debt affects your mental health bills

Be prepared when dealing with debt.

If you’re struggling with your debts, your loans or credit card bills, consider the following:

  • Speak with an advisor or counsellor. They can assist in comprehending the multitude of choices and figuring out the course of action based on circumstances.
  • Prepare yourself for any scenarios. In case things deviate from the plan and resolving debt without actions such as filing for bankruptcy or forfeiting assets (such as a residence) becomes unavoidable, it’s crucial to be aware of those. This way, if such situations arise, it won’t come as a surprise.
  • Talk to friends and family. If people are aware of the challenges, they might offer guidance. Even consider providing financial assistance if they are in a position to do so.
  • Seek professional advice from a debt management agency or debt relief agency. These companies focus on assisting individuals in overcoming challenges by negotiating payments with lenders, making a debt management plan and lowering interest rates to make repayments easier to handle over time, thus reducing the likelihood of additional stress.


Whether you have debt or not, everyone must carefully consider their approach towards money and their commitments. Do not wait until your debt affects mental health so much that recovering from them is challenging.

Debt is unavoidable and is bound to happen at some point in your life.

If struggling with the burden of debts, it’s crucial to address the situation.

If you suspect debt is affecting your mental health, seek help now.

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