Debt Is Not Good for Your Mental Health

There are lots of ways that debt makes your life harder. Debt eats at your weekly budget and makes it a challenge to save up for milestones like buying a house or retiring from your job. It hurts your credit score and encourages lenders to offer you high-interest loans, keeping you in the vicious cycle of repayments. It can be a source of tension in your relationships. It can be a distraction throughout your workday and an anxiety that keeps you from sleeping through the night.

One thing that’s rarely acknowledged when talking about the side-effects of debt is how it impacts your mental health.

How Does Debt Affect Your Mental Health?

Financial Stress

Finances are a major source of stress for the average person. They need to bring in enough income to pay their bills and afford daily essentials like food. If they were to lose that income and savings, they would be in a very difficult situation. They could miss their bill payments and rack up penalties. They could have their utilities shut off. They could get evicted or lose their home. The stakes are incredibly high.

Debt only exacerbates financial stress from everyday expenses. If someone can’t afford to make enough repayments, that burden only grows and increases in importance. Then, they have to deal with late fees, collection calls and promises of legal pursuit.

It’s no wonder that debt often coincides with mental illness. Researchers have found that adults dealing with heavy debt loads and the threat of debt collection firms such as Darrell Cook & Associates often suffer from high levels of stress, anxiety, depression, and even suicidal ideation.

Losing Sleep

Personal finances have a direct link with sleep problems. Researchers have found that financially stressed people have poor sleep quality — this means that they have trouble getting to sleep, and they do not feel rested in the morning. On the other hand, people with more financial stability are more likely to be sound sleepers.

Sleep deprivation inevitably leads to poor mental and physical health. After a single night of improper sleep, a person can experience symptoms like irritability, mood swings, forgetfulness, impaired judgment, and depression symptoms. It’s no surprise that people that suffer from chronic insomnia are often diagnosed with depression.


Debt is a common problem, but it still carries a social stigma. The average person will not want to admit that they have financial trouble and need help to reach stability. Many people will keep any information about their debts a secret from their closest friends and family members, some going as far as to hide this crucial information from their romantic partners.

The stigma does more than make debtors carry around shame and fear throughout their daily life. It forces them to lie to the people that they care about the most. This could corrode the trust in their relationships and leave them without support systems to lean on.

How Can You Fix the Problem?

As you can see, debt negatively impacts your mental well-being through stress, sleeplessness and social stigma. And what’s worse is that mental illness often makes it more challenging to make responsible financial decisions, leading to impulsive spending, missed deadlines and larger amounts of debt. It pushes you into a vicious cycle that can feel impossible to escape.

So, how can someone break the cycle and get out?

Seek Help for Your Finances

One of the best strategies for dealing with financial stress is to go to a professional for help. They can give you expert financial advice and guide you toward a steady and stable future. If you’re living with debt, go to a licensed insolvency trustee firm. A local firm like David Sklar & Associates offers beneficial services like credit counselling, which teaches crucial financial lessons like how to responsibly use credit and how to properly manage your debt. These lessons are designed to improve your financial literacy for the rest of your life.

If you don’t think you can repay your debts, a licensed insolvency trustee might suggest that you file for a consumer proposal. A consumer proposal can lower your debt among multiple creditors, making repayment more manageable. Using this debt-relief strategy, you could clear a heavy burden from your shoulders within 5 years (the maximum time of a proposal).

Taking control of your finances can give you a lot of relief from stress, but it’s not the only action you should take.

Seek Help for Your Mental Health Issues

Resolving your debt isn’t a complete solution if you still have mental health issues. Ignoring that element of the problem could send you right back into financial trouble. You can’t keep repeating the pattern. Seek out a mental health professional to discuss your symptoms and feelings to determine what kind of intervention is best for you. There are plenty of options out there, from one-on-one counselling to art therapy to prescription medications.

The issue with seeking out mental health therapies is that they can be expensive. See if your workplace benefits cover this type of treatment. Full or partial coverage could suddenly turn an out-of-reach practice into an accessible one. If you don’t have coverage, you don’t have to give up on your search because there are plenty of affordable online therapy options available. As long as you have internet access, you can at least talk to a therapist or trained volunteer about your concerns.

Another way that you can enhance your well-being is to combat the social stigma associated with debt. Break the silence. Talk to your loved ones about your money troubles and how they affect your mental health. They can offer you support and comfort. If you need motivation to take on more responsible financial habits, they can be your greatest advocates.

The discussion with your friends, family members and romantic partner can be difficult, but it can be cathartic, too. The burden of a terrible secret will be lifted from your shoulders once the conversation is over.

It’s clear that debt is more than harmful to your bank account. It’s bad for your mental health and well-being, too. Learning this information should motivate you to get professional help as soon as possible so that the symptoms of both problems don’t get worse.

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