Money Matters: Connecting the Dots Between Debt and Depression

When your corporate mission is to move people beyond debt and transform their lives, you must hear stories about how financial struggles affect someone’s mental health. 

Our agents are empathic and offer warm conversation to provide a customized debt consolidation solution. In the process, clients share stories that range from sad to troubling to heartbreaking experiences. 

At Beyond Finance, we are proud to have served over 300,000 clients and paid off $1 billion in debt. Those stories are in the past. And their future is now in sight. 

Debt can impair a bank account or stop the progress of an entire household. Financial struggles have various implications for personal relationships. If debt has that lasting impact, those struggles could erode someone’s self-worth, confidence and emotional wellness. 

There is nothing novel about struggling with debt or the discovery of how it can create serious mental health issues. According to the American Psychological Association, 72% of Americans feel stressed about money each month. On a more alarming note, 22% of people report feeling extreme financial stress every month.

As we have shared, Acute Financial Stress is a real thing that can lead to true depression and damage to emotional wellness. Debt.org shares how current economic numbers skyrocketed and most likely took emotions (and blood pressure) with them. 

• Grocery prices were up 5.8% in 2023, slated to rise another 2.9 in 2024. The average family of four spends $700-$1,000 extra each month, based on pre-pandemic prices
• As of October 2023, housing prices were up 4.7% annually, with a median home price of $412,000.
• Medical care hasn’t fared well either, costing the average family of four $31,000.
• As of August 2023, even car insurance increased 11% in the U.S. 

How Debt and Depression Connect

Our financial experts have discussed the many feelings related to economic issues and emotional stress. The guilt of missing payments and fear of getting behind on bills can lead to shame and overwhelming anxiety after a prolonged time dealing with collections, emptiness and, eventually, depression. 

The Money and Mental Health Policy Institute believes an intrinsic cycle affects people globally. They cite that people with depression and problem debt are 4.2 times more likely to still have depression 18 months later than people without financial difficulty. The genesis of that cycle begins with the money but ends with an emotional struggle that can lead to several mental health problems. 

One of our client financial therapists, Nathan Astle, CFT-I, wrote in Psychology Today an idea that validates this cycle–a mental health connection that underscores why debt and depression are connected. 

“Money is not just about numbers; it’s about the emotions attached to it. Recognizing and managing these emotions is key to achieving financial well-being. By incorporating emotional evidence into financial action and decision-making, we can navigate uncertainties with greater confidence and clarity.”

Disconnecting the Financial Effects of Emotional Struggles 

Experian reports that the average American has a little over $96,000 in debt, including credit card debt, automobile loans and mortgages. That debt causes 60% of Americans to feel anxious about their finances, and 63% don’t expect their economic situation to improve. 

As we all navigate through the debris increased debt causes, it’s crucial to our mental and physical health to learn ways to manage our debt better and reduce financial stress. Remember those stories we hear? Despite the origin of any financial problem, it’s essential to know that it doesn’t matter. What happened is done. It’s time to get support and break that cycle. 

How you do that requires some work. 

Learn what you can pay.

Listing your expenses is essential in determining what you can afford to pay for your monthly debt. Put your monthly payments in one category, entertainment in another, and whatever else needs to be separated to help you understand your financial landscape. 

Be practical about what you can do.

Financial obstacles come in many forms, such as large loans, student expenses and credit cards, but debt and depression do not have to stay connected if you have realistic goals.

Allot certain amounts to specific bills, sums you can afford each month without putting additional burdens on yourself. 

Rediscover your self-worth.

Debt is something you have; it’s not what you are. Those bills and phone calls determine the problems happening to you, but only your identity determines the person you’ve become. The next time you miss a payment, give yourself some grace. Try working with the credit card companies directly and gain some confidence instead. 

Search for assistance.

Look at your situation as you make your lists and determine your plans. Do you need help? Consider the person in the mirror before you inspect those things in the mail. Financial therapists are available who understand the unique balance between debt and depression. Look at the Financial Therapy Association or an Accredited Financial Counselor in your area for the emotional peace you need. 

Get a financial partner.

Negotiating and paying your debt is something you can do on your own. You can call your credit cards in hopes of streamlining your payments, but if at any time you believe a partner can get you a better outcome, find one.

Some reputable organizations do not look for upfront fees, creating confusion and additional burdens in your debt journey. 

Beyond Finance has helped clients achieve financial freedom since 2011. With an A+ rating from the Better Business Bureau and 4.5 out of 5 stars on Trustpilot, we think we’re pretty good at what we do. If you need to speak with someone here, it’s free of cost or attached strings. Whatever you do, know that you are not alone and that moving beyond debt is possible. You’re worth it.