Can Debt Affect Your Mental Health? Here’s What You Need to Know
When we think of personal finance, we often focus on numbers and budgeting. However, the impact of money on our mental health is equally important. Living in a world where debt is a common occurrence, it’s essential to understand the link between debt and mental health.
Whether it’s car loan repayments, credit card debt or stamp duty Melbourne, debt can have a significant impact on your wellbeing. In this guide, we’ve put together everything you need to know about how debt affects mental health and ways to cope with it.
The Link Between Debt & Mental Health
People in debt are more likely to face a variety of mental health problems, including stress, anxiety and depression. Research conducted by the Mental Health Foundation in the UK found that two in five adults who had financial difficulties reported experiencing mental health issues.
Debt isn’t just monetary; it can impact other areas of our lives, including relationships, work performance and self-esteem. It’s not uncommon to fall into debt due to unexpected life events such as job loss, illness or a relationship breakdown. However, not addressing debt-related stress and anxiety can exacerbate existing mental health problems drastically.
Coping Strategies for Debt-Related Mental Health Issues
The good news is that there are ways to manage the impact of debt on your mental health – here are a few strategies that can help you cope:
- Open up: Talk to your loved ones or a financial counsellor. It can be challenging to discuss private financial matters, but talking about it will lessen the burden and help you identify solutions.
- Create a budget: It’s essential to know where your money is going by creating a budget. This way, you can prioritise the most important bills and work towards paying off your debt.
- Practice self-care: Exercise, eat well, and get sufficient sleep. Taking care of your physical and mental well-being can help you better navigate tough financial situations.
- Find new sources of revenue: Picking up extra work or selling some of your possessions can help increase your income and pay off your debts faster.
Getting Assistance with Debt-Related Stress
If your debt has become unmanageable, it’s essential to get assistance. A few resources that can help include:
- Financial counsellors: These professionals provide non-judgmental advice and support for a variety of financial situations, including debt management.
- Credit counselling services: These organisations offer free or low-cost services such as creating a budget, negotiating with creditors and setting up a debt management plan.
- Consumer credit helpline: Free in Australia, the national helpline can help you navigate debt-related issues, including debt collectors or bankruptcy.
Long-term Strategies to Stay on Top of Your Finances
Once you have a handle on your debt and mental health, it’s essential to maintain good financial practices. One approach is to keep a log of your progress, including the amount of debt you’ve repaid and your credit score. You can also build an emergency fund to help reduce financial stress if unexpected expenses arise. And finally, consider setting up automatic transfers from your checking account to a savings account. This way, you won’t be tempted to spend money on unnecessary purchases.
Ready to get started?
Debt can be a significant mental health burden, but it’s essential to know that there are ways to cope. By understanding the link between debt and mental health, creating a budget, seeking assistance when needed and practicing self-care, you can better navigate this difficult situation. Remember, there is always hope!