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  • Writer's pictureMarina Copeland

The Psychological Impact of Debt: How Do You Manage Stress and Anxiety?

Being in debt can feel like carrying an enormous weight on your shoulders. American households carry a grand total of over $17 trillion in debt as of 2023, and the number is expected to continue growing year by year.

The Psychological Impact of Debt: Manage Stress and Anxiety

Owing large amounts of money or falling behind on bills doesn’t just cause financial stress. It can also impact your mental and physical health in a significant way.

For some people, it can even lead to the development of serious mental or physical illnesses when the pressure is too high.

But it doesn’t have to be that way.

There are steps you can take to protect yourself from the negative psychological impacts of debt and keep yourself strong and healthy while you pay back what you owe—and many of them don’t cost you a cent.

It’s never too early or too late to start developing healthy coping mechanisms for dealing with debt. If you want to begin, use these seven tips to help you on your journey to financial, physical, and mental well-being.

Tips For Managing Debt-Related Stress And Anxiety

It’s normal to feel anxious and stressed when you owe a person or an institution a lot of money. But as much as it may feel like it at times, debt doesn’t define your identity or your self-worth.

You are so much more than your debt, and with the right strategy, you will come out the other side in one piece and perhaps even more financially savvy.

Here are some tips for managing debt-related stress and paying back what you owe as quickly and painlessly as possible.

1. Understand your debt

Scary topics become scarier when you lack an understanding of what they are. The more clear you are about what your financial situation looks like, the easier it will be to resolve it.

Even though the idea of facing up to the finer details of your debt may make you want to run away, doing so is a crucial first step towards successfully paying it off. Find out what you owe, by when, if there are any penalties or tax implications, and what your repayment terms are. If possible, renegotiate your repayment terms, ask for a reduction in increase, or for a full settlement amount with a discount. If you have all this information, you’ll feel more in control of your money.

2. Try to supplement your income

If your current earning rate isn’t enough to pay off what you owe on time, don’t panic. There are ways to expedite the process, and the most obvious one is to start a profitable side hustle to bolster your monthly wages.

Fortunately, it has never been easier to run a side hustle. There are plenty of ways to earn extra money, either by using your existing skills or learning new ones. Having a side hustle can help to relieve some of the financial pressure you feel at month’s end. Plus, it helps you diversify your income stream, ensuring that if your employment circumstances change, you have something to fall back on.

3. Make time for relaxation and self-care

Contrary to popular belief, self-care doesn’t have to mean spending excessive amounts on exotic vacations or trips to a luxury spa. It also means eating well, spending time in nature, and doing things that make you genuinely happy or inspired. Such as:

● Reading an inspiring book

● Engaging in creative exercises (painting, ceramics, etc.)

● Chatting with friends

● Cuddling a pet

● Going for a hike

Finding the time to relax and enjoy your life is one of the best things you can do for your psychological well-being.

4. Keep yourself in good physical shape

We all know how deeply beneficial regular exercise is for both the body and the mind. Exercise helps you stay mentally clear, energetic, focused, and level-headed—all things that can help you tackle your debt problems with clarity and increased motivation.

It will also help you fend off any rising anxieties or risk of depression if the debt is particularly difficult. There are no downsides to being in great physical shape.

5. Find emotional support from friends and family

This is not a path you have to walk alone. Debt is an extremely common affliction, and leaning on one another for support throughout it can have huge psychological benefits.

Don’t be afraid to talk to your friends and family about your stress. This can help you to see the situation from a different perspective, provide emotional relief, and remind you that you are not going through these feelings alone. Perhaps you will even gain insight into better coping mechanisms.

6. Seek professional guidance

There are two types of professionals in particular that can help you with your debt stress and anxiety. Firstly, a debt management professional can help you assess your financial situation. They can assist you in developing a strategy for paying your debt off in the fastest, least troublesome way possible, ensuring your credit score isn't too negatively affected.

Secondly, a therapist who specializes in the psychological impacts of debt. They can help contextualize your emotions regarding your debt and help you prioritize your mental health while you find practical ways to deal with the situation.

7. Acknowledge and accept your situation

Even though debt can feel all-consuming, it’s important not to let it get the better of you. If you have a good understanding of your financial position, you ensure your taxes are filed correctly, and you have a repayment plan in place, there’s really not much else you can do. You need to accept the situation for what it is and work through it until it’s all over.

Don’t give in to your anxieties. Look after your mental and physical health, lean on loved ones for support, and engage in activities and habits that actively soothe, strengthen, and inspire you. Be patient, stick to your plan, and you will get past this financial hurdle.

Final Thoughts

Debt can be scary to deal with when you lack the tools and resources to repay it in a consistent and productive way. At its worst, debt can be a catalyst for depression, anxiety, and even serious physical illnesses such as heart conditions.

But with the right approach, anyone can develop a plan for working through their debt in a methodical, balanced, and level-headed way.

Using these tips, we hope you can find emotional comfort and practical support in the process of settling your debt and creating a repayment strategy that allows you to continue living your life with energy and optimism.


Disclaimer: Any and all information is not intended to be, nor is it, legal advice. Please consult your attorney for information concerning allowable rates of interest.

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