How Being in Debt Affects Your Mental Health

Being in debt can be stressful and overwhelming. Judging from past recessions and the student loan crisis, debt isn’t good for most people’s mental health either. In fact, research from the University of Southampton in the U.K. found that at least 25% of people with mental health problems were in debt.

If you’ve ever been in debt before, you know that it’s not a comfortable place to be financially. In terms of your mental health, the negative effects could be worse. Here are some key ways that being in debt affects your mental health and what you can do to change this.

Shame and/or Embarrassment

In today’s society, there is a lot of shame tied to debt. Most people have debt and you may even think it’s normal to take out a loan or max out your credit card for an emergency. However, getting into debt can cause you to feel ashamed of the financial decisions you made or even embarrassed.

You may feel like your debt is tied to your self-worth or express feelings of shame if you’re not able to pay down your debt quick enough. It’s also not uncommon for someone to feel embarrassed to mention their debt to a partner or disclose the full amount which can lead to financial infidelity.


Denial is a coping method that causes you to block out reality and pretend like everything is okay. If you’re in denial, you may not see your debt as an issue or feel motivated to pay bills on time. You may also pick up unhealthy habits to help continue your state of denial all while your financial problems grow.

Fear and Anxiety

Fear and anxiety are something a lot of people struggle with and money can be a key cause of this. If you have a lot of debt and are unsure of how you’ll make ends meet, this can cause a lot of stress and worry.

You may become afraid to spend money or fearful of what the future holds in general. Anxiety can also lead to depression and even affect you physically as well. As someone who struggles with anxiety, I’ve experienced panic attacks and chest pains from time to time and it’s a horrible feeling.

In just a moment I’ll explain some healthy ways to improve your mental health regardless of having debt but it’s important to understand all the negative effects first.


Has debt affected your marriage, friendships, or any relationships with others? You may resent your partner for getting into debt and not being honest to you about it. I’ve also heard a few stories from people who got out of a marriage or relationship with debt from their ex-partner which could also lead to resentment.

Resentment over debt doesn’t have to be contained to a romantic relationship either. Maybe you hold resentment toward your boss who won’t pay you more money to take care of your debt, or dependent family members who rely on you.

No matter the reason, resentment and holding onto unforgiveness won’t get you anywhere and will just contribute to a decline in your mental health.

How to Protect Your Mental Health in Spite of Debt

Debt does not have to destroy your life or your mental health. You are more than your debt and you can overcome it. If you feel like being in debt affects your mental health in a negative way, here are a few things you can do.

Here are some key ways that being in debt affects your mental health and what you can do to change this. Click To Tweet

Talk to a Licensed Counselor

Counseling is an important tool that can be used to help improve your mental health. If being in debt makes you experience anxiety, depression or has negatively affected some of your relationships with others, it may be time to talk to a licensed therapist.

A therapist can help you develop better skills and habits that improve your mental health and help you cope with your debt. One of the biggest factors that can prevent you from seeking professional counseling is the cost. Your insurance may help cover mental health services and you can also try community clinics that will offer services on a sliding fee scale.

As another alternative, and are great affordable alternatives if you’re looking to chat with a therapist online or via text.

Get on a Realistic Budget

Yes, getting on a realistic budget can help you if being in debt is affecting your mental health. Financial stress and worry often stem from not having a clear plan. If you have debt and don’t know if you can afford groceries or a vacation, this can negatively affect your mental health.

The best thing you can do to combat this is to establish a financial plan for getting on a budget. Some people shy away from budgeting, but a budget is just a spending plan that tells your money where to go. A budget can actually relieve some of your financial stress because it allows you to create a plan for covering expenses and paying off your debt.

Schedule a time to sit down and layout all your expenses and income. Be realistic when setting budget categories and track your spending for accountability.

Start a Gratitude Journal

Focusing on the negative implications of your debt can often negatively affect your mental health. Shift your mindset by choosing to focus on gratitude instead. This won’t eliminate all your problems overnight, but it will change your outlook and how you feel about your debt.

For example, when I first started paying off my student loan debt, I developed an unhealthy obsession with it and really hated my debt. This became draining and after a while, I shifted my focus to gratitude. My debt helped me make it through college and jumpstart my career. I also had a lot of other things to be grateful for like a nice apartment at the time, a car, food, and the ability to provide for my son.

Focusing on gratitude helped me start feeling resentful and ashamed of my debt.


Debt is just debt. However, being in debt affects your mental health in more ways than you’d realize. It’s important to know that you can get out of debt in your own time, but it’s not the end all be all. Even with debt, you can change your mindset and establish an action plan that contributes to a healthier mental state.