Debt can be overwhelming. For many, the burden of financial stress leads to a decline in mental health, with debt-related depression being a serious concern. The stigma surrounding debt can make it hard for individuals to seek help, which can result in feelings of isolation.
This guide will explore how debt impacts mental health, offer insight into recognising debt-induced depression, and provide practical steps to take back control of both finances and emotional well-being.
How debt affects mental health
Debt is more than just a financial issue – it’s an emotional one too. From persistent anxiety over bills to feelings of guilt and failure, the weight of unmanageable debt can lead to significant mental health challenges. Money and Mental Health explains that the link between financial problems and emotional stress is well documented, and for many, debt becomes an all-encompassing burden, affecting both physical and psychological health.
Stress from debt can lead to sleepless nights, impact your relationships, and your general day-to-day life. It’s important to understand you are not alone. Many people face similar challenges, and there is support available to help you through it.
Can debt cause depression?
Yes, debt can cause depression. Equifax says there’s a strong link between debt and poor mental health and that people who are in debt are more likely to face common mental health issues. While not everyone with debt will experience these issues, those who feel trapped by financial struggles are at a higher risk. The shame and stigma often associated with debt can amplify feelings of worthlessness and despair which are key components of depression.
Unlike anxiety, which is characterised by fear and unease, depression often brings feelings of sadness, hopelessness, and loss of interest in activities once enjoyed. Debt depression can manifest in several ways, including chronic fatigue, difficulty concentrating, and withdrawing from social connections. If you’re feeling this way, it’s important to acknowledge that debt may be the root cause.
How to deal with debt depression
The good news is that there are ways to overcome debt depression. Although the path may feel long and difficult, taking small steps towards recovery is key. Recognising the signs and seeking appropriate support can set you on the right course to managing both your mental health and financial challenges.
Spot the signs
It’s easy to overlook the early signs of depression, especially when you’re consumed by other concerns like debt. However, spotting the signs early can help you take action before things worsen.
According to the NHS, below is a list of key symptoms to watch out for:
- Continuous low mood or sadness
- Feeling hopeless and helpless
- Having low self-esteem
- Feeling tearful
- Feeling irritable and intolerant of others
- Finding it difficult to make decisions
- Having no motivation or interest in things
- Feeling anxious or worried
- Not getting any enjoyment out of life
If you’re noticing these signs in yourself, it’s important to reach out for help.
Seek professional mental health support
Dealing with depression requires more than just managing your finances. Professional mental health support is essential to help you process your emotions, develop coping strategies, and get back on your feet. Cognitive-behavioural therapy (CBT) is one effective treatment for those dealing with depression, including cases triggered by financial stress.
The NHS provides free mental health services that can be a great first step. You can speak to your GP about options, including talking therapies or medication if necessary. There are also many charities like Mind and Rethink Mental Illness that offer support for those struggling with their mental health.
Find debt management support and take practical action
Taking practical action will also help relieve some of the pressure on your mental health. At MoneyPlus, we can offer professional debt advice and can help you explore options that suit your situation, whether it’s an Individual Voluntary Arrangement (IVA) or a Debt Management Plan (DMP).
You don’t need to handle this alone. Speaking to a debt advisor can give you a clear sense of your options, help reduce your payments, liaise with your creditors on your behalf, and in some cases, freeze interest on your debts. By taking control of your financial situation, you can lift a huge burden off your shoulders and begin to focus on your recovery.
Change your relationship with money and look after yourself going forward
Once you’ve addressed your debt and started managing it effectively, it’s important to change your relationship with money going forward. Here’s a list of a few strategies to help:
- Create a budget: Understanding where your money goes each month can prevent future financial issues. Build a realistic budget that accounts for essentials first.
- Limit unnecessary expenses: Once you have a budget, cut down on expenses that don’t bring value into your life.
- Build an emergency fund: Saving for unexpected expenses can provide peace of mind and prevent the need to rely on credit in the future.
For more tips on how to change your relationship with money, see 10 Tips on How To Become Debt Free.
Finally, self-care should be a priority during and after this process. Make sure you’re getting enough sleep, eating well, and exercising, as these can all have a positive impact on your mental health. If you’re feeling overwhelmed, you can also check out our guide on How To Deal With Debt Anxiety, which offers additional advice on managing stress related to debt.
