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7 Effects Debt Has on Your Emotional and Physical Wellbeing

“Today, there are three kinds of people: the have’s, the have-not’s, and the have-not-paid-for-what-they-have’s.” - Earl Wilson


I couldn’t help but laugh at this quote by Earl Wilson. Unfortunately, the humor is found in it’s delivery, not necessary it’s content. If you’ve been fighting debt, you’re not alone. Almost every person you’ve ever met, will meet, and may never meet, has a story to tell about their relationship with debt.

 Consider these statistics about personal debt in America1

  • More than 189 million Americans have credit cards.
  • The average credit card holder has at least four cards.
  • On average, each household with a credit card carries $8,398 in credit card debt.
  • Total U.S. consumer debt is at $13.86 trillion. That includes mortgages, auto loans, credit cards and student loans.

 There are a few camps that people typically fall into. They either 1) use debt responsibly with proper resources (human capital, for example) to pay if off, 2) use debt irresponsibly without a strategic plan to pay if off, or 3) rely on debt because they don’t have the resources necessary to maintain their basic living needs. Sometimes people shift between these categories, other times they remain perpetually stable in one or the other.

Take my situation for example. I graduated with an undergrad in finance and around $100,000 in debt. This included mostly student loans and credit cards, but also a personal loan. While I had assumed I was being responsible, I can now be honest with myself in saying that the credit card and personal loan debt were far from necessary. 

Immediately after graduation, I was in a tough position. I wasn’t able to earn nearly enough to address my cost of living as well as the debt I incurred. This led to more reliance on credit cards, and inevitably many of the effects I’ve listed below. 

Regardless of “good” debt or “bad” debt, borrowing money and being on the hook to repay it in the future can cause several challenges for the human mind. There are a number of underlying issues that contribute to this problem, which are both psychological and emotional. 

What Do Your Spending Patterns Reveal About You?

[This short assessment identifies patterns in shopping and consumer behaviors and provides feedback on how those behaviors might impact overall financial goals.]

When debt becomes a burden, these effects can be devastating, affecting people in a variety of ways. Here are a few:

Anxiety and Depression

Studies have shown that individuals who struggle with debt are more likely to also suffer from depression and anxiety. This may show itself in several areas of your physical wellness, including headaches, lack of quality sleep, or an inability to focus or function. 

There is also a high link between suicide and debt, and people who commit suicide are eight times more likely to be in debt.

Mentalhealth.org has posed four questions to ask yourself if you think you may have a debt problem2:

  • Do I often feel anxious when thinking about how I will manage my repayments?
  • Am I struggling to or do I routinely miss the minimum payments towards utility bills, credit cards or rent?
  • Do I avoid telephone calls from unknown numbers and ignore letters from creditors?
  • Am I unable to set aside money for a sudden and unexpected reduction in my income such as redundancy, car expenses or emergency repairs?

If you answered ‘yes’ to any of these questions, then you should consider getting help from a loved one and/or a Certified Financial PlannerTM to help get you back on track.

Resentment & Irritation

When debt becomes a problem, so can resentment, especially in relationships. According to a poll by insider.com, 36.1% of couples that divorced did so due to financial issues3. These issues varied, but almost all contributed to the buildup of debt and overspending. 

 "Arguments about money is by far the top predictor of divorce," said Sonya Britt, assistant professor of family studies and human services and program director of personal financial planning4. When large amounts of debt reside within a household, it creates a dark cloud and typically results in a variety of challenges for your close relationships. 


One way to deal with the emotional stress that debt causes is to not deal with it at all. When people feel overwhelmed, denial of the situation often seems easier than taking the first step toward fixing the problem. 

The constant reminders of those bills that need to be paid, calls from creditors, and consistent overdraft or over the limit charges can cause a toll. Many people feel that if they act as if the problem doesn’t exist, it will go away. Instead, this creates a reverse effect, as balances grow higher and the debt continues to grow.

Denial is one of the most difficult effects to tackle, however. By definition, denial is the inability to believe the truth even when confronted with facts. Thus, for many people the problem isn’t viewed as a problem. 

Here are a few questions to help determine if you’re a victim of financial denial:

  • You don’t open your credit card, banking, or other debt statements on a regular basis. If you do open them, your attention may go directly to the minimum payment rather than the details of the balance, the interest rate charges, or where the money is being spent.
  • You apply for new credit cards on a somewhat regular basis in order to maintain your lifestyle. You may also open new credit cards to take advantage of a promotional APR, shift existing balances to the new card, then continue building debt on the previous cards.
  • You may know what your total debt load looks like, such as credit cards, mortgage(s), car loans, etc. but you haven’t the slightest clue how to address it strategically.
  • You may believe that your future earnings will be well-sufficient to address your current spending habits, or you may simply think that everything will work out in the end (but have no strategy in place to make that a reality).

Stress & Tension

When debts are looming and there isn’t enough money to pay, stress and tension quickly become a factor. According to WebMD.com, stress affects emotional, physical, cognitive, and behavioral wellness5.  

This stress can have an obvious impact on your quality of life, and the quality of life of those around you. Here are examples of each:

  • The emotional stress affects your view of the world and your place within it. It can make even the most positive of circumstances seem bleak. 
  • Physical stress equates to low energy, headaches, and frequent colds and infections. This in turn can lead to absence from work, thus placing more pressure on your financial woes. 
  • Cognitive symptoms may include the inability to focus, poor judgement, and being overly pessimistic about life and life events. 
  • Behavioral symptoms generally include procrastination, changes in appetite, and exhibiting nervous behaviors such as nail biting or pacing. 


Frustration often leads to anger. It can be frustrating knowing debt is a major problem and that you may or may not have had a direct impact on the situation. When you feel as if you’re up against a wall, frustration can make you do impulsive things. 

No one likes to deal with the effects of unwanted stress, especially in instance where you may have no control over the debt, such as medical emergencies or the loss of a job.


If you’ve put yourself in debt and are now fighting to keep your head above water, you may be going through a period of regret. 

Regret is an evident byproduct of many financial decisions, but is most often found in those decisions that result in an increase in debt. Think of that new car you purchased, the student loans you’ve accumulated, and the house to live in. 

While these examples aren’t based on inherently bad decisions, they can lead to regret among many of the other emotional effects laid out in this article. 

Take more specifically the student loan experience. Most students don’t realize how quickly the grace period comes. FYI, this is generally six months after you graduate, drop out or drop below half-time status. 

To make matters worse, there is even less understanding on how quickly interest will accrue, the payback options, and the fact that they are now facing a mountain of debt when first starting a career and building a life.


Once the regretful period is over and reality starts to sink in, a period of embarrassment may take place. Who wants to tell people they can’t go out to dinner, or participate in other entertainment events because they are in a mountain of debt? The higher the debt, the more embarrassed someone may feel.

The avoidance of embarrassment can often result in denial, as mentioned above. This then leads to a vicious cycle that may have life changing effects.  

In Summary

While debt is generally accrued via consumption, the benefits of consumption can be quickly erased by the impact debt has on your mind, your body, and your relationships. 

The first thing to remember is you are not alone. Heck, the total consumer debt in the US is almost at $14 trillion. This is not to discount your position, but rather to highlight the situation that many of us are in.

There are many people going through the aforementioned challenges s it relates to debt. Understanding the problem and implementing steps to overcome the problem is the only way these feelings of inadequacy will start to fade. 

Once you start making baby steps and see the debt vanishing, the sense of accomplishment is priceless. If you personally relate to feeling these symptoms, talking to a financial professional who specializes in debt reduction is a great first step in the right direction.

 What Do Your Spending Patterns Reveal About You?

 [In case you skimmed over it above, this short assessment identifies patterns in shopping and consumer behaviors and provides feedback on how those behaviors might impact overall financial goals.]

This article was written by Jeff Stewart, CFP®, CRPC® on behalf of Lucid Wealth Planning LLC. Please contact Jeff if you have additional questions or would like to review your situation in more detail.


1 https://www.debt.org/faqs/americans-in-debt/

2 https://www.mentalhealth.org.uk/a-to-z/d/debt-and-mental-health

3 https://www.insider.com/why-people-get-divorced-2019-1

4 https://www.k-state.edu/media/newsreleases/jul13/predictingdivorce71113.html

5 https://www.webmd.com/balance/stress-management/stress-symptoms-effects_of-stress-on-the-body#1


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