The Emotional Cost of Debt


As if being in debt wasn’t bad enough! There is an emotional cost of debt that many don’t see but almost everyone in debt starts to feel. It is the emotional toll it can take on your mental health. It’s something you may not notice at first, in fact at first you may not have it at all. But just as an investment builds over time, so debt begins to charge your emotional state as well. When this change becomes noticeable is, of course, different per person and situation, but how it happens is the same for everyone. It is the moment you consider you are in control of whatever debt you have to the moment you consider you are not, and once that transition occurs it can be a tough viewpoint to break.


The Emotional Cost of Debt

The emotional cost of being in debt can really weigh heavily on those around you. Most likely you will not even be the first person to notice when that transition happens, instead it will be your family and friends. You may find yourself fighting more with your significant other or closest friends. You may become withdrawn and not engage with those around you. I believe this is especially true when you are first trying to turn your debt around. The mindset of “I must not spend another penny on any unneeded activity!” or “I will not do any more birthday outings with friends.” or  “I will not join my coworkers for a cup of coffee.” While these mindsets are not necessarily wrong, especially if you are trying to handle debt, it neglects the human side of the equation.


Remember to Have Fun

We need to have fun every once in a while. The lengths a person will go to to achieve only a brief moment of happiness is actually pretty staggering, I mean really think about it. You work 20 to 40 hours a week, to make money, which most people use to do three things; pay bills, spend on life amenities and save for a reward that can take months or even years to achieve. All this can be further reduced to saying, you earn money to handle obligations and for the fun or enjoyment of life.


If you enter the mindset of, ‘every action I take is only for the handling of obligation,’ and you eliminate the enjoyment of life, what are you left with? Pretty clearly a lack of enjoyment of life.  Hence, why you may become withdrawn, moody, and in general unpleasant for others to be around. I would argue this is contributing to the emotional cost of debt. There needs to be a balance, even in the toughest of times. Otherwise it all becomes self defeating, everything you do is to pay off what is owed to others. That is, put simply, slavery.


Get at Cause

The first step to handling any ill-gotten emotions from debt is to first get yourself at cause over your finances. Really understand what your money is doing and where it is going. Then make adjustments so that what it’s doing and where it’s going all contribute to getting out of debt.


How do you handle getting out of debt, but still making sure you can have some fun? For the former I recommend this guide. For the latter, the simplest and recommended way is to add a line item to your budget for just that purpose so that you have money set aside money for it. Literally just call it your fun money. Set aside a small but realistic amount and that will be your money to use to go to one nice dinner with friends or a coffee break or whatever it is that will let you handle your debt but not feel like a prisoner to life in the process.


The Final Word

If you are feeling overwhelmed and down regarding being in debt, I understand. I’ve been there. Pick a good friend to vent to if you need, but remember that anything other than gaining a handle on your finances, will only be a bandaid fix not addressing the real problem of being in debt. The first step to handle the emotional cost of debt is to gain the knowledge and understanding of what your finances are doing. With that knowledge you can then take responsibility in confronting them and controlling what your money is doing. This combination of gaining knowledge, and taking more responsibility and control all leads to a greater understanding of what your money is doing, and even better, a greater understanding of how to handle life.


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