Debt and Mental Health

Studies have found a correlation between individuals with debt and mental health problems. The likelihood of having a mental health disorder is three times higher among those with unsecured debt and people who died by suicide are eight times more likely to be in debt. Mental health issues can make it difficult to manage money. If you are depressed, you may lack the energy or motivation to keep track of your spending; and individuals experiencing a manic episode, may make rash, unwise purchases. Many individuals associate shopping with happiness and negative emotions, like envy, frustration, loneliness, resentment or sadness, can lead to overspending.

It is important to be careful about the types of media you view. For example, home improvement and reality television shows make extravagant lifestyles seem more prevalent than they are and like they should be within everyone’s reach. Understand the difference between needs (food, shelter, clothing and medical care/prescriptions) and wants (a car, entertainment, a pet, a smartphone or streaming services, etc.) Examine your financial behaviors. Do you only buy brand names or spend your entire paycheck? Try keeping track of your expenses, putting yourself on an allowance and using direct deposit to save money.

If you are in debt, find one person you with whom you can be honest about your situation. He or she does not need to have the ability to fix your problems or even to help. Simply talking about financial issues can lessen anxiety and he or she could offer a new perspective. Writing down your debts in an organized manner will allow you to begin addressing them one item at a time. Open a savings account and deposit a few dollars each week. This will allow you to focus on something other than simply paying your bills.

Easy ways to lower expenses include packing your lunch every day, which can save between $20 and $100 each week; brewing your own coffee (Just having one cup at home each day can reduce your costs by $80 per month or almost $1,000 a year); and using tap rather than bottled water. (According to the Food and Drug Administration, there is no difference between the Federal standards for the two and avoiding plastic water bottles also is better for the environment.) Set a budget for your weekly expenses and spend only cash instead of using credit cards. Create a list of the things you want to buy and then wait two weeks to make any purchases. Often you will find that you no longer want the item(s). Keep the receipts for everything you do buy. That way if you need to return something, you can get a full refund.

Research has shown that adolescents with jobs become better savers. Parents should introduce the concept of credit scores and how having a good one helps when you get a cell phone, return to school or buy a car or house. It can even lower your insurance rates. Parents also should explain the difference between credit and debit cards, and consider making teenagers authorized users on an existing credit card and then requiring them to pay the amounts they charge. This not only provides youth with a way to deal with emergencies, like running out of gas, it also helps them learn how to manage credit. There is no need for individuals to have more than two credit cards, and keeping a list of the account numbers in a secure place will allow you to promptly report a card if it ever is lost or stolen.

You can improve your psychological health and gain a greater sense of control over your debt through lifestyle changes that lower your expenses and/or increase your sources of income. Establish one day a week or month to look at your bank and credit card accounts and what you have spent since you last examined them. This will make thinking about your finances a routine part of your life and allow you to be more rational about them. Finally, instead of always focusing on your goals, be sure to take time to review and acknowledge your progress as you pay off debts or save money, and consider letting your friends and family members know that you are trying to minimize your expenses, which can prevent constant invitations to go out and spend money on dining, entertainment or shopping.