Debt and Depression

A 2013 study found that those who are in debt are three times more likely to experience mental health issues. Furthermore, individuals diagnosed with mental health problems, including depression, are more susceptible to financial difficulties. According to the National Alliance on Mental Illness, Americans lose over $193 billion in earnings each year due to serious mental illness. This does not include medications, therapy and other treatment related expenses.

If you are suffering from the lack of energy that often accompanies mental health struggles, it can be easier to lose track of your spending and/or make rash decisions about money. Similarly, having to take time off from work can reduce your income and treatment costs can result in large medical bills.

Questions to ask yourself if you believe you may have debt problems include:

Do I feel anxious when I think about how to manage my finances?;

Do I leave bills unopened and/or struggle with or routinely miss minimum payments for credit cards, student loans, my rent or mortgage and utility services, including my cell phone?;

Do I ignore E-Mails, letters or phone calls from creditors?;

Do I open a new credit card when my existing ones are maxed out?; and

Have I failed to set aside money for unexpected expenses, such as job loss, car repairs or hospitalizations?

Not having enough money to pay for your expenses restricts your choices and can cause or worsen mental health issues. Debt increases as interest charges and late fees accrue. To improve your financial situation establish goals, such as reducing your expenditures, increasing monthly payments to creditors and establishing a set date for paying off individual bills.

Focus on small actions you can take to improve your situation. For example, contacting Open Path Psychotherapy Collective, a non-profit nationwide network of mental health care providers, will allow you to find in-office care at a greatly reduced rate. Set a budget using the 50% (necessities, such as food and rent)/30% (“wants,” including clothes and entertainment)/20% (financial goals like getting out of debt, saving for retirement and establishing an emergency fund) model.

Credit counselors at non-profit agencies can help you develop a budget and work with your creditors to reduce interest rates. Your debt will be consolidated into a single monthly amount that the agency will distribute to payees. (Ensure that any company you work with is affiliated with the National Foundation for Credit Counseling [NFCC]. All NFCC members are 501(c)3 nonprofit organizations.) Above all, realize that you are not your debt and help is available.

Thank you to Blake from CreditCards.com, who recently E-Mailed suggestions for resources to add to the website. Visit CreditCards.com to view its new guide on “Debt Impact on Mental Health:  How to Rebuild Your Finances.”