Overcoming Debt Depression & Improving Your Health Both Mentally & Financially

until debt tear us apart
Photo by Alice Pasqual on Unsplash

By Andrew Rombach

From student loans and mortgages to car payments and credit cards, Americans have a lot of debt. In fact, according to Northwestern Mutual, the average personal debt in this country exceeds $38,000 (excluding mortgages). Most debt is from credit cards and mortgages, each making up 25%.

The total consumer debt is now above $13 trillion, and it is estimated that 300 million people are currently in debt. With these staggering statistics, it’s no wonder that being in debt can have a negative effect on our emotional wellbeing. Dealing with debt can be overwhelming, and it often holds us back from enjoying the little things in life. It’s a vicious cycle that can lead to debt depression.

Understand Financial Impact of High Levels Of Debt

It’s important to understand the financial consequences of high levels of debt in order to understand the negative impact on our health. How you manage debt factors into your credit score significantly, and it can also put strain on your budget.

A credit score is a vastly important metric that sums up an individual’s financial history. If you are struggling with debt and missing payments, your score may decline. Having a low credit score, or poor credit, can limit your access to financial products. For example, a low score could bar you from getting approved for a mortgage, or it could limit your credit options during financial emergencies like covering medical bills.

Poor credit also drives the cost of debt because you are more likely to pay high interest rates on credit cards and loans. Higher rates can increase monthly payments (interest capitalization) and take up more disposable income as a result.


With more of your budget devoted to monthly payments, it becomes harder to cover essentials like rent, groceries, utility bills, etc. Fighting to cover these expenses with low disposable income may force you to rely on credit cards more often. This adds to your debt, and you increase the risk of missing debt payments – further damaging your credit history.

This is a cycle that can put massive strain on your finances. High levels of debt can stretch your ability to cover essentials and run the risk of missing debt payments. Your credit score may also be impacted, adding to the budget and payment problems.

So, how does this impact your mental health?

High Debt Can Impact You More Than Just Financially

If you felt stressed reading about debt above, then you already understand how debt is a major stressor for many Americans. In fact, according to the American Psychological Association, 72% of Americans report being stressed about money.

Stress impacts us mentally and physically. It leads to low levels of self-esteem and feelings of hopelessness, but it also can have physical symptoms such as:

  • Sleep problems including insomnia
  • Headaches
  • Digestive issues/upset stomach
  • Muscle tension
  • Low energy and fatigue
  • Chest pain

Long-term stress can lead to more serious chronic health problems including:

  • High blood pressure and heart disease
  • Obesity
  • Diabetes
  • Increased levels of cortisol
  • Skin problems such as eczema
  • Gastrointestinal problems such as ulcerative colitis

Actionable Solutions To Resolving Debt Depression

When we’re stressed, our mental and physical health starts to decline. That’s why it’s important to address financial problems and the subsequent stress associated with having high levels of debt.

Ways to help relieve and resolve physical symptoms of stress include:

  • Engaging in physical activities such as going on a walk, taking an exercise class, playing in a recreational league, going to the gym
  • Meditating including different types of meditation such as loving kindness meditation, progressive relaxation, breath awareness, yoga
  • Setting aside time for hobbies (doing something you enjoy on a regular basis can help bring down levels of anxiety)
  • Getting enough sleep (make sure you get an adequate amount of sleep each night)
  • Eating a healthy diet (stay away from processed food and excess sugar, opting for fruits and vegetables and whole grains)

There are also ways to manage your debt more effectively which will help keep debt depression at bay.

  • Strategically pay off your debt
    • Debt Snowball method: This method is a way to pay off your debt that involves making the minimum payments on all your debts, and then you take any remaining money and put it toward your smallest balance. This helps knock off smaller debts. It can feel good making progress toward paying everything off.
    • Debt Avalanche Method: Again, you make sure to make the minimum payments on all your debts, and then you any remaining funds to pay the debt with the highest interest rate. This helps mitigate the cost of high interest by reducing capitalization.
  • Debt consolidation: If making minimum payments on various debts is hard, you may consider debt consolidation which is a common use for personal loans. This involves paying off multiple debts with one loan, basically combining your debt into one monthly payment. Ideally, the loan has a lower interest rate than the average of all previous rates.
  • Balance transfer: Similar to debt consolidation, a balance transfer involves applying for a new low-rate credit card and paying off the old credit card. This effectively transfers the debt to a new card – preferably with a lower interest rate.
  • Bankruptcy: Bankruptcy should be a last resort to get relief from your debt because there are serious consequences. Keep in mind that some debts can’t be forgiven, and filing for bankruptcy stays on your credit report for 7-10 years, making it almost impossible to get a credit card or a loan for a long time.

Debt can lead to feelings of hopelessness, making debt depression a real issue that people struggle with. However, with some targeted solutions, including healthy living practices and strategic financial moves, you can lower stress and pay off your debt.

Andrew Rombach is a Content Associate for Lendedu – a website that helps consumers with their finances.

Nathan S. Gibson

Nathan S. Gibson is an independent worker compliance business partner who provides expertise and creative solutions to enhance workforce flexibility and maintain compliance with worker classification requirements. He helps mitigate the risks associated with the misclassification of self-employed consultants, freelancers and independent contractors.