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The Bad Emotional Effects of Debt | How to Respond?

1 Emotional Effects of DebtOne of the most disturbing experiences in life would possibly be getting hounded relentlessly by creditors, demanding you pay their money back immediately.

When you are finding it difficult to make ends meet and are barely surviving on minimal resources, this can become even worse.

Sadly, a large number of people are caught up in this dangerous web of debts, which ends up destroying their happiness, families, peace and sleep.

Certainly, you might not have anticipated to be swimming in debts.

Perhaps you believed that you would be able to pay back your student loans but the economy took a bad hit and you couldn’t find a decent job.

Sometimes we end up in unnecessary debt simply due to a flashy lifestyle. Overwhelming debt has a greatly negative impact on our lives.

What are Top 10 emotional effects of debt in your life?

  1. Loneliness: People whom you thought were close to you start avoiding you and you end up feeling isolated. Friends and family are unsure and uncomfortable around you. They might fear that you might request them to dole out some money to help you out – money which they assume they would never get back.


You might also start resenting people who seem to be enjoying a cushy life while you are suffering.


  1. Stress: Naturally, if you are all the time worrying about issues related to money, payments, bills and debt, you will become quite stressed out. Stress can wreak havoc on your personal life.


  1. Depression: A tiredness that you feel deep in your bones, a lack of interest in things that are happening around you andfeeling exhausted all the time can all be signs of depression. Depression is not considered as a serious mental health issue by many people. It is important to realize that people who are going through depression are living through their own personal hell.


  1. Loss of respect: Your family and friends might start looking down on you. They might view you as someone inferior since you have trouble managing your money smoothly. They might be rude to you or might talk bad about you.


  1. Anxiety: Anxiety and debt go hand in hand. The more the debts grow the more anxious you become. This anxiety rubs off on other areas of your life as well. You might start feeling anxious at work or in relationships which can have a detrimental effect.


  1. Frustration: At times the amounts owed as debts are staggeringly huge that you feel a sense of hopelessness creeping in. You start wondering if you will ever be debt-free for surely it seems like an impossible dream presently.


  1. Fear: Debt makes you scared. You end up being scared to answer the phone – what if it is yet another lender harassing you? You fear checking your mailbox – what if it is yet another warning notice? You fear going out and socialising – what if you need to foot the bill?


  1. Shame: Most people buried under mountains of debt feel embarrassed about their financial status. Creditors might also land up at your place of work and threaten you harshly. If you are a fiercely private person who likes to keep their personal and professional lives separate then you might be worried about what your colleagues would think of you now.


1 debt DepressionThis era of social media can add fuel to the fire since we keep seeing our friends who are seemingly enjoying their lives.Someone has just bought a brand new shiny car and has posted a picture of it on Facebook. Someone else has posted a selfie on an exotic beach vacation. You on the other hand are struggling to drag yourself from day to day. You feel ashamed of yourself when you compare where you are and where your friends are in life.


  1. Guilt: You might feel guilty about being a disappointment to your parents who were expecting you to pay off your student loans. Or you might not be able to afford a posh school for your kids like the neighbors. You might have envisioned your life completely different and when the reality doesn’t match up to your plans, you feel upset and guilty.


  1. Physical illness: Our mental health has a direct impact on our physical well-being. When we are not fine mentally, our immunity levels decrease and then our bodies too tend to fall sick often. Treating the illness might need money – something which you are already lacking and it becomes a deplorable cycle.


How to tackle debt-related problems?

As with many other things in life, the first and foremost point is to understand that prevention is better than cure. If you avoid falling into the debt trap hole by being prudent in money matters, you won’t have to deal with debt issues in the first place. This sounds like an obvious piece of advice but you would be surprised by how many people seem clueless when it comes to managing their money.

Why not ask for help?

Always save before you spend. Arrange for standing instructions with your bank so that a part of your income – however small it may be – goes directly to a savings account automatically.

Never make the mistake of living in denial. No, your debts won’t vanish into thin air if you ignore them long enough. Refusing to accept that you are having a hard time coping with debt is not the way to go about it. Do not make excuses for your debts. Take charge of your finances and tackle your debts head on.

If you feel that you are not good at handling money then seek help from a financially savvy friend or family member. Yes, you might need to swallow your pride but don’t let your ego come in the way of a debt-free life. You could even approach professionals to guide you on matters such as investing your money wisely.

Credit cards – boon or bane?

Credit cards can be a lifesaver when used properly. But if you have the habit of excessively swiping your credit cards please nip this habit in the bud. This is an extremely risky practice, one that can send you spiraling into debt in no time at all. Try to live within your means.

While canceling credit cards might not be advisable since it can cause your credit score to drop, not using them is a good idea. Interest rates on credit card balances are pretty high. Strive to pay off outstanding amounts as soon as possible, before the due date to avoid piling on interest.

Are you a shopaholic?

Shopaholics and spendthrifts can easily slip into the debt quagmire. If you find it hard to resist shopping, stay away from the temptation. Keep away from malls even if discounts and sales are announced. Uninstall any shopping applications on your phone. Train yourself not to log into online shopping websites even for window shopping purposes.

Before you purchase any item, pause for a bit and think if you truly need it or if you just want it. Whenever you do need to shop try to purchase in bulk – you can usually save a bit that way. Look out for coupons which can help you stretch that dollar.

Before going grocery shopping to the supermarket, don’t forget to check your fridge and pantry and make a list of what you need. Don’t wander around aimlessly at the store – the goods are deliberately arranged in a way to grab your attention. Just stick to your list. Always compare prices between brands and between stores as well.

1  Responding to DebtMissing due dates?

If you are a forgetful person by nature then set up reminders for payments so that you won’t be late on your payments. This will save you from accruing heavy penalties and fines. Be aware that a history of delayed payments is a sure-fire way to lower your precious credit score. Therefore it is imperative that you make your payments on time.

How can you reduce your expenses?

Be smart. Just because you are cutting down on spending doesn’t mean that you have to hole up at home and get bored to death. Instead of going to the movies and spending on tickets and popcorn, plan a picnic at the park or beach. Instead of taking your kids to the play area at malls, arrange for a play-date at a friend’s home. Instead of going to dinners at overpriced restaurants, plan a pot luck at home with your loved ones.

Responding to debt related problems: what to do?

Firstly, don’t lose heart. Everyone makes mistakes in life. Learn from your mistakes and try not to repeat them. Be kind and compassionate towards yourself and don’t indulge in negative self-talk. Practice repeating some simple positive affirmations daily. Something like “I am strong. I will overcome my obstacles.”

In order to tackle stress and depression, keep yourself busy and active. As the saying goes, an idle mind is the devil’s workshop. One often hears of debt-related suicides. Keeping yourself occupied will help keep away negative thoughts.

Calm yourself and try to practise mediation techniques or if you are religious, pray – it doesn’t cost a penny and you can do it anywhere. Try to stay upbeat by spending some time doing things which you enjoy. It could be painting, gardening, reading, listening to music, dancing, exercising, cooking etc. Also spend some quality time with loved ones. Love and laughter can help you stay positive.

Stay away from negative people and negative influences. Giving into the temptation of alcohol and drugs might seem like an easy way out at the moment. However, they will only pull you into a deeper and darker abyss from which there is no escape.

Are there ways to supplement your income?

If you are mentally healthy, you will actively look for alternative ways to deal with your debt. If you are looking for ways to improve your income, consider what talents you are blessed with. Some of us are good writers while some are good cooks.

Find out whether you can generate some additional income by moonlighting as a freelance writer. Or you could start a small home-based baking business. Gain customers by spreading the news in your neighborhood and by leveraging your contacts. While you might not become a millionaire from these pursuits, every penny counts in the battle against debt.

If you have a relatively light day job, find out if you can extend your working hours by doing overtime. Usually working overtime at odd hours or on weekends can bring in a substantial overtime bonus. However, take care not to burn yourself out with too much work and no rest. You could check out part-time job options to tide you over temporarily.

Can you draft a budget?

One of the best ways to stay on top of your financial situation is to maintain a budget. It could be a simple excel spreadsheet or these days you can even find some great mobile apps for budgeting purposes. Make a note of all your expenses, your cash flow, your outstanding amounts, savings if any etc. This will help you cut down on any wasteful expenditures and will enable you to spend your money in the correct way.

Here is a simple sample budget to get you started. Feel free to customize it to your needs:

Income Source

Income Amount

Expense Reason

Expense Amount




Salary (Primary Job) 5000 Rent 1500
Salary (Freelance) 1000 Utilities 500
School Fees 700
Transport 300
Entertainment 700


Higher this month than previous month due to child’s birthday. Can expect to reduce next month.
Credit Card 600
Student Loan Payment 1000
Auto Loan Payment 550
Medical Bills 100


Insurance 500
Miscellaneous 50
Holiday Fund 500








If possible try to borrow money from sources who can offer you lower interest rates and close debts that have a high interest rate attached to them. This is however only a stopgap measure. In the long run, you need to become more responsible in handling your money.

Clearing off your debts can seem like a monumental task. Arm yourself with patience and persevere. Keep moving ahead one step at a time and one day you will definitely be debt-free.

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