Source 2: The Emotional Effects of Debt By Bill Fay
5 It is unclear who first said, “Money can’t buy happiness.” Whoever it was, they probably were not staring at a tall stack of bills and an empty checking account. Money cannot buy happiness, but it is the only thing that will pay those bills. Doing that may not trigger an endorphin rush of happiness, but it sure beats the alternative.
6 Having enough money to pay all our bills allows us to provide for our families, plan for the future, and enjoy our leisure time. Not having money restricts our choices and wreaks emotional havoc on our psyche 1 .
Among the negative effects are low self–esteem and impaired cognitive functioning. That means you cannot learn, remember, be attentive or solve problems as well when you are freaking out over your water bill.
7 A study of 33,720 U.S. households published in the January 2016 edition of Psychology Science found that those with higher levels of unemployment were more likely to purchase over–the–counter pain killers.
That was not particularly surprising, but a research team discovered that simply thinking about the prospect of financial insecurity was enough to increase pain.
People reported feeling almost twice as much physical pain after recalling a financially unstable time in their life compared to those who thought about a secure period. It is rare for someone to never have money problems.
Trouble happens, jobs disappear, marriages fail, people get sick, their homes lose value and bills just keep piling up. No one is immune.
8 So, what came first, the pain or the debt? Responding to Debt
9 Does debt cause mental illness, or does mental illness cause debt? Yes.
10 That is the best answer researchers have come up with after years of study. Some research found that worrying about debt triggers stress, which reduces your resilience against mental health problems.
Other studies show mental health problems decrease self–control, increase spending, and basically mess up a person’s financial judgment. Regardless of how someone falls behind, being in debt can trigger unsettling emotional responses.
Denial
11 Consumers do not have the luxury of endless deficit spending, though many act as if they do. They spend compulsively while ignoring their deteriorating condition.
They put off dealing with problems until some outside event credit denied, threat of foreclosure, legal action, harassing phone calls from debt collectors forces a change.
Stress
12 Debt and stress are like co–joined twins. The average U.S. household with credit card debt has balances totaling $16,748, and the average household with any kind of debt owes $134,643, according to a 2016
1 Psyche: the human soul, mind, or spirit
Nerdwallet study. Conversely, 72% of Americans said they felt stressed about money, according to an American Psychological Association study. And 22% said they felt “extreme” stress over their finances.
13 So, what exactly is “stress?” The term was coined by endocrinologist 1 Hans Selye in 1936, who defined it as “the non–specific response of the body to any demand for change.”
In modern financial terms, that means you hyperventilate when the Visa bill arrives. Stress may be hard to define, but it manifests itself in obvious ways lack of sleep, loss of focus, nagging worry. Anger
14 As the economy sagged, anger issues rose. The phenomenon got its own name in medical circles: Debt Anger Syndrome. Instead of panicking or denying, victims get mad.
They are mad at creditors who continually send them bills; mad at the mailman for delivering the bills; mad at their bosses for not paying them more; mad at their spouses for not making more money; mad at their kids for needing new braces; and mad at themselves for getting into this fix.
This not only can ruin relationships, the physiological effects can lead to migraines, heart disease, and reduce your resistance to infections.
Depression
15 People deny, freak out and lash out over debt. After they work through those stages, the bills are still staring them back in the face. That is when depression sets in.
People who struggle with debt are more than twice as likely to suffer from depression, according to a study by the University of Nottingham in England. Hopelessness sets in, as does low self–esteem.
It can lead to even more debt since sufferers sometimes try
to relieve their depression by treating themselves to a shopping spree or some other mental getaway. But all that does is lead to more debt, which leads to more depression and despair