How Does Financial Stress Affect Your Mental Health?

How Does Financial Stress Affect Your Mental Health?

Article By: Chrissy Phelps

Nationwide, around 33% of Americans are in debt, though percentages vary significantly from state to state. In Louisiana, for instance, around 46% of adults have debts in collection, compared to only 17% of those living in Minnesota. Debt is considered the number one source of stress and it doesn’t look like the situation will be improving anytime soon. Statistics indicate that for around 20% of people, mortgages are the largest source of debt, followed by student loans. Among millennials, however, student loans are the leading source of debt with median amounts owed hovering between $10,000 and $14,000.

Graduating with debt can be a huge source of stress because it stops young people from buying a home, car, or other essentials. Often, one’s personal goals (including settling down) also need to be set aside.

Money and Mental Health

Various studies have been carried out on the subject of financial stress and mental health. In one study published in theCommunity Mental Health Journal, it was found that worrying about debt at university significantly increased the risk of mental health conditions such as depression and alcohol dependency. As noted by the study’s lead researcher, “The findings suggest a vicious cycle whereby anxiety and problem drinking exacerbate financial difficulties, which then go on to increase anxiety and alcohol intake. Interventions which tackle both difficulties at the same time are therefore most likely to be effective.”

Students often feel passive against the burden of debt, sometimes failing to understand that there are options such as consolidating existing loans so as to be able to obtain a better interest rate or even extend payment times without significantly increasing one’s loan amount. Universities should take student’s mental health seriously, providing them with both psychological and financial counseling so they can learn more about how to pay less interest, work part-time to settle debt early, and use available technology to save more efficiently.

The Link Between Financial and Mental Health Among Adults

It isn’t just students and young adults who are affected by financial stress. One recent data analysis found that a significant percentage of adults report symptoms of Posttraumatic Stress Disorder (PTSD) due to their finances. These respondents admitted to indulging in destructive behavior as a way to escape from the reality of their problems. Other researchers have concluded that depression and anxiety are three times more prevalent among people who are in debt.

Psychological Distress and Physical Illness

There is an inexorable link between our mental and physical health. One recent study published in Psychosomatic Medicine found that financial stress can contribute to inflammation by increasing levels of C-reactive protein, which is linked to heart disease. Chronic financial stress can also lead one to make poor lifestyle choices (for instance, in diet), inadvertently leading to obesity and Type 2 diabetes.

Loan consolidation, a reduced reliance on credit cards, and receiving financial advice are just three ways to fight debt, but the problem must also be dealt with from a psychological perspective. Chronic stress of all types can lead to issues like obesity, depression, and anxiety, but financial stress can be particularly difficult to deal with because solutions take time. In addition to benefiting from professional therapy, those affected should aim to reduce stress through a healthy diet, regular exercise, and the performance of stress-busting activities such as yoga, meditation, or even Tai Chi.

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