5 Mental Health Impacts of Financial Debt

October 10, 2021
mental health

Financial Debt Since the Beginning of the Pandemic:

Has the coronavirus pandemic caused some level of financial stress? Have you been drowning in various amounts of debt? Whether it is credit card debt or personal loan debt, the pandemic caused a lot of hardship for many Americans. Many people lost hours and jobs which made it difficult for them to pay their bills. Some people made life-changing decisions to separate from their spouse. Whatever the reason may be, falling into financial debt can cause mental health issues you may have never experienced before.

Owing serious sums to your credit cards and other debt accounts may only be business and numbers on paper. According to a study conducted by business.org, “credit card debt has increased for 62% of Americans since the pandemic began”. However, any financial situation that causes stress, pressure, and worrying about paying bills has profound mental health implications.

Things you may be experiencing include:

  • Stress, Anxiety, and Depression,
  • Isolation and Denial
  • Hopelessness.

Stress, Anxiety, and Depression

When a life-changing event happens such as losing a job or getting divorced it may also cause challenges such as financial debt. Not only are you dealing with the life-changing event, but now you are dealing with the financial stress that comes along with it. 

According to mentalhealth.org, ” Debt can make you feel anxious, especially if you don’t have support from friends or family or from your creditors”. They also mentioned that “Worrying about debt can affect your sleep. Losing out on a good night’s sleep can not only affect your mood and energy levels, it can also affect your ability to work or have good relationships with friends and family”. Everyone experiences and deals with financial debt in different ways. One person may be able to handle $20,000 of debt while another person may be thinking their $4,000 of debt is too much. 

When you are experiencing mental health implications as well as lack of sleep you tend to become more unproductive. Maybe you don’t want to get out of bed or wash the dishes in the sink. You may also not be taking care of yourself like you normally would such as lack of eating or showering. Just like a rabbit hole, it starts with one thing and leads to more. All of these mental health implications can be caused by your financial debt. 

Isolation and Denial

Other mental health implications you may be dealing with is seen as isolation and/or denial. When you become unproductive you tend to then withdraw or isolate yourself from the world and the people around you. This can also lead to denial. When you start to become isolated and in denial you start to not deal with your problems at all. Denial is one of the most common responses when dealing with financial debt.

debt.org has posed some symptoms of debt denial that you may be a victim of,

  • Underestimating how much you owe.
  • Not answering the phone when you suspect a collection agency is calling.
  • Leaving bills unopened or just stuffing them in a drawer.
  • Opening a new credit card when your old one is maxed out.
  • Telling yourself that everyone is in the same situation.

If you are experiencing any of these symptoms you should start to think about your options. Not dealing with your financial debt may cause it to get worse which makes it harder to get out of.


Sometimes when we experience the mental health implications mentioned above we tend to fall into one of the last phases which is hopelessness. Hopelessness is a common feeling when dealing with financial stress. You may be feeling like you do not have options or that this problem you are facing is never going to go away no matter what you do. We tend to feel this way because we are not educated about our options. Financial debt and stress can be a long and hard road when you do not know what to do or where to go, because you think that seeking help is only going to cost more money. While yes you may have to pay for financial help it does not always mean that it is going to be more expensive in the long run.

There is hope!

It is time to take a deep breath! The good news is that these mental health effects do not have to be forever and neither does your financial situation! Since the beginning of the pandemic more Americans are falling into financial debt. Debt is becoming more and more normal in today’s society. The feeling of stress, anxiety, depression, denial, hopelessness and so on are becoming more normal along with debt. It is okay to feel stressed or even ignore your problems for the day. Get outside and take in that fresh air. Just remember to return knowing that you always have options! Here at Roundleaf, we strive to help people like you achieve your most important financial goal! Contact us today for a free consultation if you are ready to learn about your financial freedom.

Similar Readings:

  1. How to Manage Debt – Your Self Help Guide
  2. All debt is negotiable – and here’s how that may help you
  3. Taking Charge Of Your Financial Stress


  1. https://www.business.org/finance/payment-processing/best-credit-card-processing-for-small-businesses/#Credit_Card_Stats
  2. https://www.mentalhealth.org.uk/a-to-z/d/debt-and-mental-health
  3. https://www.debt.org/advice/emotional-effects/