How debt affects the mental health of Gen Z, Millennials, Gen X, and Baby Boomers.

Does debt induce mental illness, or does mental illness induce debt?

Yes.

Research from the Money and Mental Health Policy Institute reveals that the following two facts coexist:

Individuals with problematic debt are considerably more likely to face mental health issues.

Individuals with mental health issues are also more likely to encounter debt troubles.

How strong is the correlation? It’s quite strong. Extremely strong. Almost half (46%) of those struggling with debt also experience a mental health issue, and individuals facing mental health challenges are three and a half times more likely to have debt difficulties than those who do not report mental health concerns, based on data from the Money and Mental Health Policy Institute survey.

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A survey by Forbes Advisor conducted in late 2023 discovered that 54% of adults in debt report feeling stressed by it, and 60% of participants indicate that their financial stress has resulted in conflicts in their relationships. Debt-related stress and accompanying mental health challenges can elevate the usage of drugs and alcohol, as well as trigger other negative behaviors such as changes in appetite, procrastination, and anxiety.

Here’s How Debt Affects Mental Health
Denial: Numerous consumers persist in compulsive spending without acknowledging their worsening financial situation. They defer addressing issues until an external event – denial of credit, foreclosure threats, legal action, or aggressive phone calls from debt collectors – compels a change. In the meantime, interest fees and late penalties accumulate.

Stress: This represents the antithesis of denial. Debt and stress are akin to conjoined twins; financial troubles on one side, pressure, and strain on the other. The most significant indicator of financial pressure? You guessed it: Credit card debt. Stress manifests in clear signs – insomnia, lack of concentration, persistent worry.

Anxiety: In this scenario, anxiety is the physical result of stress: rapid heartbeat, shortness of breath, dry mouth, headaches, and tremors. It’s stress with the wound exposed. The National Institute of Mental Health estimates that 40 million Americans experience anxiety. Financial concerns are a major trigger.

Anger: The medical field refers to this occurrence as Debt-Anger Syndrome. Victims become angry at creditors who repeatedly send them bills; angry at the mailman for delivering the bills; angry at their employers for insufficient pay; angry at their partners for not earning more; angry at their children for requiring new braces; and angry at themselves for getting into this predicament. This not only has the potential to damage relationships, but the physiological repercussions can result in migraines and heart disease. They can also diminish your immunity to infections.

Depression: Following denial and anger, a sense of hopelessness emerges alongside diminished self-esteem. This can result in accumulating further debt, as individuals often attempt to alleviate their depression through shopping sprees or other forms of temporary relief. Depression does not deter impulsive spending; in fact, it serves to encourage it. However, this cycle merely contributes to additional debt, which subsequently leads to heightened depression and despair.

At this stage, individuals are typically indifferent about whether their mental health challenges stem from debt or if their financial burdens are the origin of their psychological issues. Their primary desire is simply for the pain to cease.

Regrettably, it often concludes in the most tragic manner. Individuals with debt have a higher likelihood of committing suicide compared to those who are not facing financial hardships.

How Debt Stress Affects Different Age Groups
Debt is indiscriminately relentless, ready to impact anyone, irrespective of age, race, educational background, or personal resources. Each demographic segment, however, navigates debt and its associated difficulties in distinct manners.

For instance, younger individuals frequently embark on their adult journey burdened by overwhelming student loan debt that influences various aspects of their lives. Conversely, older individuals have amassed debt over many years of existence. Mortgages, credit cards, personal loans, and more can generate a crisis for those nearing retirement age or even for those planning for their forthcoming retirement.