How To Manage Your Mental Health While Trying To Get Out Of Debt

Medically reviewed by Nikki Ciletti, M.Ed, LPC
Updated October 16, 2024by BetterHelp Editorial Team

Debt can lead to stress and may have a negative impact on a person’s mental health. Mental health can also have a negative impact on a person’s finances. In this article, we’ll explore how debt and mental health are related and outline tips for managing mental health while following a plan to save money and get out of debt.

A woman in a striped shirt sits at the kitchen table and looks at the laptop open infront of her with a worried expression while holding a cup of coffee.
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Stressed about unmanageable debt?

How does debt relate to mental health?

Research shows that struggling to manage debt can negatively impact a person's mental health. People who believe their debt is difficult to manage tend to be more likely to experience anxiety, depression, and other mental health concerns compared to people who have no debt or easily manageable debt. 

The more unmanageable a person believes their debt is, the more likely they may be to experience anxiety or depression. Having more debt also appears to induce feelings of guilt and shame.

Certain types of debt may contribute to mental health concerns more than others. For example, one study found that consumer credit debt and unsecured debt typically have a stronger association with depression than other forms of debt, like mortgages. It seems that the more financial stress a person's debt causes, the more likely their mental health is to be negatively affected.

Tips for how to manage your mental health while trying to get out of debt

There are many steps someone can take to protect and maintain their mental health while managing debt.

Find a path out of debt

Developing a plan for getting out of debt is the first step in managing mental health while having financial difficulty. A plan allows someone experiencing debt to see that it is possible to pay off the debt and achieve financial freedom.

Many credit counseling service agencies are available to help people create budgets and develop plans for getting out of debt. The best credit counseling services are likely those provided for free or at a very low cost by non-profit organizations. It can be important to be aware of financial advice services, courses, or coaching offered at high prices by for-profit companies. In general, it’s best to avoid spending even more money and falling further into debt.

Engage in free sources of self-care

While mainstream media may like to portray self-care as something special or expensive, like a manicure, glass of wine, or luxury vacation, true self-care can be done for free. Self-care generally involves making healthy choices that benefit your physical and mental well-being. Self-care can help a person manage all types of stress, including financial stress. Free forms of self-care can include the following:

  • Prioritizing nutritious meals and maintaining a consistent eating schedule each day
  • Going to bed early enough to obtain adequate sleep each night
  • Making daily movement a priority
  • Spending time in nature
  • Connecting with loved ones or a pet regularly
A woman in a white shirt sits at a table and holds her head in her hand while looking at the laptop open infront of her with a worried expression.
Getty/Daniel de la Hoz

Find free ways to enjoy yourself

If debt is a major concern for you, it might begin to seem like your sole focus. If you were previously accustomed to only having fun by spending money on expensive events, your leisure activities could be curtailed by your new budget as you work to pay down debt. However, that doesn't mean you can't still have fun. 

While updated evidence may be needed, older studies suggest that leisure activities tend to be associated with improved well-being, so taking time to relax and enjoy yourself can help you manage your mental health as you pay off debt. Free leisure activities could include taking a walk through a forest preserve, meeting a friend in a park to chat, enjoying a picnic with friends, reading books and enjoying other media from the library, attending city or county-sponsored events and activities, and visiting museums on free days.

Explore forms of social support

Debt is something many people keep secret, and it often brings about feelings of shame and embarrassment. Opening up may dissipate some of those negative feelings and bring about acceptance. Connecting with people who have similar experiences can also help you feel less alone. Debtors Anonymous may be one option for social support that is available to people struggling with debt. Debtors Anonymous meetings are generally free to attend, and they’re often available both online and in person.

Spenders Anonymous is a similar organization to Debtors Anonymous, though its focus is specifically on overspending. Both groups are largely based on the 12-step model used by Alcoholics Anonymous with the principles tweaked to apply to money management rather than substance use.

Sometimes, local churches, non-profits, and governmental organizations also offer financial education and support groups. These may be in-person courses, workshops, meet-ups, or other events that allow participants to learn more about money management while receiving support from others who are also in debt or who have gotten out of debt.

Identify mental health challenges contributing to debt

Most people who experience debt haven't incurred it because of mental illness. That said, there are some disorders that may cause a person to spend impulsively or compulsively. For example, attention-deficit/hyperactivity disorder (ADHD) and bipolar disorder can both lead to impulsive spending. Obsessive-compulsive disorder (OCD) may lead to compulsive spending for some individuals.

In general, spending money unnecessarily must stop if a person wants to successfully get out of debt. For this reason, honestly assessing one's spending and mental health patterns may identify negative cycles. If you suspect a mental illness could be playing a role in your spending, seeking professional support may help you break the cycle of overspending and adhere to a budget.

A man in a white button down shirt sits looks stressed whileat his desk at work and presses his fingers to his temples as he closes his eyes.
Getty/Liubomyr Vorona
Stressed about unmanageable debt?

Affordable therapy for debt-related stress 

People struggling with stress related to debt payoff and money management may want to consider therapy. One option may be to look for providers in your area who use sliding-scale fees, meaning that the amount you pay is dependent on your income. 

Remote therapy could be a particularly attractive option because it allows a person to receive the benefits of therapy without having to spend time or money traveling to a therapist's office. Remote therapy can take place at a person's home or wherever they feel comfortable and have an internet connection. BetterHelp is a remote therapy platform that many people find to be more affordable than traditional therapy options.

One study found that an online form of cognitive behavioral therapy (CBT) designed to help with stress related to financial difficulties was largely successful. People who tried the online CBT program typically experienced reduced depression and anxiety symptoms. The study authors concluded that the online CBT program improved mental health in those stressed about finances. Although this study involved a specific program, it used tools common to many forms of CBT treatment, suggesting that cognitive behavioral therapy, in general, may produce similar results.

Takeaway

Financial stress surrounding debt can have a negative impact on a person's mental health. Still, people struggling with debt can find ways to take care of their well-being. For example, they can develop a debt management plan that gives them hope. They can also engage in free forms of self-care and fun activities to reduce their stress and improve well-being. Finally, support groups and remote therapy can both provide free or affordable ways of maintaining good mental health despite debt-related stressors.
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