3 MIN READ | Mental Health

What To Do When Debt Ruins Your Mental Health

Wendy Whitehead

Cite This
Wendy Whitehead, (2019, January 29). What To Do When Debt Ruins Your Mental Health. Psychreg on Mental Health. https://www.psychreg.org/debt-mental-health/
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Certainly a lawyer could help prove how excessive debt in a system which has gone awry has caused undue mental distress on his client. But a lawyer who could win that case would be much too expensive for the poor soul suffering from debt. It’s a painful catch-22, and one that can seem all-encompassing; but there is ‘light at the end of the tunnel’, as the saying goes.

When your debt has caused you mental distress or anguish, it’s important to overcome that. The only thing you really have control over is how you react to something. The problem with debt is that is becomes so overwhelming, people can implode mentally, soon having no ability to act whatever. They see the problem as so big, they sort of ‘check out’.

There are many expressions of mental distress which debt may manifest, but for almost all of them, one of the best things you can do is take that first step. The end of a mountain trek spanning many miles starts with a single step up the hillside. 

Doing something to help your situation can be key in assuaging mental distress – still, you want to either start by doing something you’re skilled at, or which has an outcome over which you have some control. 

Debt consolidation tactics

If you have multiple debts, you’re going to have multiple rates of interest; some of them exorbitantly high. Consolidated options reduce associated expense. If you had four debts into which you paid, and each of them averaged 4% interest, consolidating that into a single loan at 3% interest would end up saving you extensively over time, allowing you to free up resources and pay off debts quicker.

This site offers some key solutions when it comes to working on debt consolidation. This is a great first step to help you overcome mental distress pertaining to debt; and if you have multiple debts, this one step can virtually guarantee savings without you having to earn more money, work differently, or change your lifestyle.

Now certainly, paying more money into debts to get rid of them quicker makes sense, but this may be one reason you have mental distress: they keep getting bigger, you’ve got to pay them off, and you have no way of making more money. In such situations, consolidation is a great step.

Examining your budget and cutting out what’s expendable

Everybody spends more than they need to on things they don’t need. Even the homeless man is putting his money toward substances which just exacerbate the condition. To get out of debt, you must identify areas of spending that are unnecessary, and eliminate them. If you’re eating out when you can cook at home, you’re adding a specific percentage to food expenses that’s unnecessary.

If you spend £100 a week on groceries, that amount could feed you and a family each day – provided you’re careful to buy selectively and prepare. That’s only £400 a month. Now if you eat out every night at a minimum of £40 per night for the family, that’s £1,240 in a 31-day month. £100 a week is £5,200 a year; £40 a night on fast food is £14,600.

That’s almost 74% higher than the home-prepared option. Consider that if you’re really frugal, you can eat for £50 a week as a family, and healthy. Rice, beans, frozen meats, frozen vegetable, supplementation. Such options can decimate your expenses. So go over your spending and find what you’re essentially wasting money on. Quit that, put the savings toward debt.

Seeking new means of income and downsizing

Lastly, find new sources of income. Millionaires, on average, have between three and five separate revenue streams. They need not start large. If you’ve got five revenue streams that each bring £500 a month, and they all grow at 5% a year, that means you’ve got compound increase on £30k every year, provided you can keep growing.

The first year is £1,500, £1,575 in the next, then £1653.75, £1,736.44, then £1,823.25. Invest your 5% increase annually, and initiate a sixth revenue stream. The point is, beyond cutting unnecessary costs and consolidation, you need to find new ways of bringing in money as well.

Downsizing can also do this. If you’re paying £1k in rent or a mortgage monthly, you can cut that out by either selling the property and getting a new apartment, or getting a smaller apartment. Whatever works you should do, because if you’re not mentally able to run the race, you won’t reach the finish line. Consider your situation, and what to do to better it.


Jason Smith did his degree in psychology at the University of Edinburgh.  He has an ongoing interest in mental health and well-being. 


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