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    The Emotional Effects of Debt

    Posted by Debt Rescue on Mar 20, 2020 2:00:00 PM

    Financial stress, as defined by the Australian Government’s Department of Education, Skills and Employment, is having difficulty meeting basic financial commitments due to a shortage of money. Debt may start with just dollars and cents, but it can ultimately end up having an adverse impact on your health and mental wellbeing. Even just thinking about the prospect of financial insecurity can cause stress, anxiety fear and panic.

    If you have unmanageable debt, it’s important to understand the emotional effects it can have on your health and identify ways to reduce debt stress and find relief.

    How Debt Can Impact Your Mental Health


    According to the Financial Resilience in Australia survey 2018, 11% of the adult population in Australia (around 2.1 million people over 18 years old) have experienced severe or high financial stress. Stress affects everyone differently, but symptoms can include:

    • Not being able to sleep,
    • Feeling withdrawn from friends, family and loved ones,
    • Underperforming at work and easily losing focus on tasks, and
    • Physical symptoms such as headaches or nausea.



    The National Australia Bank (NAB)’s Consumer Anxiety Index Survey 2019 found that many Australians have increased anxiety over the cost of living, retirement, providing for their family’s future, raising $2,000 for a financial emergency and medical and healthcare costs.

    Feelings of fear and panic can arise from triggers such as feeling overwhelmed, worrying constantly about debt and believing there is no light at the end of the tunnel.


    Depending on the level of debt and your capability to resolve the issue, the impact debt can have on your mental health may last for years. You may be stuck in a bad debt cycle, causing depression. Experiencing depression can lead to even more debt, as you may go on shopping sprees to alleviate the depressive state.  If you or a loved one is struggling with debt and are experiencing depression or other mental health issues, it’s vital to:


    Ignoring your debt problem leads to more debt as interest charges and late fees pile up – because you’re denying they exist. Unfortunately, reality always sets in and soon enough, you’ll need to deal with your debt problems.  Symptoms of debt denial include:

    • Underestimating how much debt you owe,
    • Avoiding answering the phone for fear of debt collectors,
    • Only paying the minimum amount on bills,
    • Continuously applying for new credit cards, and
    • Telling yourself debt is normal and everyone is in the same situation.

    Ways to Reduce Debt Stress

    1. Face Your Debt Problem Head-On

    Start by reflecting on your behavior around money. Create a budget and find out where you can improve on your spending. Facing the shame of your debt can help alleviate the stress of it.

    2. Seek Financial Support

    It’s best to talk to your creditors about financial hardship as soon as possible. They may be able to assist you with organising a payment plan or put a short moratorium on your debts, allowing you to get your finances in order.

    The National Debt Helpline also offers a free financial counselling service. Talking to a financial counsellor can help you:

    • Get a clear picture of your financial situation,
    • Explain your debt relief options,
    • Can help negotiate with your creditors, and
    • Listen and provide much needed support.

    3. Take Pride in Your Progress

    Sharing the progress you make towards eliminating your debt with loved ones can help you feel supported. This can decreases your sense of isolation around being in debt and combat debt stress to keep you accountable and on track towards your financial goals.

    Relieve Your Debt Stress Today

    If you’re feeling stressed about debt, it’s important to remember you’re not alone. Debt can happen to anyone at any time and it’s better to seek help now to get on top of your financial stress quickly, rather than waiting for it to get worse and have it negatively impact your mental health.

    Get in touch with Debt Rescue today on 1800 560 568 for a free 30-minute consultation. Our friendly, professional team have years of experience helping Australians get out of debt, once and for all. We’ll take the time to assess your financial situation and recommend the best debt relief solution for your needs.

    Topics: Debt Relief