The Psychological Consequences of Debt Troubles

Debt Troubles
5 min read

Psychologists have determined why many human beings experience a euphoric sensation when shopping. A chemical called dopamine is released into the brain, in anticipation of the purchase, which triggers a pleasure response.

However, this can be addictive and cause people to overextend their finances in pursuit of that sensation. That’s when the psychological consequences of debt troubles can manifest themselves.

Debt, Financial Stress, and Mental Health

People often say money that is the root of all evil. However, what they don’t say is that the lack of money is what really leads to problems. A 2022 Bankrate study found that 42% of the people surveyed said debt troubles were impacting their mental health in a negative fashion. The effects cited included depression, anxiety, resentment, denial, and stress. Anger and frustration, regret, shame, embarrassment, and fear were also listed.

Depression and Anxiety

A state of constant worry over how to meet financial obligations can be extremely debilitating. This can lead to bouts of depression, especially when a solution to the problem isn’t readily apparent. In fact, people struggling to pay off financial obligations are twice as likely to be depressed and anxious than people whose finances are on solid footing.


Debt, mixed with a marriage or a domestic partnership, can foment resentment within the relationship. This is particularly true in situations in which two people have disparate attitudes about saving and spending. Resentment can also be directed toward employers, extended family, friends and even one’s self. Debt and blame often go hand in hand.


To protect itself from unpleasant situations, the human brain can block them out completely. The problem with this when it comes to debt is that the behavior only serves to make the problem more acute. Debts don’t go away just because they’re ignored. In fact, they get bigger. This is borne out in many testimonials found at, where people tell the stories of how debt affected their lives.


The American Psychological Association found that 64% of graduate students with outstanding loans have trouble functioning optimally because of debt worries. Moreover, this stress can spill over into what can normally be pleasurable experiences, turning them into negative. Stress over money problems can make it difficult to enjoy a night out with friends or any other activity that involves spending money.

Anger and Frustration

Debt brought on by situations beyond our control can make us angry and frustrated. Consider a situation in which a person finally paid off their car, only to get into an accident a few days later and have to take on a new loan. Unanticipated medical bills can trigger a similar response. How often have we heard people say, “Just when I was about to get a leg up on my money problems, this s*** happens — unbelievable!”


That new pair of shoes that seemed like such a good idea when you were in the store, or that new car you felt like you absolutely had to have, can be a source of regret when the bills come due.

Shame and Embarrassment

Most of us are taught from a very young age that paying our debts is the honorable thing to do — and for good reason. After all, the economy would be absolutely decimated if everyone suddenly decided to stop paying debts.

As a result, finding yourself in a situation in which you can’t meet your financial obligations can be shameful. What’s more, to avoid that embarrassment, some people will pile on even more debt to give others the impression that all is well —especially when it is not.


Carrying an overwhelming debt burden, with no clear path toward eradicating it, can be a frightening situation. After all, it’s accompanied by a host of “what-ifs.” What if you lose your job, what if you get sick and can’t earn, what if your car breaks down, what if you lose your home? Thoughts such as these swirling through your head can crowd out all others, making finding a solution even more difficult.

Yes, the psychological consequences of debt troubles absolutely can have a detrimental effect on the mental health of the indebted. The good news is that as bad as things might seem, people always have options. Yes, those options often involve choosing the least painful of several problematic paths forward. However, patience, diligence, and a willingness to sacrifice can help solve all debt problems.

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