The Surprising Correlation Between Debt Problems and Mental Health
Thu, April 22, 2021

The Surprising Correlation Between Debt Problems and Mental Health

 

Money and mental health are often interconnected, said Mind, a platform for promoting better mental health. Poor mental health can make managing money more difficult and worrying about your finances can deteriorate your mental health. For example, your income may be affected if you cannot work or when spending gives you a temporary high to make yourself feel better.

Other examples of money and mental health links are forcing yourself to work in a job you hate to pay your bills or debt or feeling anxious when doing things like opening envelopes or going to the bank. But how exactly does debt affect the mind? 

The Relationship Between Money and Mental Health

86% of 5,500 participants who participated in a survey by charity Money and Mental Heath said their financial situation worsened their mental health problems. Meanwhile, 72% said their mental health problems had made their financial situation worse. More than half of respondents had fallen behind their bills a year prior. When asked to cite the main reasons, respondents said mental health issues (67%), difficulties managing money (60%), living on a low income (55%), and job loss/drop in wages or benefits (36%).

The respondents also reported changes in their spending behaviors and ability to make intelligent financial decisions during bouts of poor mental health. During those periods, the respondents said they spent more than usual (93%), found it harder to make financial decisions (92%), and put off paying bills (74%). They also avoided dealing with creditors (71%) and took out a load they would not otherwise have taken out (59%).

Money and Mental Health presented new statistics about debt and mental health based on analysis of the 2014 Adult Psychiatric Morbidity Survey (APMS), wrote Merlyn Holkar. The charity found that 18% of people with mental health issues are in problem deft compared to those without mental health problems (5%). This showed that people with mental health issues were three and a half times as likely to be in problem debt than those without. 46% of people in problem debt also had mental health issues, compared to 17% of people who are free from problem debt.

The likelihood that an individual has a mental health issue increases with the number of problem debts. Hence, 45% of people with one problem debt have a mental health issue, increasing to 50% of people with two or more problem debts. Money and Mental Health also analyzed the correlation between the severity of symptoms of common mental health disorders and problem debt. The revised Clinical Interview Schedule (CIS-R) is a screening tool used to determine common mental disorders such as depression and anxiety that affect 17% of the population at any time.

69% of individuals scored fewer than six points, which was below the threshold for a mental health problem. However, a score of 12 or more showed that symptoms would likely amount to a common mental health problem and require to be diagnosed, while a score of 18 or more meant a severe disorder.

The strength of common symptoms of a mental health disorder is strongly correlated with the prevalence of problem debt. 4% of people with the lowest levels of symptoms were in problem debt, which increased for every band of symptoms scores. In fact, 22% of people with severe symptoms of common mental disorders were in problem debt.

Alarmingly, 13% (420,000) of people in problem debt thought about suicide in the last year, according to another report by Nikki Bond and Holkar of Money and Mental Health. 3% of those in problem debt attempted suicide in the past year, compared to about 0.8% of those not in debt. The findings showed a strong link between suicide and problem debt.  

 

 

How Do People Get Into Debt?

People do not find themselves in debt for living an ostentatious lifestyle or using credit cards and store cards, noted UK-based charity Mental Health Foundation. However, the most common triggers for debt problems are unemployment and redundancy, which can happen to anyone regardless of their attitude towards money.

Whether you have been laid off from work, separated from your partner, or have poor mental or physical health, such changes can cause you to struggle to pay your bills and bills. Adjusting to long term or short term financial changes—whether those changes are long term or short term—can be challenging.  

 

 

How Does Mental Health Affect One’s Finances?

You are more susceptible to debt problems if you are diagnosed with mental health conditions like bipolar and depression. A lack of energy can lead to difficulties in managing money or prompt you to make unwise or rash decisions. The latter entails expenses you can’t actually afford. In severe cases, being admitted into the hospital or taking time off work can prevent you from paying your bills on time.   

According to the Royal College of Psychiatrists, a professional body, being in debt can make you feel that everything is out of control and there is nothing you (or anyone) can do about it. You will also feel hopeless or embarrassed to talk to anyone about your debt problems. 

Edward, who is dependent on Disability Allowance as a source of income, was thrown into debt because a form was misplaced when he renewed the claim. He worried about his bills or whether he could replace anything if it broke. He could not even go out and treat himself as he did not know whether the claim would be renewed. It took over a year for everything to work out.

 

 

How Can People Reach Out for Help?

It is best to ask yourself if you feel anxious when thinking about how you will manage your debts. Ask yourself if you avoid answering phone calls from unknown numbers or ignore letters from creditors. To get help, consider reaching out to an adviser who is trained in working with individuals with mental health problems. An advisor can help you sort which debt to prioritize, as well as how you can increase your income and minimize your expenses. They can also help you negotiate with creditors or provide other sources of help or options.  

Poor mental health or drastic life changes may throw people in debt. Debt is not necessarily caused by having a lavish lifestyle or using credit cards. A person may feel ashamed to reach out for help, but a reliable and trustworthy advisor can help them sort out debts or make a budget.