Debt Isn't Just a Financial Problem. It Can Affect Your Health, Too.

There's a lot to worry about right now when it comes to your finances. Groceries cost more. Housing is expensive. Gas prices change constantly. Credit card balances are sky high, and if that wasn't enough, buy now, pay later makes it incredibly easy to turn today's purchases into another payment next month. Adding concerns about jobs and the economy, there's more than enough to keep people awake at night.

For many families, there simply isn't much breathing room.

According to the Federal Reserve's latest Survey of Household Economics and Decisionmaking, 58% of adults said price changes had made their financial situation worse. Only 41% said they always or often had money left over at the end of the month. And while 63% said they could cover a $400 emergency expense using cash or its equivalent, that means more than one-third could not.

That matters because financial stress doesn't stay in your bank account. It follows you home.

Key Takeaways

• Financial strain has been linked to measurable changes in blood biomarkers tied to immune, nervous, and endocrine system health.
• Research has even associated worsening creditworthiness and severely delinquent debt with a higher risk of mortality.
• Financial stress affects people across every income level, not just those earning less.
• Debt often strains relationships, even when the arguing isn't explicitly about money.
• A debt management plan is not the same as a consolidation loan, and it can help you build habits that keep you out of debt for good.
• The first step toward relief is simply finding out exactly where you stand.

Financial Stress Can Affect More Than Your Finances

If you have ever been awake at 2 a.m., wondering how you are going to make the mortgage payment, which credit card to pay, or what you will do if the car breaks down, you already understand that debt can affect much more than your finances.

It can affect your sleep. It can affect your relationships. It can affect your mood and concentration. And research increasingly suggests prolonged financial stress may affect our physical health as well.

A study published in the journal Brain, Behavior and Immunity examined blood biomarkers from 4,934 adults aged 50 and older. Researchers looked at several major sources of stress, including bereavement, divorce, illness, caregiving, and financial strain. Financial strain stood out.

People reporting financial strain alone were 59% more likely four years later to fall into the study's high-risk biological profile. Researchers found that financial stress appeared to be the most detrimental of the stressors studied to the healthy interaction of the immune, nervous, and endocrine systems, although they also cautioned that additional research is needed.

Think about that for a minute. We tend to think about debt as numbers on a statement. But the stress surrounding those numbers can become part of our everyday lives.

Serious Debt Problems Have Even Been Associated With Mortality

A Federal Reserve Bank of Atlanta working paper had a sobering title: Killer Debt: The Impact of Debt on Mortality.

Researchers Laura M. Argys, Andrew I. Friedson, and M. Melinda Pitts examined credit-report information for approximately 170,000 people. Their research found that worsening creditworthiness and increases in severely delinquent debt were associated with an increased risk of mortality.

That does not mean carrying a credit card balance is going to kill you. Debt is also intertwined with employment, income, health and many other factors. But it is another reason we shouldn't dismiss serious financial distress as "just money." Your financial health is part of your overall well-being.

Financial Stress Doesn't Care How Much You Earn

One of the biggest misconceptions I hear is that financial stress is primarily a problem for people with lower incomes. After more than 30 years of talking with people struggling with debt, I can tell you that simply isn't true.

We have talked with people earning $30,000 a year, $130,000 a year, and even $500,000 a year who are struggling to make their payments. Income certainly matters, but so does what goes out.

Someone can have an excellent income and still have a large mortgage, two expensive car payments, credit cards, student loans, and other obligations consuming virtually every dollar they earn. Then something happens. The property tax bill increases. The roof needs replacing. Someone loses a job. There is an unexpected medical expense. Suddenly, a household that looked financially successful from the outside is in serious trouble. That is why having some margin in your finances matters so much.

Debt Can Affect Relationships, Too

Money problems rarely affect only one person.

When there isn't enough money, couples may start arguing about spending. One person may hide purchases. Another may become afraid to open the credit card statement. Parents worry about providing for their children. People may avoid friends because they can't afford to go out.

Sometimes, couples aren't even fighting about money on the surface. They are fighting about everything else because money has created a constant background level of stress.

Ignoring the problem usually doesn't make that stress disappear.

The Hardest Part Is Often Changing Our Behavior

Sometimes financial problems happen because life happens. A job is lost. Someone gets sick. A marriage ends. An unexpected expense wipes out the emergency fund.

But sometimes debt becomes a cycle. You pay down a credit card and then charge it back up. You use Buy Now, Pay Later because each individual payment seems manageable. You get a raise, but your spending rises with it. An unexpected bill arrives, and because there isn't any savings, it goes right back on the credit card. This is one version of the minimum payment trap that keeps so many people stuck longer than they expect.

Breaking that cycle isn't easy. I have talked with many people over the years who genuinely want to get out of debt but have a difficult time changing the behaviors that keep pulling them back into it.

I think about financial health much like other areas of our health. Most of us know we should exercise. We know smoking is bad for us. We know we should eat better. But knowing what to do and actually changing our behavior are two very different things. Money isn't much different.

Sometimes You Have to Learn to Live Without the Credit Cards

This is one of the benefits of a debt management plan that I don't think gets talked about enough. A debt management plan is not a consolidation loan.

With a consolidation loan, you borrow new money to pay off existing debts. I have talked with plenty of people considering consolidation who tell me, "Once I pay these cards off, I'm never using them again." And they mean it.

But then life happens. The car needs repairs. The furnace goes out. Christmas comes around. There is an unexpected medical bill. Or spending simply starts creeping back up.

The cards that were just paid off suddenly have available credit again. Before long, some people find themselves with a consolidation loan and new credit card balances. Now they have both. That is one of the risks of using new debt to solve old debt.

With a debt management plan, credit card accounts included in the plan are generally closed, and you begin learning how to manage your expenses without falling back on those cards.

At first, that can be uncomfortable. But over several years, you are not just paying down debt. You are learning to live without depending on credit cards to make your monthly budget work.

That is also why we encourage clients to build an emergency savings account while they are paying down debt. When the next unexpected expense happens, the goal is to have money in savings rather than immediately reaching for a credit card.

Getting out of debt is important, but learning how to stay out of debt may be even more important. Our guide to proven ways to avoid and stay out of debt walks through some of the habits that make the biggest difference.

Make Your Financial Health a Priority

You don't have to fix everything today. But you do have to start.

Sit down and figure out exactly what you owe. Look at what you actually spend each month, not what you think you spend. That can be an eye-opening experience.

Over the years, we’ve talked with people who were afraid to add up their debts because they didn't want to know the total. We have had people ask us to run the numbers again because they simply couldn't believe they owed that much. But knowing where you stand is the beginning of changing it.

Build an emergency savings account. Stop adding new debt wherever possible. Look for expenses you can reduce. Make a realistic plan to repay what you owe. A few good financial habits can make this process feel far less overwhelming.

If you can afford to repay your debts on your own, do it. If high interest rates and minimum payments are making that difficult, talk with a nonprofit credit counseling organization about whether a debt management plan could help.

If your situation is more serious, learn about all of your options. Depending on your circumstances, that might include working directly with creditors, exploring settlement options or speaking with a qualified bankruptcy attorney. Our overview of the pros and cons of credit counseling is a good place to start comparing paths forward.

The important thing is not to ignore the problem because looking at it feels overwhelming.

Your Future Self Will Thank You

Getting out of debt often requires sacrifice. Maybe you drive the car for a few more years. Maybe you don't take the vacation this year. Maybe you eat out less, cancel some subscriptions or decide something you want today isn't worth another monthly payment.

Those decisions aren't always fun. But neither is lying awake worrying about money.Financial freedom isn't just about having a better credit score or more money in the bank. It can mean removing a major source of stress from your life.

Make your finances a priority just as you would your physical health. Your future self may be very glad you did.

Bottom Line

Debt doesn't stay contained to a monthly statement. It can follow you into your sleep, your relationships, and even your physical health, and it affects people at every income level. The good news is that the first step doesn't require a perfect plan, just an honest look at where you stand. Whether that means building an emergency fund, cutting a few expenses, or talking with a nonprofit credit counselor about a debt management plan, taking that first step is what starts to loosen debt's grip on your day-to-day life.

Frequently Asked Questions About Debt and Financial Stress

‍