The Connection Between Debt And Stress….It’s Real

Studies show that people struggling with debt have a higher stress level than people without debt.

Among life’s major stressors, the one that’s still taboo is debt. Yet it’s something that around four in five Americans grapple with, according to a report last year from the Pew Charitable Trusts. Debt stress can take its toll, physically and mentally. Shedding debt—and even the process of paying it down—is a net-positive on your body and mind, as well as your wallet.

Stress, By The Numbers

The relationship between debt and overall stress was overlooked in research for some time. Then, in the 1990s, Paul J. Lavrakas, Ph.D., a research psychologist and research methodologist who was working at Ohio State University at the time, devised the Debt Stress Index. It used a questionnaire for consumers and measures the psychological stress of carrying debt.

It found, perhaps unsurprisingly, that with more debt came more anxiety and confirmed the link between debt and the physical ailments of the stress it causes.

Consider that in July 2009, the point when the U.S. economy was at a record low, 29 percent of people with high levels of debt stress said they suffered severe anxiety, compared with 4 percent of those with low debt stress, according to a report from the Federal Reserve Bank of San Francisco. More than a quarter of people reporting high debt stress also said they had ulcers or digestive-tract problems, while only 8 percent of their less stressed peers suffered from those symptoms.

“When you ask people, ‘has your health been impacted?’ the most frequent response is, ‘I don’t sleep well,’ or ‘I’m irritable toward other people,’” Lavrakas recalls. For some, that stress can lead to things like heart problems and weight gain.

Stress Over Time

We all deal with stressful periods in our lives, but stress tends to be most harmful when it builds up over time. This isn’t limited to debt stress. “It is not just the dramatic stressful events that exact their toll, but rather the many events of daily life that elevate and sustain activities of physiological systems and cause sleep deprivation, overeating, and other health-damaging behaviors, producing the feeling of being ‘stressed out,’” writes Bruce S. McEwen, Ph.D., a professor of neuroendocrinology at The Rockefeller University in New York. Parts of the brain that interpret and respond to stress undergo structural remodeling when placed in a state of chronic stress. “Over time, this results in wear and tear on the body, which is called ‘allostatic load.’”

So why can debt stress be more sinister than, say, relationship stress? One of the main reasons is its unpredictability.

Generally speaking, there are two types of debt: healthy and unhealthy, Lavrakas explains. An example of healthy debt could be a mortgage, because it can help improve your financial profile (for instance, making on-time payments increases your credit score, and in the end you own something). Conversely, credit card debt can be less intentional, especially when it comes from an unexpected event. “If things happen randomly in people’s lives that we have no control over, they’re the most unsettling,” Lavrakas says.

Start De-Stressing Now

The antidote is to start regaining control. And the good news is that you don’t have to pay off your debt in its entirety to lighten your debt stress. For many, just making a plan to shed debt starts to lighten the emotional burden. Break the taboo and talk to financially savvy friends or family to see what tools they use to manage their debt, such as taking out a personal loan, transferring high interest credit card debt to a lower interest credit card, or refinancing with a home equity loan. And lean on those around you for emotional encouragement and guidance as you find your way out of debt.