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The Emotional Costs of Debt and How Counselling Can Help

Counselling for Debt in LondonDebt is a relevant subject for many of us – not only in terms of countries on the brink of financial collapse, but also our personal finances suffering. Here we take a brief look at the psychological impact of being in debt, and how counselling or group support can help.

Being financially in debt will often cause emotional distress. To see how debt can trigger emotional difficulties we need to look at the psychology of human needs. As functioning human beings, we have physical needs (food, water and shelter) and emotional needs (control/autonomy, security, intimacy, social networks, status and meaning/purpose). If these needs go unmet for extended periods of time, we become vulnerable to stress and in turn depression.

Financial debt eats away at our needs. At the very extreme, it can jeopardize our physical need for shelter. If our own home is at risk or money is not available for rent, then this places an acute stress on our emotional wellbeing. In less extreme cases, debt lowers our sense of accomplishment and status. It almost certainly devalues our sense of control over our lives. It can take away choices and leave us dependent – either on borrowing further from banks, friends or family – or becoming slaves to the workplace as we put in overtime to reduce debt levels.

With our basic needs unmet, it is unsurprising that some people will buckle under the pressure of debt. The consequences vary from person to person but include low self-esteem, rising anxiety, bouts of anger, despondency, spells of depression and even suicidal intentions as an imagined way out of debt.

Once worry settles in, a cycle may begin to form. As a result of feeling helpless and depressed, we may think there is little point in tackling the situation. We might spend and borrow more, which only serves to fuel our depressive state. This vicious cycle is hard to break, but with determination and a thought-out plan, it can be done.

The starting point for rebuilding emotional wellbeing is to change how we see our situation. It is useful to see that we are much more than a person in debt – we are certainly not defective or a bad person because we have accrued large debts. It can be helpful to reflect on your positive attributes and life achievements, however small or large – such as successes at work, social abilities, being a parent, contributing to the community or completing a course. This change in mental attitude should give you a platform on which to devise a debt-management strategy.

Once your debt-management strategy is in place, try to examine other areas in life where your needs are not being met – for example at work, in relationships, social skills – and explore ways in which you can work to becoming more fulfilled than at present. If you feel that you have landed in debt as a result of compulsive spending traits and if you are receptive to individual counselling, it can be extremely helpful in helping with breaking the vicious cycle. Equally group support can be beneficial such as a network like Debtors Anonymous.

Many individuals regain self-esteem, restore life purpose, and banish depression as a result of effectively handling their debt, be it through debt counselling or a group support network for debt.

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    Dr. Sheri Jacobson


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