Is Your Financial Story Making You Depressed?

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In my last blog, What’s Your Financial Story? Does Money Define You? You explored your financial story. I’d like to go deeper into the connection with your financial story and depression. 

The Link Between Debt and Mental Health

Research states, personal debt is now recognized as one of the many factors associated with common mental disorders (CMD). High credit-card-debt-to-income ratios and being in default are associated with higher levels of anxiety and stress.

Evidence has shown that not all debt impacts mental health the same way. While mortgage debt itself doesn’t seem to directly affect depression, consumer debt appears to increase depressive symptoms. More critically, when people fall behind on mortgage payments, they may experience more severe depression, regardless of their other debt levels.

Depression has also been associated with suicide ideation and addiction. If you are in debt, it’s important to recognize if you are depressed. While it may seem it’s normal to feel sad or stressed about your finances, it’s vital to explore if you are experiencing depression because of your financial situation. Recognizing the link between debt and depression can help transform your relationship with money.

Equally, understanding the root of your debt is crucial. Asking yourself why you are in debt and reflecting on this question will begin breaking down your debt cycle. This process helps in connecting dots between patterns of thinking, events, or people that trigger spending.

Depression can lead to various negative outcomes, including:

  • Worsening financial situation
  • Increased stress or anxiety
  • Difficulty in making sound financial decisions
  • Maladaptive behaviors

Steps to Address Debt and Depression

Emotional Awareness and Self-Care

Make a daily practice of tracking your emotional patterns. What are your emotional triggers? Make a list of the thoughts, feelings, or situations that cause you to appease them with money. Embrace self exploration and delve deeply into what causes you pain, fear, or anger. Move in and don’t be afraid to explore how this started. This may not be fun to do, but it’s a good place to begin tearing down the wall and seeing what’s behind it. If this is too difficult to do, begin by noticing what’s there without judging, labeling, or turning away. Make a daily practice of allowing yourself to feel the discomfort or just notice it. Then monitor yourself and create an alternative plan to address the emotional triggers. 

Here are some common suggestions:

Embrace self-awareness

  • Incorporate mindfulness techniques that focus on being present in the moment. Be diligent with your practice and don’t allow yourself to be drawn into past thoughts, as this will most likely lead to feeling depressed. If you pay close attention to the present moment, you may find you are okay. It’s when you wander into the chambers of your mind that trouble begins.
  • Remember, there is always a plan you can implement for paying off debt. It will not be a quick fix, but it’s doable. You may have to adjust your plan as needed.

Listen to your body

  • Ask yourself – where in the body do I feel my finances? Then stop and pay attention. Allow yourself to feel the discomfort as much as you can. You may want to push away, ignore, or stifle. Do your best to lean in a little bit and be curious about what you are experiencing. It may be uncomfortable but it will not kill you. This is another entry into self-awareness. In doing so, you will begin to notice the cues when your body experiences the discomfort first before you have a chance to cognize it. Then feel the discomfort without the judging or labeling. Allow what’s there to rise and fall. This will begin to create space between the situation and your reaction. 

Daily walks

  • Walking is a great way to clear your mind. Create a regimen of times when you can go for a walk. You can also incorporate mindfulness by practicing presence with every step, taking different routes each day may help you remain more aware. Not only will you feel better emotionally but your body will thank you as well.

Your breath

  • Get in touch with your breath. Breathing is one of the easiest and simplest way to relax your nervous system. 
  • Learn Qigong or Tai-Chi to help you get in touch with your body and relieve stress. 

Emotional Plan

  • Make a list of your favorite activities and have it handy
  • Favorite thing to do indoors & outdoors
  • Create a music playlist specially for this
  • Name a friend you can reach out to
  • Work on your hobby. If you don’t have one, now is a good time to start one.
  • Change location, go to a different part of the house or go outside if you have been in all day.

Financial Management

Budget

You can begin by maintaining a budget. This will help you understand your spending habits and assist in making adjustments to your lifestyle. Budgets are a visual representation of your emotional triggers. Review your budget and look for patterns of spending and categories you spend the most on. But don’t stop there, go deeper. Why did you overspend that week? What was going on in your life that made you spend more? 

Debt 

Making a plan on how to address the debt as this will “reduce the debt and increase perceived control over finances. In doing so, it will positively affect your depression. 

Preparation

    • Make a list of your debts and interest rates. Make sure you include small financial obligations you owe to friends and family.
    • Transfer high interest credit cards to 0% interest credit card and stop using credit cards
      • Implement any of the following strategies
        • Snowball Effect – Motivation technique
          • Pay off the loan with the smallest balance first 
          • When it’s paid off, compile that payment with the next smallest debt payment
          • Ultimately snowballing all the payments one after the other until debt is satisfied
        • Avalanche Effect – Saving Money Strategy
          • Same as the snowball effect except the focus is on highest interest bearing debt
          • Pay off the loan with the highest interest first 
          • When it’s paid off, redirect payment to next highest interest bearing account
        • Wallethub’s Island Approach – Saving Money
          • Use one credit card for your everyday expenses and pay off the balance in full every month to avoid paying interest
          • The second credit card will carry a balance, so it’s essential to use a low bearing interest account or 0% interest account
          •  If you use 0%, pay close attention to when the 0% timeline will end, as the interest rate can be raise to high percentage, depending on your credit score
    • Recognize Your Strengths – reflect on what you are capable of addressing and accept your limitations. If financial literacy or emotional well-being is something you lack knowledge in, seek help. There are a lot of free tools on the internet to help with your finances but navigating depression may be more challenging by yourself. If possible, work with someone who can help you with both.

    Mindful Reminder

    No matter which approach you take in paying your debt off, it will take time. Diligence, patience and gentleness with yourself are essential. In due time, your financial obligation will be met. The emotional road you take is a choice. Remember to use mindful tools to help yourself along the way. Incorporating a daily walk, awareness of breath, or beginning a home meditation practice can all be helpful to ease the tension. Review How to Create Mindfulness Around Our Finances. 

    Work Accommodations

    If you find yourself missing work because of depression, work accommodations can be implemented. You are entitled to reasonable work accommodations under the Americans with Disabilities Act (ADA). Examine your work environment and what your specific needs are then seek accommodations to help you succeed in the workplace.

    Per Job Accommodation Network (JAN), here are the most common:

    • Flexible Schedule
    • Modified Break Schedule
    • Emotional Support Animal (ESA)
    • Support Person
    • Job Restructuring

    For an extended explanation on these accommodations, see Work Accommodations for Depression.

    Requesting Accommodations

    If you feel uncomfortable requesting accommodations, please read How to Ask for Reasonable Accommodations at the Workplace for guidance.

    Here’s a video on asking for reasonable accommodations.

    If you would like to speak to someone at JAN, below is their information:

    • Voice:  800-526-7234
    • TTY:   877-781-9403

    Seeking Help

    If you are depressed, anxious, or have panic attacks, find a health professional who can help you. 

    Substance Abuse and Mental Health Services Administration (SAMHSA) National can provide free referrals. They are open 24/7, 365 days a year.

    If you are experiencing suicidal thoughts and need immediate assistance call 911, otherwise, please call or text 988. If you prefer to chat online, visit 988lifeline. The services are free, confidential, and they are open 24/7 to help you navigate difficult emotions. 

    Attend a Workshop

    If you are interested in attending a live webinar on improving your relationship with your finances, please visit my events.

    Related Posts

    How to Ask for Reasonable
    Accommodations at the
    Workplace    		Understanding
    Panic Attacks    		Financial
    Anxiety
    Accommodations Were Not
    Effective – Communicating
    With Your Employer    		Work Accommodations
    for Anxiety    		Depression &
    Finances

    References