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Sick and Mired: Are Your Debts Making You Crazy?

What to do if your finances are taking a toll on your health.

Credit: Alamy
Credit: Alamy
Written by by Michele Lerner, Daily Finance

Are your financial worries giving you a headache? Be careful, or that could be just the beginning of bigger health issues that are being tied to out-of-control debt problems.

Two studies published earlier this year explored the relationship between debt and physical and mental ailments, and found some strong associations between the two.

The first study was done by researchers at the University of Southampton and Kingston University in the United Kingdom. They reviewed previous studies that showed a connection between health problems and debt, compiled data on 34,000 participants from all the studies and concluded that people in debt were more than three times more likely to have a mental health problem than those who were not in debt.

Fewer than 9 percent of those in the study with no mental health problems were in debt, compared to more than 25 percent of participants who were in debt and had a mental health problem. The study results also show that those in debt are more likely to suffer from depression, drug dependence, and psychosis. In addition, the results suggest that people who commit suicide are more likely to be in debt.

Which Came First, the Debt or the Disease?

The study can't determine, however, whether the debt problems helped give rise to the mental health issues or if the mental health problems led to the financial woes.

Researchers at Northwestern University found that debt problems among young adults are associated with higher levels of stress and depression, and even higher blood pressure. The researchers point out that the associations between debt and health problems remained significant, even when they controlled for prior socioeconomic status, physical and mental health issues and other demographic factors. 

The Northwestern study involved 8,400 adults between the ages of 24 and 32 and found that those with higher levels of debt had an 11.7 percent increase in perceived stress, 13.2 percent increase in depressive symptoms, and clinically significant 1.3 percent increase in diastolic blood pressure. Higher blood pressure is linked to greater risks of hypertension and stroke.

Debt Reduction Strategies

If you're concerned about your health issues, you should consult a health care professional; but if you want to reduce your stress about money problems, you can tackle your debt on your own or with the help of a credit counselor. You can find a nonprofit credit counselor in your area through the National Foundation for Credit Counseling if you want professional advice on budgeting and to see if you need a debt management program to handle your bills.

You can also start tackling your debt on your own with the "snowball plan,"which is recommended by personal finance expert Dave Ramsey among many others. Start by making a list of all your debts (not including your mortgage), including the minimum payments and the interest rates for each. Then develop a budget to determine the maximum amount you can devote each month to debt reduction. Tackle the lowest balance first, paying the minimum on all other debts and directing everything else you can manage to that one debt until it's gone. Then pay off your second lowest balance in the same way until you've eliminated them all.

Some other debt pay-down methods espoused by experts like Jean Chatzky advise people to concentrate their fiscal firepower on the debt with the highest interest rate first, but Ramsey says the psychological boost of completely eliminating that first balance quickly, and then others in relatively rapid succession, helps people stick to the plan.

Whichever method you choose, what matters most is that you stick to the plan and don't take on new debt.

Michele Lerner is a Motley Fool contributing writer.

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