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Can Debt Cause Depression?

Most of us can remember a time when looking at our credit card bill or student loan balance caused us some stress or disappointment—maybe even recently. But could those negative feelings amount to something more?

The short answer is yes. Financial strain is associated with numerous negative health impacts—both physical and mental. The long answer is a bit more complicated.


The relationship between debt and health

Studies repeatedly show that individuals with higher debt experience increased health issues, including:

  • Depression
  • Anxiety
  • Suicide
  • Psychosis
  • Substance abuse
  • High blood pressure
  • Physical impairment

If you think it takes years of financial strain for those health impacts to surface, a study from Northwestern University proves you wrong.

Researchers showed, perhaps not surprisingly, that young adults with higher debt levels exhibit greater stress and depression. But the study also revealed that higher debt correlates with higher blood pressure for these indebted subjects—a 1.3% increase over their more financially secure peers.

To put that into perspective: a 2% increase in blood pressure is associated with a 15% higher risk of stroke.

So you’re getting a pretty clear picture here. Debt = bad.

But a big question still remains ...

Is debt the cause or the symptom?

Yes, debt can make you feel pretty bummed out. But can mental health issues, such as depression, contribute to debt? It's a classic chicken-or-egg question. 

In a recent review of 65 previous studies, published in Clinical Psychology Review, researchers showed that people who have debt are over three times as likely to have a mental health problem, such as depression or drug dependence, compared with those without debt. 

But is debt the cause or the symptom? Or maybe a little bit of both?

As lead researcher Dr. Thomas Richardson says, causation is still in question. “It might be that debt leads to worse mental health due to the stress it causes. It may also be that those with mental health problems are more prone to debt because of other factors, such as erratic employment. Equally, it might be that the relationship works both ways. For example, people who are depressed may struggle to cope financially and get into debt, which then sends them deeper into depression.”

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What to do about debt and depression

So why does it matter whether debt causes mental health problems or mental health problems cause debt?

The cause may not if you’re in the thick of it, struggling under the weight of a heavy debt load and the cloud of depression. You just want to feel better.

But understanding that depression may be a culprit (and not just the result) of increased debt could help you get a handle on how you got where you are—and how best to remedy the situation.

If you are struggling with debt and are experiencing depression or other mental health issues, take a two-pronged approach.

  1. Talk to someone about your mental health—a friend, a therapist, or a family member.
  2. Take immediate steps to get your debt under control.

If you’re battling credit card debt, transfer your debt to a lower interest card.

If you have student loans, consider refinancing them for a lower interest rate. Read up on options for reducing your monthly payments.

The research is absolutely clear about one thing: individuals with significant debt are more likely to have negative health impacts than those without it.

You can’t get rid of your debt overnight, but taking positive action, like finding out how to lower your monthly payments, can help combat the financial strain.

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