The Impact of Debt on Mental Health

January is a characteristically tough month on both your finances and mental health.

You spend the Christmas season buying gifts for family and friends but once January sets in there’s the creeping realisation that perhaps your finances aren’t in the greatest shape.

Debt is a serious concern for many UK consumers, but for those who with mental health problems, the impact of debt is even greater.

A survey by Money and Mental Health found that one in four adults in the UK with a mental health problem also has problem debt. And 72 per cent of respondents said that their mental health problems had made their financial situation worse.

As mental wellbeing and money impact each other, it’s important to keep both in good health. We take a look at how you can look after your finances and mental health throughout the year.

Managing Debt

As the bills start landing in January it leaves you with one big question; how are you going to pay for it all?

The Financial Conduct Authority’s report suggests that 13 per cent of Brits have no savings at all with the cost of Christmas falling heavily on their credit cards or bank overdraft account.

Another survey found that nearly a third of people who took out debt to pay for Christmas 2017, took up to seven months to pay it off.

The Nationwide Building Society said that following Christmas 2017, more than a third of people (36 per cent) were left with an average £426 of debt.

On average people took two and a half months to pay it off, although for 32 percent it took seven months.

Take Control of Your Finances

Kimberley Kaddra is one of our experience paralegals. She advised that despite the Christmas period being over, many people are still dealing with the financial hangover and how it helps to plan ahead.

“Christmas can be a very stressful time of the year for many people with money being limited and having a lot of people to buy presents for,” she said.

“For many people, this may mean that they faced the difficult decision as to whether to rely on credit to help finance the Christmas period.”

“With Christmas now out of sight, now is potentially the perfect time to take control of your money. With this in mind, and to avoid, failing into a financial struggle after the Christmas period, it is important that you have a realistic spending budget in mind.

“The key is to plan ahead and know how much you’ll be spending on average to avoid failing into the dreaded financial pitfall. This is to ensure that you start the New Year with no debt and a good future credit rating.”

The Link between Debt and Wellbeing

The link between debt, anxiety and mental health are well-known. Debt can effect an individual’s health in many ways including depression, high blood pressure, muscle tension and difficulty sleeping.

For some people, the festive season is a source of emotional distress. Whether its debt, family arguments, bereavement or coping with illness, it all adds up and to detriment to your wellbeing.

There are a number of ways you can boost your mood and help you better cope with life’s chaos and gain some control.

Mental Health charity, Mind, advises that it can help to try and notice when your mood and behaviour start to change, so you can start to think about what you can do to help yourself. This can help prevent money problems getting worse.

Your mental health and physical health are closely linked, so taking up a sport or a new exercise can help you feel better. Money worries can make you feel stressed and keep you awake at night, with credit card bills weighing heavily on your mind.

Tackle this by taking some time out of your day to confront your debt and how you can overcome it. This will hopefully help you gain control of overwhelming feelings related to money worries that keep you awake.

Seek Help and Be Honest

“There are many free debt management companies, such as the Citizen Advice Bureau and Step Change, which offer and provide assistance with putting together a realistic and affordable spending budget for you based on the information you provide them,” Kimberley advised.

“It is therefore imperative that you are open and honest when discussing your financial position to ensure that you get the best possible advice.”

If you are struggling with your finances or concerned about debt issues, then don’t hesitate to reach out for help. For expert debt advice, contact Step Change on 0800 138 1111 or Citizens Advice on 03444 111 444.

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