The Impacts of Debt

Debt: noun\’det\

  • An amount of money that you owe to a person, a bank, a company, etc.
  • The state of owing money to someone or something.
  • The fact that you have been influenced or helped by someone or something.

When we hear that word – debt – most of us think of the first definition and cringe. It is an uncomfortable feeling knowing that we owe a given sum of money to a person, a bank, or a company. Unfortunately, very few of us are able to get through life without debt touching our lives, particularly as younger adults, when it is nearly impossible not to accrue some debt in pursuit of higher education, an automobile, or a home. Debt – particularly the more, and longer, that is owed – is often a stressor; a stimulus that causes stress.

Stress: noun \ˈstres\

  • Strain felt by someone. The mental, emotional, or physical strain caused, e.g. by anxiety or overwork. It may cause such symptoms as raised blood pressure or depression.Debt Stress
  • Cause of strain: something that causes stress.
  • Special importance: special emphasis, importance, or significance attached to something.

Every person that has dealt with debt, and I am guessing that is most of us, understands the tension, the anxiety that often comes with it. The mental oppression, that sinking feeling when the monthly payment comes due and there isn’t enough money to make a payment…or make the payment in full. Worse yet, thinking about the number of years it will take to satisfy the debt!

It should not come as a surprise that there is a psychological impact to carrying debt. Recently, a study by the Feinberg School of Medicine at Northwestern University concluded that there are physical impacts as well. Among the findings is that a higher debt-to-asset ratio is associated with higher perceived stress and depression, worse self-reported general health; and higher diastolic blood pressure. Additionally, individuals with greater debt were found to have a 1.3 percent increase (relative to the mean) in diastolic blood pressure.

What does that mean? Debt, which obviously negatively impacts your fiscal well-being, also negatively impacts your mental and physical well-being. On the flip side, the opposite must also be true…ridding yourself of debt improves your fiscal, physical and mental well-being.

What has been your experience with debt?  Is it currently under control or is it something you have yet to corral?

Blogger-in-Chief here at RetirementSavvy and author of Sin City Greed, Cream City Hustle and RENDEZVOUS WITH RETIREMENT: A Guide to Getting Fiscally Fit.


  1. Oh I could write a book about debt stress.

    Interesting how in the US you borrow against your 401K. In Canada we borrow against our homes. Neither is good, but the key is to get them paid off as quickly as possible. For me it will be about 7 years to pay off our last refinancing. Ugh.

    • Unfortunately, here in the U.S. people often borrow against their 401(k) and home…after maxing out credit cards. It is a trap snares fare too many people!

  2. A Google+ reader chimes in with…

    “Eliminate debt in the best possible way and stabilize your finances for a healthy road to retirement.”

  3. A Google+ reader observes that…

    “The trick is to manage debt to a level you are comfortable with.”

    Agreed that an individual should strive to actively ‘manage’ any debt they have, thereby reducing stress levels. Ultimately though, the objective should be to eliminate debt and free up more money for savings/investments.

  4. Great article. What a rollercoaster ride debt can be. I know what emotional turmoil it can bring to a relationship. Way to break it down for us James. Good job taking an ideal and running with it. Congrats.

    • Thanks for the suggested topic. The article seems to have resonated with quite a few people. I know that I have been on that debt roller coaster – I assume like many of the SavvyReaders – and it can be quite a mentally, physically, and fiscally taxing experience.

  5. How true that is SavvyJames. I know that when I went through a divorce, I continued to live as though I still had the money that we had earned together. I ran up my credit cards to the max. It was very stressful and I was worried that I wasn’t going to be able to make the payments. I lived in terror until the next paycheck came. It was a terrible feeling. Luckily, I talked to a really Savvy fellow and he helped me get my finances under control. I ended up having to borrow against my 401K, but it was a HUGE relief to get that off of my plate. I am still paying it back, but I know that there is an end in the not too distant future. A hard lesson learned.

    I just want to say what a great website this is. I enjoy reading your posts. Keep them coming!

    • Divorce and debt, a vicious tag team! Like you, I have had to face both. Borrowing against a 401(k) is a last resort, but sometimes must be done. The keys are to pay back the loan as quickly as possible and change your relationship with money…never letting debt back into your life. Thanks for joining the conversation.

  6. Great post!

    Debt really is a beast, but it can be destroyed. We get out of debt with a focused plan and new habits. Saving and not spending someone else’s money.

    Thank you for the reminder . Debt is not a friend.

    • Thanks for the feedback, Edie. Great to have you join the conversation. Excellent point with regards to a focused plan – and the development of new habits – as being keys to escaping and staying free from debt. Yep, debt is only a friend in those brief moments when you first buy (with credit) that ‘new thing’ you just had to have. After the newness wears off? The euphoria is gone but that debt remains.

  7. I love that you bring to light the emotional and relational consequences of debt. Unlike a cell phone bill or car note, we cannot see or even feel the emotional impact for years into the future. The intangible is often more dangerous! Great job!!

    • Thanks for the great feedback, Taz. Your observation that impacts of debt are often intangible…hard to detect. As we often talk about on this blog, total fitness is comprised of fiscal, as well as mental, spiritual, and physical well-being. Debt eats away at each of those slowly but surely.

  8. Great post – debt is bad for your health and relationships as well as being bad for your pocket.
    Theres only one way to deal with debt, and thats to take your head out of the sand – man up – and pay it back.

    • Very well said, Mike. Debt really is an insidious beast. Often the slide into significant debt happens not at once, but over a period time; and by the time the decision is made to do something about it, it is quite the challenge.

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