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.
  • 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?

James
 

James retired in 2005 after serving 21 years in the United States Army. During the latter part of his career, James' interest in personal finance was piqued based on his own experiences and observations of the way most Americans plan – or more accurately, fail to plan – for retirement and the difficulty many face in starting the process. His most valued education has been lessons learned from personal experience and through conversations with smart, savvy friends.

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