Financial Health and the Sobering Statistics of Debt

I’ve seen several friends suffering with mental health issues. Much of it is caused by stress with work but, equally, I’ve noticed that a lot of it has to do with stress with money. Someone loses their job and only have savings that cover them for the shortest time. I‘ve seen several surveys that say a third to two thirds of Americans couldn’t cover an emergency expense and would need to borrow from friends, family or use their credit card. According to a 2016 GOBankingRates survey , 35 percent of all adults in the U.S. have only several hundred dollars in their savings accounts and 34 percent have zero. That is worrying, as what happens when you lose your job?

I don’t say if you lose your job, but when. This happened to me twice in my career and it’s a completely binary moment. 1, you have a job; 0, you don’t. Simple as that. You don’t have other companies you work for. You work for a company and then you don’t. Meantime, you still have mortgages to pay, bills to cover, food and transport and more. How do you survive?

Some do not. I’ve seen several people lose their job and end up crumbling under the weight of debt. Others take lower paid work, just to keep working, and then they end up having to sell assets as the new job doesn’t cover the bills like the old job. According ot experts, you need to have at least six to twelve months of income saved to cover you for if or when you lose your job.

Equally, this is why I write about money and technology all the time because, apart from relationships, money is the most important thing in our lives. It controls our lifestyles and is core to our wellbeing. If we don’t have income, we lose.

Now I know this is a little bit depressing, but it really hit home recently when a friend lost his job and is sending out begging emails to anyone he knows to get help. I helped, but hey, it’s not a nice thing to get your begging bowl out to your mates.

Therefore it is not surprising that psychologists find those who have the worst mental health problems are usually those who have the worst financial health. Multiple studies report people with mental health problems are more likely to be in debt.

Researchers from the University of South Hampton examined 65 studies on debt and mental health. Their report, which was published in Clinical Psychology Review , found a correlation between mental illness and financial problems.

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Researchers concluded the likelihood of having a mental health problem is three times higher among people who have debt. Depression , anxiety disorders and psychotic disorders were among the common mental illnesses people in debt experienced.

There was an even higher link between suicide and debt. People who complete suicide are eight times more likely to be in debt.

Additionally, people in debt are more likely to experience problem drinking and drug dependence. The researchers did not find a link between debt and smoking .

Short-term debt may place people at the highest risk of depression. A study published in the Journal of Family and Economic Issues found that unmarried people, people reaching retirement age, and those who are less educated were particularly vulnerable to the harmful effects of stress associated with credit cards and overdue bills.

Anyways, if you did find this depressing or if you have debt problems, I cannot recommend more the advice of MIND, the UK mental health charity. They tell you to:

  • Understand your behaviour
  • Talk things through with someone you trust
  • Get organised
  • Get professional advice
  • Look after yourself

  • I strongly suggest you click on this link if you need help.