The Psychological Effects of Debt

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The Psychological Effects of DebtThere is no doubt that money permeates into every aspect of our lives. In fact it’s difficult to think about how we would operate without money and the means to spend it such as credit cards and the use of debt. The amount of money we have not only determines what we can and cannot buy, it also dictates where we live, where we can go, the types of social circles we have and even the direction of our future.

Those who have money in our society are portrayed as having absolute freedom and appear to have it all. Whether or not that is true does not negate the fact that we need money to live, and those who are secure in that aspect are free to enjoy life to a fuller extent. Conversely, those who are constantly worried about paying the bills seem to be always bogged down and distracted by the relentless pursuit of staying on an even keel.

Differing ways of handling the problem

While most people at some point in their lives have faced financial difficulties, everyone handles these situations in a different way and with differing degrees of emotional response. Many who find themselves with money problems react with denial and choose to ignore the state of their financial landscape. This is a major reason why so many people find themselves in overwhelming amounts of debt. The irony of this situation is that debt is usually taken on to relieve anxiety over money, yet at the same time it works to cause it.

Debt can be socially and emotionally debilitating, especially if we are unable to keep up and stay on top of it. It can ruin marriages, friendships, career opportunities and our own sense of self-worth. When people find themselves in the position of being unable to pay their debts, they can begin to feel powerless over their situation and it impacts their viewpoint of their own self-efficacy. These situations all cause a damaging toll on confidence which then seeps into every area of our lives.

Positive effects of taking action

On the flip side, taking action on our debt and resolving the problems seems to have the exact opposite effect and there is a wealth of research is to support this point. Looking for debt advice can be an important part of this process and finding help with debt can be easier than people may think. When we improve our financial situation and resolve our debt issues we can suddenly feel like a contributing member of society who can stand alone and take care of ourselves. Being on a sound financial footing allows us to focus on other aspects of our lives which in turn lead us to feel more at ease with our role in society. This is easy to see because if we are able to focus less on crushing debt, than we are freer to focus on life goals.

Being able to accomplish more in life is of course going to increase our self-esteem and lead to a more positive outlook in life rather than the worry and stress of debt which can lead to a self-depreciating cycle and consequent psychological issues such as depression. Keeping our debt under control will help us towards living responsible, autonomous lives. Whether you’re just out of University or getting ready to retire, it’s always a smart idea to keep a sensible control on your debt. A little vigilance now is likely to save you pain in the future.

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