You’re familiar with the effects of debt on your mental health if you have ever been anxious about a phone call from a collection agency or a bill arriving in the mail. Prior to COVID-19, 56% Americans stated that their debt negatively impacted their lives. This number has increased with the addition of a pandemic or financial stress.
When you are trying to balance your finances, pay attention to how you feel mentally and physically. Feeling overwhelmed or helpless can have a significant impact on your mental health. It is crucial to overcome financial stress in order to get out of debt.
1. Debt And Your Health
We are indeed a nation in the red. At the end of 2019, credit card debt hit an all-time high, rising by $193 billion to $14.15 trillion. This staggering figure doesn’t take into consideration the serious economic consequences and fallout from COVID-19. It’s bad news for our long-term health.
No matter who you are or why you owe money to anyone, science has shown that having debt can negatively impact your physical and psychological health.
Debt Can Raise Your Blood Pressure
Northwestern University’s study found that people aged 24 to 32 with high debt-to-asset ratios (meaning they don’t have enough money to repay what they owe) are more likely to report poorer overall health. A significant increase in blood pressure is also a risk factor for stroke and heart disease.
It Could Lead To Anxiety
Sweet’s research revealed that those with higher levels of debt felt 11.7% more stressed than the average. (And, yes, she believes that higher blood pressure can be linked to higher levels of stress). The mental damage debt can do to your mind includes worrying thoughts and frightening predictions about the possibility of becoming homeless or finding it impossible to buy food.
Debt Has Been Linked To Depression
Not only are young people affected by the stress of debt, financial troubles can also affect the mental health of older adults. According to a Rutgers University study, people aged 51 and over were more likely to experience depressive symptoms if they had high amounts of unsecured debt (such as credit card balances or medical bills) and felt out of control.
People in debt can have trouble sleeping, may not be able to eat healthily, and may lack the time to relax, all of which can lead to depression.
2. How To Avoid And Pay Off Debt
Are you drowning in debt? Don’t worry, you can pay it off. You are not the only one. These tips will help you cut down on your debt.
Before you begin repaying your debt, you should take the time to identify what kind of debt you have. This could be credit card debt, student loans, mortgages, or any other type. A personalized plan to pay off debt can be made by understanding the types and amounts of your loans.
Here are 12 quick ways to get rid of debt:
- You can create a budget.
- The most costly debt should be paid first
- Pay more than the minimum balance
- Benefit from balance transfers
- Reduce your credit card debt.
- Use a debt repayment app.
- You can delete credit card information from online shops.
- Sell your Illinois household items and gifts that are not needed.
- Change your habits.
- A side hustle can increase your income.
- Consider debt consolidation.
- Do not fall back into old habits once you have achieved your goals.
3. Money-Saving And Financial Tips
The hardest part about saving money is sometimes just getting started. This step-by-step guide to saving money will help you create a realistic and simple strategy that allows you to save for your long- and short-term goals.
Get Out Of Debt
You will need to clear any outstanding debts before you can start saving. The more you put off paying off debt the greater it will become. Interest — the cost of borrowing money — increases over time. The interest you pay on your debts can wipe out any savings you have.
You can quickly get out of debt by using a budgeting technique such as this 50/30/20 budget.
- Use 50% of your income on your needs
- Use 30% of your income on your wants
- Save 20% of your income
Automate Your Savings
Automating your savings contributions every month is a good idea if you have a fixed monthly income. Automating your monthly savings transfers from your daily spending account to the savings account every month is an option. This reduces the chance that you will use these funds to pay for your daily expenses.
Cut Back On Your Utility Bills
A great way to save money is to reduce your utility bills. Your Peoples Gas bills are significant components of your monthly fixed expenses. If you can lower them, you could be able to make a little extra cash. Here’s how it works:
- Switch your energy provider: You could save hundreds of dollars every month by getting the lowest tariffs in Illinois.
- Replace your standard lightbulbs with LED bulbs: They are 75-85% more efficient than regular lightbulbs and last 15-25 times as long.
- Get a smart thermostat: It will intelligently adjust your central heating, potentially saving you money.
- Seal any air leaks: If you have gaps between your windows or doors, your electric bill will rise. Your heaters will need to work harder to keep the room warm. Seal these gaps with pressure sensitive weather strips to prevent warm air from escaping.
Cancel Any Unused Subscriptions
Many companies see subscriptions as a way to make a lot of money. Because customers subscribe to their service once they have it, they are less likely to cancel it–even if they don’t use it often.
In general, however, subscriptions are rarely used to their full potential. It is more economical to cancel any un-utilized subscriptions immediately than to wait for the day when you may actually use them.
Even though it can feel overwhelming, debt is not impossible to manage. There are many professionals who can help with money management and debt relief, including debt counselors and support groups. Although budgeting and saving can be stressful, having a goal can help you feel calm. This can help you envision a bright future where you have your first home, a family, or just something you want.