You already know that debt is bad for your finances. But what you may not realize is that it can affect your health as well — especially if you fall behind on your payments.
As many as 80% of Americans are in some kind of debt, according to a 2015 Pew Charitable Trusts report. While mortgage debt is most common, credit card debt, car loans and college debt are weighing us down as well.
What's all of this debt doing to our health? Nothing good. Debt can impact both your physical and mental state. Here's how debt can affect you, and some tips for tackling your debt problem to protect your health.
Debt can stress you out
With debt loads nearing 2008 record levels, Americans are increasingly spending more than they can afford. That can be stressful. 72% of Americans said they felt stressed about money, according to a 2014 "Stress in America" survey by the American Psychological Association, with 22% reporting "extreme" stress over their finances.
Financial stress triggers a fight-or-flight response and floods the body with stress hormones, causing everything from heart pounding to increased sweating, Harvard Health Publications reports. While that may be useful if you are trying to fend off a tiger, the publication states that "over time, repeated activation of the stress response takes a toll on the body."
That can lead to anxiety or depression. "Empirical studies have found that financial strains such as personal debt and home foreclosures are strong predictors of depression, general psychological distress, mental disorders and suicidal ideation," according to a 2013 study in Social Science & Medicine.
Debt can make you physically ill
Debt doesn't just impact mental health. It can have pernicious effects on your physical health. "Stress, especially financial or other stress that lasts for days, weeks, months or even years, can impact your immune system and cause you to succumb to illnesses quicker," US News & World Report notes.
Even thinking about the possibility of financial insecurity has been found to cause physical pain, Scientific American reports. Debt-related stress has been linked to peptic ulcers, back pain and higher diastolic blood pressure. It can also make you gain weight and lose sleep.
A recent working paper published by the Federal Reserve Bank of Atlanta even suggests debt is linked to higher mortality rates. Becoming seriously delinquent on just one account caused a 5% increase in mortality risk in the three months after the delinquency, although risks eventually return to normal. On the other hand, a 100 point credit score increase caused a 4.38% decline in mortality risk.
"Individuals with better credit or smaller amounts of delinquent debt had a lower probability of death at any given point in time than those with worse personal finances," according to Pinnacle's report on the study.
How to get your debt under control
First things first: If you're worried you aren't going to be able to pay the bills, explore options to avoid falling behind. See if you're eligible for student loan deferment or forbearance or look into a repayment plan with smaller payments based on you income. Just talking to your lender could help, as they may let you to negotiate a payment plan.
You may also be able to consolidate your credit card debt by transferring the balance on a high-interest credit cards to ones with a 0% rate. Just remember that the 0% rate won't last forever: You typically have between 12 and 18 months to pay it off before you have to start paying interest again.
If you're not behind on payments but still have a lot of debt, work on a plan to pay off what you owe as soon as possible. If you have an emergency fund, it might be wise to put some (but definitely not all) of it toward your highest-interest debt.
If you'll need several months to pay off what yo owe, making a budget will give you a better idea of how much you can realistically afford to pay each month. Then consider a couple repayment strategies like the debt snowball or debt avalanche to accelerate your payments.
If that's not enough, you may want to consider lifestyle changes like getting a roommate, finding a side hustle or — as a last resort — moving in with mom and dad so you can devote more of your money to repaying what you owe.
The sooner you get your debt repaid, the sooner you can eliminate this major source of stress and move on with your life.
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