Debt stressing you out? Grab the Paidback app (it’s free) and automate your debt payoff. It’ll take the stress out of it and allow you to be debt-stress-free. 

Debt is the biggest cause of financial stress. And it can take a serious toll on your mental health. It’s probably no surprise that debt impacts mental health, and if you’ve got debt, you’ve likely experienced the pain it can cause. Here’s what causes financial stress, how it impacts your mental health, and most importantly, what you can do about it. 


There are many different things that can cause financial stress. And if you are here, maybe you have experienced one or more of these.

Most financial stress comes from carrying debt. 

Financial stress can also arise from not having enough income to meet basic needs, like rent, groceries, and other necessities. Or insufficient income to support the lifestyle you want. 

Paying for education is another strong financial stressor. Whether it’s taking on student loans, or working part or full time while trying to navigate a college or graduate degree. 

Jobs that have unstable income can cause financial stress. This includes jobs like real estate agents or other types of sales, where your income is neither fixed nor guaranteed. 

Savings can also impact financial stress. People with no emergency fund and or no retirement savings tend to experience financial stress. 

Since debt causes the most financial stress by far, we’ll examine next how it impacts mental health. 


Debt can impact mental health in many ways.

One of the most obvious ways is that it causes more stress, which can have a powerful impact over your mental health. Being in debt increases your likelihood to develop anxiety and depression. In fact, people in debt are twice as likely to experience depression than those who don’t have debt. 30% of people who carry debt experience anxiety. 

Being in debt can also interfere with your sleep, which can quickly snowball into trouble for your mental health. The very first time I opened up both mine and my husband’s student loan debt accounts and realized that together we can accumulated $650,000 from dental school and law school, I didn’t sleep a wink that night. I tossed and turned and on it went for several weeks, which of course, negatively impacted my mental and physical health. 

People in debt are three times as likely to take their own lives than people with no debt. If you are experiencing thoughts of suicide, you aren’t alone and there is help. You can call 1-800-273-8255 to speak with someone for free who can help, or chat with someone who can help here

Debt can impact mental health and manifest itself in many other ways. One study showed that it was a strong indicator for resentment in marriage and ultimately divorce. People who carry debt also reported being stressed to the point of not being able to function. Being in debt elevates feelings of anger, regret, shame, fear and embarrassment. 

In addition to mental health, debt also negatively impacts physical health. Being in debt makes you more likely to develop chronic disease and hypertension. 


It’s probably not surprising to learn that debt impacts mental health. The real question here, is what can we all do about it? And the great news is that there are plenty of things we can do to cope with financial stress especially as it relates to debt. 


One good way to help cope with financial stress is to stop adding debt. People who feel debt stress are more likely to experience increased stress in all aspects of their lives– including stress around their families and loved ones, and stress related to work, among others. In one study, 64% of graduate students reported that their debt related stress interfered with their optimal functioning. By STOPPING the cycle and refusing to add more debt into your life, you’ll be able to cope with financial stress better. 


Tracking your debt is another excellent way to cope with financial stress. While it might seem like ignoring your debt will help you feel better, it will actually make you feel worse and less in control, contributing to the amount of stress you’ll feel. Instead of burying your head in the sand when it comes to your finances, get in there and learn exactly how much debt you owe and where you stand. 

You can easily track your debt for free in the Paidback app. You can enter in each of your debt accounts so you have the full picture of your finances and manage it all in one easy to see place. You can also track your payment progress, connect with other link minded people, and text debt experts any questions you have. 

Tracking your debt will help you pay it off faster and help you gain control over your debt which will reduce the stress you feel. 


One of the very best ways to cope with financial stress is to make plans for your money. 

Start by choosing a debt repayment plan. You can pay off your smallest balance debt first, commonly called the “debt snowball” method. The idea here is that paying off smaller balances first will give you a high and help you stay motivated to continue paying off debt. Lots of people are successful using this method. 

That said, I much prefer the debt avalanche method, where you pay off your highest interest debt first. This method will save you the most money when it comes to paying off debt. 

You could also choose to pay off the debt that is most bothersome to you first. 

Whichever plan makes the most sense to you– choose one and stick with it.

After you’ve chosen your method, you should start tracking your spending and ultimately create a budget, and establish savings. 

This post “How Do I Pay Off Debt” will walk you through each of these steps in more detail. You should also download our free Debt Payoff Starter Kit to get you started. 


One of my personal favorite therapeutic techniques to cope with debt stress is called “slay the dragon.” You maybe have heard of this in other contexts when you’re trying to cope with something hard or let go of past trauma.

To “slay the dragon,” you write down every negative feeling you are feeling about debt or financial stress. Make it a bullet point list or as elaborate as much as you’d like. Once you have written everything you are feeling down, you BURN it or rip it into shreds and throw it away, which will help you let go of the stress related to it. 


Talking to someone can help you cope with financial stress. Call someone you trust and tell them how you’re feeling. Expressing yourself in this way will help you cope with financial stress. 


Has anyone ever told you to eat healthy, exercise, and get some rest before? I’m going to go out on a limb here and guess that, probably yes, at some point you’ve heard this advice. And for good reason. 

Getting proper nutrition, oxygen flowing into your body from exercise, and a good night’s sleep can do WONDERS for the stress that you feel. Even if NONE of your financial circumstances were to change, these three things can help you manage the stress. Conversely, when you aren’t eating healthy, exercising, and sleeping, it can exacerbate your stress. 


Another way to help relieve financial stress is to start increasing your income. The second biggest cause of financial stress (next to debt) is not having enough income to meet your bills. There are plenty of things you can do to increase your income, from taking on side hustles, asking for a raise, or getting a new job that pays more. If you aren’t sure how to go about increasing your income, here’s a list of ways to make money without a job


Finding a healthy outlet is important to cope with financial stress. It can be as simple as going for a run, taking up a sport like pickle ball, painting or art, anything that brings you endorphins and takes your mind off of your finances. 

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