Debt doesn’t just show up in the bank account. It can also create a deficit in people’s hearts, minds, and everyday lives. With the cost of living continuing to rise and without income matching the pace, hardworking people all over the country are mounting new levels of debt.

How debt can impact your life outside of your finances

The scary thing about debt is that it doesn’t just impact your finances, the costs continue to rise throughout the rest of your life. This includes many things people care about most including loved ones, dreams, health, and that golden goal of retirement. 

Mental health

The three-headed monster of anxiety, depression, and stress doesn’t take much to appear these days. Life feels as busy and high stakes as ever, and the newsreel and social feeds are an endless cause for concern. Good mental health is already hard to maintain, and debt can be one of its greatest offenders.

Temporary fight-or-flight responses from our ancestors' days of encountering sabre-tooth tigers have become an everyday experience, flooding our systems with far more cortisol and adrenaline than they’re designed to handle. With debt looming over you, every phone call, email, or piece of mail carries the threat of more bad news. This constant state can trigger anxiety and unhealthy coping like addictive substance abuse or even self-harm.

As financial struggles continue, they are also associated with feelings of hopelessness, helplessness, and low self-worth — all markers of depression. The self-blame that sets in can be so debilitating that it becomes even more challenging to resolve your debt. This can often lead to even more debt and turn into a debt cycle that becomes increasingly challenging to get out of as the overall stress and burden of your debt will continue to harm your mental health.

Physical health

The weight of the debt experience can seep into your behaviour on the most basic level, ultimately affecting your physical well-being. This impact manifests in two of the most significant human needs — eating and sleeping.

Bad diets often emerge because of comfort and convenience. Many people turn to comfort foods in times of stress, and these foods are often unhealthier, processed foods with high levels of fats and sugar. When people are tired from working hard and stressing over their finances, fast food often seems like a quick and convenient answer. Not only is it fast, but it can even seem cheaper than the rising cost of food in grocery stores. Of course, comfort and fast food contribute to high blood pressure, poor heart health, type two diabetes, and other physical health concerns.

You’d think that with all the energy spent on working hard and worrying about debt, people would fall fast asleep, but debt tends to keep people awake at night as well. It generally takes seven to eight hours of sleep for the mind and body to get the rest it needs. However, several people dealing with debt often toss and turn instead of sleeping. This interrupted sleep can have both short and long-term impacts on health such as raising blood pressure and increasing the chances of dementia later in life.

Exercise or other recreational activities such as community sports and gym memberships often fall off due to the time, energy, and cost. Between decreased exercise, a poor diet, and restless nights, your physical health can notably decline when dealing with debt.

Strain of relationships

If your mental health is declining and your physical health is declining, you’re likely not bringing your best self to the people who matter most. Unfortunately, financial hardship is one of the biggest contributors to divorce. Too many marriages pay the ultimate price due to the sprawling impact of debt. Couples will often have differing opinions as judgments and blame arise over spending habits, income, and how to strategize around alleviating debt in the relationship.

It doesn’t stop with couples. Relationships with children can be impacted as well. Parents carrying the additional strain of worrying about debt are often lower on patience when it comes to parenting. Consuming energy working hard for as much income as possible while also worrying about debt can be so draining that mom and dad don’t have as much energy to play with their kids or engage with them on a more meaningful level.

This pattern can extend to friends, siblings, extended family, and professional relationships as well. If you’re exhausted from a combination of hard work and constant worry, you likely don’t have as much energy to bring to healthy relationships as you’d like.

Opportunity costs

This is one of the sneakiest offenders of debt. If the debt you’re experiencing is big enough, it can impact other opportunities for self-improvement and financial gain. While you’re focused on doing your best to manage your debt, you’re also missing out on chances for investment. Savings, down payments for property, or strategic investments to grow your financial portfolio all take a back seat with the black cloud of debt hanging over your bank account.

Additionally, your energy may be so wrapped up in thinking about and trying to resolve your debt that it’s impacting the effort you put into other areas of your life. You may not be bringing your A-game to work. You can’t think about retraining or the higher levels of education because you can’t afford the cost, or you can’t take time and energy away from generating an income to better yourself.

The lost opportunities continue to mount as a result of debt. This consequence is subtle, harder to spot, and can catch up with you over time. 

Delayed retirement

In the end, this one just might hurt the most. We all dream of riding off into the sunset to enjoy those golden years after a lifetime of hard work. But the longer debt lasts, the longer it may take to retire. That restful dream gets farther and farther away. If you’re constantly in a cycle of paying down your debts, you won’t be able to save for retirement. It’s that simple. And that painful. This is even truer for people who are self-employed or don’t otherwise have the benefit of pension plans or RRSP matching programs.

Most retirement plans are designed around investing as early as possible to benefit from compound interest. The longer this is put off due to debt, the more compound interest you’re missing out on. Spending years paying off debt in the present can cost you years of retirement in the future.

Support is available

No one should have to go through life juggling all of these costs rippling out from their finances. You do have options and you’re not alone. Consulting a Licensed Insolvency Trustee is a solid first step on your road to full financial recovery. Considering Bankruptcy may be a more viable option than you ever considered. Or perhaps filing a Consumer Proposal makes the most sense for you. Everyone’s financial journey is different and your Trustee can help you navigate that path.

If you are experiencing financial strain from debt, don’t forget to take care of yourself and your loved ones as you work toward solutions and a debt-free future.