How Depression Affects Debt and Spending
- Depression is a medical condition that often goes hand in hand with financial problems.
- Recognizing the specific behaviors that are contributing to your financial problems can help you start to address them.
- Taking positive steps and making measurable progress can help you feel better, but don't neglect getting qualified medical help if you need it.
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Depression and financial problems often go hand-in-hand. They can feed off each other, so you sink lower into depression as your financial problems deepen. However, there are steps you can take to stop that cycle.
In fact, taking action to address financial problems like paying off debt and overspending can give you a feeling of empowerment that may ease some of your feelings of depression. This is no substitute for qualified medical help. However, money management can be part of a mentally healthy lifestyle.
No one should expect you to cure your depression overnight or just get over the way you feel. Start implementing a few simple steps that could put you on the path toward feeling better.
The Link Between Depression and Spending
If you suspect you spend more money when you're feeling depressed, it's probably not your imagination. It's actually a very common behavior.
Studies into what's known as retail therapy have found that shopping can release mood-enhancing hormones. Another version of this is called revenge spending. That's the tendency to spend more money after you've been through a traumatic experience.
In fact, the surge in spending—and the resulting increase in consumer debt—following the COVID-19 pandemic has been linked to a form of revenge spending.
These are perfectly normal behaviors. In many cases, treating yourself can put you in a better frame of mind. The key is being able to recognize when the psychological urge to spend may cause you to feel worse rather than better in the long run.
Here are some signs that your spending might be hurting you:
You habitually engage in impulse buying—especially for expensive items.
You often have feelings of buyer's remorse.
You buy things that you only enjoy for a very short time.
You are spending more than you can afford.
The occasional splurge probably isn't going to hurt—unless it's something that really does break the bank. However, when any of the above happens repeatedly, you might need to recognize that this is harmful behavior.
The Vicious Cycle: How Depression Affects Debt, and Vice Versa
While depression is a psychological disorder, it can often be triggered by real-world problems. Debt is a major cause of stress, and that stress can lead to feelings of depression. The problem with debt is that it's not a one-time event. It has lingering effects that continually harass you.
Just as debt can contribute to depression, suffering from depression tends to lead to behaviors that can make it hard to deal with your debt. Symptoms of depression include:
Becoming easily frustrated
Having low energy or fatigue
Finding it difficult to concentrate and make decisions
Trouble remembering things
Each of these symptoms could hold you back from performing basic financial tasks like paying bills, making a budget, and monitoring account activity and balances.
As a result, your borrowing can get out of hand and you might miss payments. That not only allows your debt balances to grow, but late fees, account closures, and credit score damage can add to your debt problem.
Worsening financial difficulties only feed the feeling of helplessness that depression can bring. This is when it's essential to recognize what depression is doing to you so you can take steps to reverse the process.
How to Recognize Depression
If a combination of overspending and inability to deal with financial responsibilities are causing you money problems, depression might be behind it. Also look for other common symptoms:
Excessive feelings of guilt
Low self-worth
Hopelessness about the future
Trouble sleeping
Changes in appetite or weight
If you're often experiencing any combination of these, consider seeking help. Depression is a medical condition. No one would expect you to function with a broken leg or a bad case of pneumonia without seeking medical attention. Seeking treatment for depression is no different.
Limiting How Depression Affects Debt and Spending
Besides addressing the medical aspects of depression, you also need to fix the financial problems it may have caused.
Even without depression, financial problems can feel overwhelming. Don't expect to solve the whole problem at once. Instead, focus on small, manageable steps that are easily accomplished. Take these one by one, so no task feels impossible.
Here are some simple steps to help make sense of your financial situation:
Set a specific time each week to go over your bills and pay any that are coming due. Put this time on your calendar, and don't allow any interruptions to get in the way.
Look at your regular bills and see which have uniform payments that make them good candidates for automatic bill pay. Set up automatic payments for those bills, and you’ll have fewer deadlines to worry about.
Create a system of reminders for due dates that are not handled by automatic payments.
Keep a log of all your spending, noting both the activity and the total amount you spend each month.
As you review your payments, identify which ones are for things you don't really need. For example, people have a tendency to accumulate unused subscriptions. These should be an easy target for cancellation to start saving you money.
Make a budget. Start with just planning how you're going to spend your next paycheck. See how that goes, and make any necessary adjustments. When you find you can budget from paycheck to paycheck, stretch out to budgeting for a full month, then six months, and then a full year ahead.
Make a list of all your debts, including what you owe, the monthly payments and the interest rate on each.
Be sure to budget for any debt payments you have coming up. If possible, make more than the minimum required payments on the debt with the highest interest rates.
If your debt payments are more than you can afford, consider refinancing or negotiating with creditors.
If you don't feel up to figuring out how to deal with your debt or to negotiating with creditors, seek help from a financial professional like a credit counselor or debt relief specialist.
That's a long list, but don't let that faze you. You don't have to do it all at once. Just pick a step that appeals to you most and start there. Once you accomplish that, you can move onto another step, and so on.
As you start to take these steps, keep track of measurable progress like:
How many weeks in a row you've paid all your bills on time. If you snap the streak for any reason, start over and see if you can beat your previous record.
See how long you can go without making an unnecessary purchase. Each day, write down how long you've made it.
Note how much you spend each month, and compare it to your budget target.
If you have debt and are taking steps to reduce it, keep track each month of how much you reduced what you owe, and how much you've paid off in total.
Starting to take positive steps and showing measurable progress can help you start to shake the feeling of helplessness that often comes with depression. That alone won't cure your depression, but it will start to ease some of the financial pressures that are contributing to it.
How to Get Help with Depression
Working out your financial problems and possibly getting some help with them is important, but it's no substitute for getting qualified medical help with your depression.
Seek help from a specialist in your area. There are a variety of approaches to treating depression, so find someone who you feel comfortable with and whose approach makes sense to you.
If you need immediate help, below are some helplines you can call or text:
SAMHSA’s National Helpline: 1-800-662-HELP (4357)
National Suicide Prevention Lifeline: Dial 988
National Hopeline Network: Click the link to connect
Asking for help is a sign of strength. Along with taking positive steps to get control of your finances, working on your problems will help you feel more in control. Progress is within reach.
Debt relief by the numbers
We looked at a sample of data from Freedom Debt Relief of people seeking credit card debt relief during September 2025. This data reveals the diversity of individuals seeking help and provides insights into some of their key characteristics.
Credit utilization and debt relief
How are people using their credit before seeking help? Credit utilization measures how much of a credit line is being used. For example, if you have a credit line of $10,000 and your balance is $3,000, that is a credit utilization of 30%. High credit utilization often signals financial stress. We have looked at people who are seeking debt relief and their credit utilization. (Low credit utilization is 30% or less, medium is between 31% and 50%, high is between 51% and 75%, very high is between 76% to 100%, and over-utilized over 100%). In September 2025, people seeking debt relief had an average of 73% credit utilization.
Here are some interesting numbers:
| Credit utilization bucket | Percent of debt relief seekers |
|---|---|
| Over utilized | 30% |
| Very high | 32% |
| High | 19% |
| Medium | 10% |
| Low | 9% |
The statistics refer to people who had a credit card balance greater than $0.
You don't have to have high credit utilization to look for a debt relief solution. There are a number of solutions for people, whether they have maxed out their credit cards or still have a significant part available.
Student loan debt – average debt by selected states.
According to the 2023 Federal Reserve Survey of Consumer Finances (SCF) the average student debt for those with a balance was $46,980. The percentage of families with student debt was 22%. (Note: It used 2022 data).
Student loan debt among those seeking debt relief is prevalent. In September 2025, 27% of the debt relief seekers had student debt. The average student debt balance (for those with student debt) was $48,703.
Here is a quick look at the top five states by average student debt balance.
| State | Percent with student loans | Average Balance for those with student loans | Average monthly payment |
|---|---|---|---|
| District of Columbia | 34 | $71,987 | $203 |
| Georgia | 29 | $59,907 | $183 |
| Mississippi | 28 | $55,347 | $145 |
| Alaska | 22 | $54,555 | $104 |
| Maryland | 31 | $54,495 | $142 |
The statistics are based on all debt relief seekers with a student loan balance over $0.
Student debt is an important part of many households' financial picture. When you examine your finances, consider your total debt and your monthly payments.
Manage Your Finances Better
Understanding your debt situation is crucial. It could be high credit use, many tradelines, or a low FICO score. The right debt relief can help you manage your money. Begin your journey to financial stability by taking the first step.
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Author Information
Written by
Richard Barrington
Richard Barrington has over 20 years of experience in the investment management business and has been a financial writer for 15 years. Barrington has appeared on Fox Business News and NPR, and has been quoted by the Wall Street Journal, the New York Times, USA Today, CNBC and many other publications. Prior to beginning his investment career Barrington graduated magna cum laude from St. John Fisher College with a BA in Communications in 1983. In 1991, he earned the Chartered Financial Analyst (CFA) designation from the Association of Investment Management and Research (now the "CFA Institute").
Reviewed by
Kimberly Rotter
Kimberly Rotter is a financial counselor and consumer credit expert who helps people with average or low incomes discover how to create wealth and opportunities. She’s a veteran writer and editor who has spent more than 30 years creating thousands of hours of educational content in every possible format.
I often get buyer's remorse. Is this a symptom of depression?
It could be. At the very least, it's a sign you should work on your buying behavior. When you feel the urge to buy something you don't normally buy, give yourself a cooling-off period before you make the purchase. That will give you a chance to have second thoughts before you commit.
What if I'm too embarrassed to discuss my debt problems?
You may feel as if some members of your family or peer group will judge you, but credit counselors and debt relief specialists listen to these problems all the time. They recognize that debt problems happen to a wide range of people. They understand that by seeking help, you're taking ownership of your problems. That's a big step.
By the way, those people you're afraid will judge you? Chances are some of them have had financial problems of their own.
What can I do if I tend to procrastinate and miss billing deadlines?
Automatic bill payments and calendar reminders can help. So can scheduling a specific time every week when you're not likely to be interrupted for taking care of bills and other financial obligations.
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