How Depression Might Affect Spending and Debt
- Depression and debt often go hand in hand.
- Studies show that depression can trigger unhealthy spending.
- You can't solve your debt problem without solving your depression problem. Professional help is available for both.
Between the coronavirus pandemic, economic crisis, and protests and civil unrest, there’s plenty for Americans to feel anxious and depressed about. But even before these 2020 challenges, anxiety disorders (including depression) affected 40 million adults in the US, which is about 18% of the population. In 2017 alone, 17.3 million adults experienced at least one major depressive episode, representing 7.1% of all U.S. adults.
What many people may not realize is that depression can change how a person spends money and could even impair their ability to do routine financial tasks. This could lead to overspending or debt, which may then become one more source of stress for anyone already struggling emotionally. To help prevent the added stress that this can bring, let’s look further into the connection between depression and spending.
How to recognize depression
People suffering through a major depressive episode experience a state of low motivation and often feel overwhelmed to the point where just getting through the day can seem like an enormous task. Other signs of depression can include:
Sadness, depressed mood, inability to enjoy life
Loss of interest in daily activities
Problems with sleeping (trouble sleeping, or sleeping too much)
Changes in eating habits, weight gain or loss
Difficulty concentrating and making decisions
Feeling a lack of self-worth
Low mood, low energy, and low motivation all affect how a person approaches their day-to-day activities. It can make money management and long-term financial planning difficult, which may keep you from reaching your financial life goals.
The link between depression and spending
Many of us have a hard time tracking and limiting spending, even when we feel mentally healthy. But for people suffering from depression, their lack of motivation may cause them to put off mundane or difficult financial tasks and their emotions may drive spending. This combination of depression and spending can lead to debt, which creates an even bigger financial burden.
People with depression may be more likely to:
Neglect basic financial tasks. Forget about budgeting… even something as simple as setting up automatic payments on a new credit card can easily slip through the cracks on days when you don’t have enough energy to even get out of bed.
Pay late fees. Not keeping up with routine tasks, like paying bills, may lead to late fees and negative impacts to credit score.
Pay for unused services. When you don’t have the energy to do what it takes to cancel them, subscriptions and memberships may keep getting billed each month unnecessarily.
Buy on impulse. When you want a little something new to try to lift your spirits, haven’t planned your long-term financial priorities, or simply don’t have the energy to think before you buy, impulse spending can take over.
Pay more for conveniences. Whether it’s paying twice as much for milk at the convenience store instead of the grocery store, not saving money by buying in bulk, or not taking advantage of sales and coupons, little extra costs can add up to a big toll in the long run.
But even if you’re struggling with major depressive disorder, chronic depression, or have developed depression symptoms due to recent events, it doesn’t mean you can’t take control of your life and your money. Below are some ideas and resources to help you get back on your feet and help prevent depression from making your financial situation worse than it has to be.
How to protect your finances from your depression
These suggestions all fall under one umbrella category: Ask for help. Depression can cause a person to feel like they’re all alone and incapable of handling the most basic aspects of living. Even if you have no friends or family to turn to, you can seek assistance from professionals who can help you find the resources you need.
Here’s how to get help managing finances in different areas of your life:
Routine financial tasks. A trusted friend or family member could help you set up things like automated bill pay, direct deposit, and transfers to your savings and retirement accounts.
One-time financial tasks. Did you know you can find electronic help canceling your unused gym membership? You may also want to get help disputing a fraudulent charge on your credit card, researching a big purchase, etc.
Household tasks. If cooking and cleaning are too much to handle, enlist the help of family or look for service providers who can do these tasks for you. Of course, you’ll have to weigh the cost of hiring someone against the cost of paying for conveniences like having food delivered.
How to get help with depression
While financial health is important, caring for your mental health comes first. If you or someone you know might be suffering from depression and needs support, you can call any of the depression hotline numbers below, where you can get advice on the phone (or by chat, if you can’t talk on the phone) and get connected with local treatment professionals.
SAMHSA’s National Helpline: 1-800-662-HELP (4357)
National Suicide Prevention Lifeline: 1-800-273-TALK (8255)
National Hopeline Network: 1-800-SUICIDE (784-2433)
Patients with depression, and their families, can also find online resources on the American Psychiatric Association website.
How to get help with debt
If you have over $10,000 in unsecured debt that you’re struggling to keep up with, whether it’s due to depression affecting your spending, or any other financial hardship, you may qualify for a debt relief program through Freedom Debt Relief. Contact one of our Certified Debt Consultants to learn about your debt relief options and get help choosing the best solution for your situation.
Study: Freedom Debt Relief Helps Clients Reduce Stress (Freedom Debt Relief)
Depression, Spending, and Bad Money Behaviors (The Simple Dollar)
5 Ways to Get Rid of Debt Stress (Freedom Debt Relief)
In-Depth: Living with Depression (PsychCentral)