Financial Thoughts

10 Ways Financial Constraints Impact Your Life

Man inactivating debt

Regardless of whether a debt is a good one or a bad one, it’s a fact that any liability can cause serious emotional effects. If you look at any study on this topic, they show us what we already know: financial constraints are about much more than money.

Being in debt can result in a few other emotional and psychological issues.

Average American Debt

Just look at the average American debt of $16,000 in credit cards. Almost 40% of Americans carry that credit card debt from month to month. Educational loans show that the average college student owes about $40,000 in student loans, and if an individual switched majors or opted for a higher qualification, then they owe a lot more.
Let’s add car loans, mortgages, medical debts and bad credit payday loans, and you can bet that most Americans have some sort of financial constraints in their lives.

Effects of Financial Contraints

The thing about debts is that they affect people differently. There doesn’t seem to be a universal tolerance of debt. Jack might suffer from anxiety over a small $1,000 credit card debt, while Peter didn’t even think twice about his debt until he saw his student loan and credit card balance topping $60,000. However, regardless of the type of debt or the amount, there are some psychological and emotional issues that go along with financial constraints.

1. Depression and Anxiety

A man in depression because of financial constraints Studies have shown that people struggling to pay off debts and loans are likely to suffer from quite a few health problems, including depression and anxiety. Constant money worries with the thought that there is no end in sight, and the situation is hopeless, causes anxious feelings.

Another study done on household debt showed its impact on mental and physical health. There were no surprises when the high rates of stress and depression were associated with large amounts of debt.

2. Resentment

Debt can be particularly rough on marriage, partnerships or family. A spouse or partner may resent the other as a way of coping with debt. It’s familiar enough for a partner to blame the other for increased debt in the relationship, the loss of a job, them not making enough money, or having lousy spending habits which lead to debt.

The fact is that arguments about money are the top reasons for divorce. Large amounts of debt have severe effects on the psychological well-being of a household. Resentment is not confined to your partner either. You might also resent your employer for not paying you enough money or not giving you a raise.

Family members or friends that are financially dependent on you can cause resentment as well. Some people resent themselves for making the decision that led them into debt in the first place. But you should remember that any financial problem faced by a family can be solved.

3. Denial

While some people feel the weight of debt, others try just to block it out. Constant reminders with overdue notices can be ignored as part of your denial style. The problem with denial is that while you ignore the debt completely, it just keeps getting bigger.

Denial shows itself by leaving bills unopened or hiding them into a drawer and forgetting about them, and not answering your phone just in case it’s somebody chasing you for money.

By not attending to the outstanding debt, this can result in you owing more. Increased interest charges and non-payment fees help the debt grow.

4. Stress

Debt and stress go hand in hand. If you owe a lot of money and it weighs on your mind, you are naturally going to worry about how you will pay it off and wonder if you will ever get out from under it.
Stress can affect your work and losing your job would be a catastrophe personally and to your financial position. When you stress about the money, you worry about spending money on the necessities of life such as food to eat and gas for the car.

Stress, anxiety, and depression will likely increase health problems. It’s no surprise to know that the higher your debt is, the higher your chances are of experiencing stress and depression.
Another aspect of stress is that it tends to make a person react negatively to a positive event. For example, buying a new pair of shoes or a new smartphone, even a nice dinner with friends should make you feel happy, but that feeling is replaced by further stressing about spending money and getting deeper into debt.

5. Anger and Frustration

Debt is hard to accept. If that debt is somewhat beyond your control, it can be frustrating and make you angry. You are dealing perfectly well spending on vacations, shopping and the having an occasional dinner out. But things like a job loss, divorce, theft, a family death, major car repairs or an unexpected medical bill can be particularly frustrating.

6. Regret

You may regret making purchases, not saving enough and making other poor financial decisions that have led to your debt and that pile of bills.

7. Shame

Success in our society is measured by the money and the material possessions you have. Feeling embarrassed or ashamed if you’re dealing with financial constraints is a natural feeling. Not living the life you want? Not making enough money? Did you manage your money poorly? Resorting to online payday loans again and again? These can lead to feelings of embarrassment.

8. Social Embarrassment

Man facing financial problems The last thing you want is your family and friends knowing that you are struggling with financial constraints. The topic of your debt is taboo, and people are naturally hesitant to talk about how much money they might owe. If you keep wanting to portray that look of success, it’s going to mean spending more money and getting further into debt. For example, saying yes to an expensive night out or buying gifts for family and friends that you cannot afford.

9. Fear

What’s going to happen if you don’t pay your bills? Eviction? Foreclosure? Repossession? Bankruptcy? No electricity or no gas? You might fear to lose your job or your car breaking down, either of which would destroy you financially. Other fears that can occur is fear of never being able to get out of debt.

10. Relief, Freedom, and Accomplishment

These are positive emotional effects you will feel once you’ve paid everything off and are debt free.
Financial freedom is not just being debt free. It also means freedom from worry. And that will lead to a significant improvement in mental and physical health.


While it may seem stupid to borrow when you are already feeling the effects of debt, a consolidation type of loan can cut down the number of outstanding debts to just the one. A lower repayment, improved personal financial management, and a debt-free goal might be just the boost you need to lift you mentally and as a result, make you feel good too.

One thought on “10 Ways Financial Constraints Impact Your Life

Leave a Reply

Your email address will not be published. Required fields are marked *