Debt is a double-edged sword. Being able to borrow money can improve your life by allowing you to purchase a home, get an education, and go out to dinner on a whim. On the other hand, having a large amount of debt can be stressful and take a toll on your mental and emotional health.
In late 2024, the average American household was $175,075 in debt, up 3.8 percent since 2023 — so if you’ve got significant amounts of debt, you’ve got company.
Here’s how debt can affect your emotional well-being — and what steps you can take to feel less overwhelmed and more in control.
Why Debt Causes Stress
“Debt is a source of stress that can cause anxiety, depression, and even suicide,” says Rosario Chacón, a certified financial planner and financial behavioral specialist based in Oakland, California. Research has found that being in debt in midlife increases the odds of being diagnosed with a psychiatric disorder by 90 percent.
“One reason for this emotional toll is that debt can feel like a failure, either on the part of the individual or on someone else in their family,” Chacón says.
Carrying debt can also make people feel out of control and resentful. “Often, it is not negotiable and can be burdensome when we have more important commitments, like feeding our family and putting a roof over our heads,” she adds.
5 Tips for Resetting Your Relationship With Debt
Don't let debt control your life by using these five tips.
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5 Tips for Resetting Your Relationship With Debt
Chacón helps people who struggle with managing their own debt as well as those who are responsible for managing the debt of their parents, spouses, or other relatives. Her approach combines financial principles with a compassionate understanding of human behavior and psychology.
She and Ashley Agnew, a certified financial therapist and the director of relationship development at the financial planning group Centerpoint Advisors in Needham, Massachusetts, offer advice on how to cultivate a healthier emotional response to debt and feel more in control of your financial situation.
1. Know How Much Debt You Have
The first step in changing your relationship with debt is facing it. If you have several debts — a mortgage, student loan payments, car payments, and credit card bills — print out your most recent statements or copy the balance of each one onto a piece of paper.
Add up the total amount of debt and say it out loud. “If you are lying to yourself, no plan will ever work,” Agnew says. Although a large amount of debt can be difficult to face, Agnew says that confronting the dollar amount head-on, whatever it is, can help reduce your shame about it.
2. Make a Plan (and Consider Seeking Professional Help)
Meeting with an adviser who uses financial therapy-informed planning is the ideal way to reframe your relationship with debt, Agnew says. These professionals can help you create an actionable plan for paying off debt and can also help you understand how debt is affecting you emotionally.
The best way to find this type of adviser is to search the directories of organizations that offer well-regarded certifications for financial therapy, like the Financial Psychology Institute or the Financial Therapy Association. As with other types of financial planners or therapists, the cost can vary greatly.
The New York Times reported in 2022 that financial therapists charge anywhere from $100 to $800 per hour. If your financial therapist is also a licensed mental health provider (such as a clinical psychologist, marriage and family therapist, clinical social worker, or mental health or professional counselor) — and many are — they may accept health insurance, so make sure to check with each provider beforehand.
“If working with such a professional is out of the scope of your budget, there are some great books available, like Mind Over Money,” Agnew says.
3. Recognize That Repaying Debt Will Take Time
Part of deciding on and following a healthy plan for repaying debts is accepting that it will take time.
A financial planner with training in financial therapy can help you figure out a budget that will address your debts without making you feel like you can’t spend money on other things at the same time and enjoy life, Agnew says. You will still need to make choices about spending, but you shouldn’t feel guilty about spending every dollar that doesn’t go toward paying off your debt.
The plan should also address the possibility of unexpected bills and emergencies. “Having a plan for when things go wrong can help you sleep better at night,” Agnew says. Dedicating a small portion of your budget to an emergency fund will lower your stress and can even prevent further debt from piling up.
4. Practice Gratitude for What the Debt Has Afforded You
Chacón recommends practicing gratitude. “When I saw my $70,000-plus debt after completing my MBA, I sighed and called it a blessing,” she says. “I would not have gotten that far in my education without the blessing of student loans.”
There’s an argument for making educational opportunities more affordable and accessible to everyone (regardless of one’s financial background), of course. But Chacón says that looking on the bright side for the sake of managing your emotional health can be helpful.
5. Don’t Think About Your Debt When You Don’t Have To
Pushing your debt out of your mind may be easier said than done, but Chacón says that it’s important not to let financial obligations overtake the joy in your life.
Allocate time to think about your debt: when you’re making your plan and your budget, when you’re actively paying down your debts, and maybe even when you just need an hour every now and then to honor those stressful feelings. Your local credit union or state extension office (resource hubs run by designated universities in each state) might offer free or low-cost counseling or support groups for people in the same situation, which can be helpful.
Outside of these allocated times, try to think as little about your debt as possible. Chacón recommends working on being present. Go outside and feel the sun on your face. Cuddle with a loved one or a pet. Spend time with someone who makes you laugh. All of these things can help you live in the moment, which helps you realize that your life is about so much more than your debt and your finances.
The Takeaway
Being in debt can feel overwhelming and have a negative effect on your mental health.
Working with a financial planner who is also a licensed mental health provider can help you manage your debt as well as your emotions around it.
Taking breaks and practicing gratitude can help you avoid letting financial obligations take over the good things in your life.
EDITORIAL SOURCES
Everyday Health follows strict sourcing guidelines to ensure the accuracy of its content, outlined in our editorial policy. We use only trustworthy sources, including peer-reviewed studies, board-certified medical experts, patients with lived experience, and information from top institutions.
Resources
El Issa E. 2024 American Household Credit Card Debt Study. NerdWallet. January 7, 2025.
Wolfe JD et al. Varieties of Financial Stressors and Midlife Health Problems, 1996–2016. The Journals of Gerontology. January 2022.
Cowles C. Where Money Meets Feelings: Financial Therapy Finds Its Footing. The New York Times. August 13, 2022.
Kelsey M. Latimer, PhD, RN, is a psychologist, nurse, and certified eating disorder specialist, and is the founder and owner of KML Psychological Services.
Dr. Latimer earned her PhD and master's degree from the University of North Texas, with an emphasis in child and adolescent development and in neuropsychology. Throughout her doctoral training, she became passionate about the prevention and treatment of eating disorders, women's issues, trauma treatment, and anxiety management. She has since overseen several nationally recognized eating disorder treatment programs.
She recently earned a bachelor's in nursing from Florida Atlantic University and is in the process of completing a master's of nursing, with a psychiatric mental health focus, which will allow her to become a medication provider. In addition, she has been accepted into an intensive research training and certification program at Harvard Medical School for 2024.
Latimer's focus is on empowering people to be informed and aware of their health and well-being, which includes increasing access to care. She has made over 50 invited appearances to speak about topics such as body image, dieting downfalls, eating disorder evidence-based treatment, college student functioning, and working with the millennial generation. She has been featured in dozens of media outlets and is a coauthor of the children's book series Poofas, which helps children understand their emotions and develop positive self-esteem and self-talk.
Christine Byrne, MPH, RD, LDN, is a registered dietitian providing non-diet, weight-inclusive nutrition counseling to adults struggling with eating disorders, binge eating, orthorexia, chronic dieting, and strong feelings of guilt or shame about food. She founded Ruby Oak Nutrition in 2021 to serve clients and grow a team of anti-diet dietitians. She uses the principles of intuitive eating, Health at Every Size, body respect, and gentle nutrition to help clients recover from disordered thoughts and behaviors and establish a healthier, more peaceful relationship with food and their bodies.
Byrne lives in Raleigh, North Carolina, and sees clients both in person and virtually in several states. As a journalist, she writes about food and nutrition for several national media outlets, including Outside, HuffPost, EatingWell, Self, BuzzFeed, Food Network, Bon Appetit, Health, O, the Oprah Magazine, The Kitchn, Runner's World, and Well+Good.
