New Survey Links Debt to Stress and Spending Cuts

Dealing with debt can be a challenging and stressful experience for many Americans. A recent survey conducted by Achieve and Money.com revealed that a growing number of consumers are feeling overwhelmed by their debt, leading to negative emotions and physical effects that prompt changes in their financial habits.

The survey, which interviewed 2,000 U.S. adults in February, highlighted the impact of unmanageable debt on consumers’ lifestyles. With outstanding balances on the rise, missed payments increasing, and high interest rates making debt more unaffordable, many individuals are finding themselves in a difficult financial situation.

One of the most significant effects of mounting debt is the need to cut back on spending. The survey found that 26% of respondents had to reduce spending on basic needs such as food, clothing, or household items in order to meet their debt obligations. This number increased to 40% among those who felt they had “a bit more debt than is manageable” and 47% among those with “far more debt than is manageable.”

In addition to cutting back on spending, borrowers under pressure are also tapping into their savings accounts. Approximately 3 in 10 respondents with unmanageable debt reported withdrawing money from emergency savings, while 1 in 7 admitted to dipping into retirement or other long-term savings accounts.

Furthermore, the survey revealed that 14% of respondents had skipped a monthly bill or debt payment because they couldn’t keep up. This number rose to 26% among those with a bit more debt than they could manage and 37% among those with far more debt. Individuals with unmanageable debt were also more likely to increase their credit card debt to cope with their existing obligations.

The emotional toll of debt can be significant, with feelings of shame, anxiety, and regret affecting borrowers’ mental health. Embarrassment and hopelessness about improving their financial situation were commonly reported among those with high levels of debt. The stress of managing debt can lead to unhealthy coping mechanisms such as stress eating, substance use, and challenges in relationships.

Breaking free from overwhelming debt can be difficult, but seeking help and creating a realistic plan can make a difference. Financial therapists recommend viewing debt repayment as an investment in your future and focusing on intentional spending to free up money for debt payments. Strategies such as the debt snowball method, debt consolidation, or debt management plans can help individuals tackle their debt in a structured way.

It’s crucial to address debt-related stress and seek support from financial planners, therapists, or trusted individuals to navigate the challenges of managing debt. By taking proactive steps and seeking help when needed, individuals can work towards financial stability and improved well-being.