Debt and Health

by D.M. Murdock

Studies have conclusively shown that massive debts have a detrimental effect on health. In 2000, a study by Drentea and Lavrakas entitled, "Over the limit: the association among health, race and debt," was published in the journal Social Science & Medicine and concluded that "both credit card debt and stress regarding debt are associated with health." 1 Lavrakas created a "debt stress index" that "asked respondents how greatly they worried about their total debt and showed a strong correlation between debt stress and personal health." 2 In this and other studies, it has been found that over half of American workers suffer from money problems that created a variety of health issues, and that caused or exacerbated detrimental behaviors such as drinking, overeating and smoking. Exacerbating this problem is the fact that people with money difficulties will spend less on health care. Furthermore, in countries such as the United Kingdom and New Zealand, studies revealing the negative impact of debt on students' health are being used to assess the societal impact as well.

Although it is not crucial to living a decent life, as there is hope even for those who implode financially, it does make life easier to have decent credit and credit scores, since these are factored into many aspects of life, including employment, insurance and housing.

The answer to the question of whether or not you should be debt free to improve your health will likely depend on how much stress your debt causes you. If your debt is perpetually hanging over your head, causing you distress because you can never take care of it, you are probably adversely affecting your health.

Credit cards are not "free money"

As of the beginning of the 21st century, Americans' credit-card debt was about $580 billion. "The average household has 10 credit cards, and the average interest rate is 19%. To pay each card off at the minimum monthly payment alone would take decades."3 Concerning credit cards, one study reports:

Credit card use often involves a disadvantageous allocation of finances because [credit cards] allow for spending beyond means and buying on impulse. Accordingly [credit cards] are associated with increased bankruptcy, anxiety, stress, and health problems. Mounting evidence from functional neuroimaging and clinical studies implicates prefrontal-subcortical systems in processing financial information. This study examined the relationship of credit card debt and executive functions using the Frontal System Behavior Scale (FRSBE). After removing the influences of demographic variables (age, sex, education, and income), credit card debt was associated with the Executive Dysfunction scale, but not the Apathy or Disinhibition scales. This suggests that processes of conceptualizing and organizing finances are most relevant to credit card debt, and implicates dorsolateral prefrontal dysfunction. 4

For some, credit-card spending is an addiction in need of treatment, as much as alcoholism, overeating or drug addiction.

At a certain point, debt with even a small amount of interest or usury fee will be nearly impossible to pay back, what to say of 19% or more annually? Even a few thousand dollars of such credit card debt could bog you down for many years. To students, a couple of thousand dollars of credit card debt may not seem like much - until they get into the real world. If you add in money for rent, food, utilities, phone(s), net, clothes, etc., it soon becomes overwhelming. Many people at that point go further into debt and are not able to get out of it.

How to reduce debt

How do you become debt free? There are many programs that offer assistance in this regard, and some of them are very good. Be careful, however, of scams, as there are plenty of those as well. The credit repair services are often not very good - if they work at all. And many of the debt counseling and debt consolidation companies are not non-profit but are owned by credit card companies.

Getting your finances under control can be a challenge. Not enough people, it seems, are taught or learn the basic skills of money handling or economics. The word "economic" comes from the Greek word "oikonomos," meaning "law of the house." It is with that fact in mind that you may wish to proceed with creating a better economical condition in your life. First and foremost, experts recommend that you learn how to budget. Some people find this task tedious and daunting, so it is further recommended that you ask for assistance. With some time and practice, budgeting becomes easier, such that you may not need to actually sit down and write out a budget but have developed a "feel" for it, for not spending more than you are bringing in. If you can get to that point, budgeting can actually be fun, as it orders your life and makes it more enjoyable.

It may help to look at your finances and budget as a puzzle, project or game. Do you enjoy figuring out puzzles or creating art? What about playing games? Involving others such as family in this project can increase the enjoyment of it. Budgeting can be a family affair, strengthening relationships and improving communication. Children may appreciate being kept in the loop and taught how to handle money effectively and responsibly. Instead of simply saying no when a child inevitably starts asking for things, you can explain to him or her that you do not have the money for it. It is probably better for children to understand that money does not grow on trees, that you are the source of their food, clothing, housing, toys and so on. Children may become curious as to how money is made and learn to handle it better. In other words, discussing money matters with children will demystify them and make them easier to understand and to master.

In most households, credit card use should be kept to a minimum, and experts recommend that you not charge more than you can pay off at the end of the month. That is common sense, but most people are unable to do so, especially with social pressure that encourages consumerism, such as "going all out" for holidays such as Christmas. It is estimated that the average American spends over $1,000 a year on Christmas, a significant amount for many families and one that no doubt puts many in deeper debt. While a few thousand dollars of credit card debt may not seem like a great deal, as it turns out when it comes to paying it off, even that relatively small amount may be daunting, especially if the size of a family or household keeps increasing. The reality is that in many cases even a few thousand dollars of credit card may never be paid off, if various changes are not implemented.

Using cash instead of credit is recommended for a number of reasons, not the least of which that it is impossible to get further into debt using cash, unless you have taken out a cash/payday loan, which is generally not advisable. Using cash can also increase your privacy, which is important to many people.

Experts next recommend that the debt itself be analyzed and reduced where possible. Some recommend debt consolidation, where others caution against it. Debt counseling companies are generally not non-profit but often work for credit card companies. Debt counseling companies may still be helpful, however, so some research into what agencies and organizations are the best is also advisable.

If you've gotten into financial trouble, availing yourself of the statement section provided on credit reports may be a good idea, although some experts caution against it.

It is further advisable to increase your income, if possible, in order to take care not only of past debt but also to prevent it and to make sure that you can cover basic necessities. There are many ways to increase income, although it is often not an easy task for many people. Counseling services, government and employment agencies, and online resources can all be useful in figuring out a way to increase income.

The last thing is to file bankruptcy, which used to be heavily stigmatized, then went through a period when so many people were doing it that it became less of an issue but is now more difficult again with the passage of legislation in recent years. While there should still be no shame in financial failure - famed carmaker Henry Ford, for example, filed bankruptcies a number of times before "getting it right" - the fact is that it doesn't feel good. And that is the issue when it comes to debt-related stress adversely affecting health.

If in fact you are able to accomplish all these things, you may actually find yourself in a position to start saving money, which is always recommended by experts. This last part seems the most daunting of all, particularly if your income just isn't up to par.

What about sickness?

There are times when people are simply not able to work, such as with age or illness. What do we do then? Asking for help - not necessarily financial assistance from friends and relatives, but support, as well as advice and assistance from the appropriate businesses, organizations and agencies - is a good place to start. In the case of people who are dependent for whatever reason, hopefully their caregivers are able to ask for assistance. It may not be an easy task, and nothing is 100% certain, but you can at least ask. The internet can be a very helpful place if you know how to use it. If you do not have internet access and cannot get to a library, hopefully you will be able to ask for help in doing at least a little research online.

It is a good idea to involve others, a trusted few, in your debt problems and attempts at relief. One of the more important aspects is emotional support. Anonymous but important support may be gotten online. Be careful, however, of giving out personal information online. Use vague terms to define your situation when asking for assistance and support online, and do not give out specifics or details.

Debt and health

Debt-related health problems include the following:

• high blood pressure
• obesity
• immune suppression or increase in colds and flus
• sleeplessness
• anger
• headaches/migraines
• heart problems
• nausea
• weight gain and obesity
• digestive problems
• inability to concentrate
• suicidal ideation and attempts.

Not having enough money is unpleasant and creates stress for all involved, including children, who may bear the brunt of an adult's money difficulties, including not only the lack of money but also any psychological struggles caused by it, such as depression, anger and moodiness. The money situation can seem overwhelming for many and, while it may not be the "root of all evil," the quest for money can be all consuming and can create seemingly endless problems. In order to have a smooth and peaceful life, it is important to iron out the money issue to the best of our abilities.

Improving other habits, including eating and drinking properly, as well as becoming active and fit, can help improve your finances as well, since it may allow you to think more clearly or to gain in energy, so that you may be able to work more often, harder or smarter.

If you feel it will be helpful to your health, by all means free yourself from debt! On the other hand, some people are not at all bothered by it, so long as they are behaving legally and ethically, and still others will have the ability to live fairly well while carrying a certain amount of debt. In other words, it is not advisable to beat yourself up or condemn yourself, as this could make your situation and stress worse. But, hiding in the dark and hoping the problem will go away is definitely not fun, nor is running away from creditors your whole life.

For more on money matters, please see Money & Business.