Keeping Your Debt a Secret Can Mess With Your Mind and Body

Vancouver resident Charlotte, 29, was “never good with money.” But she got her first inkling that something was really wrong when she was 22. Freshly graduated from university, living with her parents, she had a government job that paid $31,000 a year and none of it went towards her $25,000 worth of student debt.

Instead, she shopped. “Every paycheque it was like, OK, let’s go to the mall and buy something. Clothes, shoes, makeup, anything that was trendy at the time, I would buy it,” she said. Charlotte liked shopping before, but with a regular salary and no major financial obligations—other than the student debt—she dropped more than $2,000 a month on impulse purchases.

Charlotte, whose name has been changed to protect her privacy, ignored her credit card statements and didn’t bother to make even the minimum payment. She pretended that a lot of her monthly bills didn’t exist. When she needed more money, she racked up high-interest debt from a payday-style loan.

A year later, her debt problems intensified. Calls from collection agencies telling her to pay her credit card debt came several times a week. To this day, she still has seven numbers blocked on her phone—all debt collectors. Even though none of her friends knew anything was up, worrying about it was a burden.

“It was like a really stressful pain in my heart and my mind and my body,” she said. “I wondered how I would buy a house someday—not that I necessarily want to—but I felt this pressure. I just wanted to fix it.”

For a country where personal debt is so common, credit experts say we don’t talk about it enough. According to an Ipsos poll, 49 percent of people aged 18 to 34 carry debt. The latest government figures show that median millennial debt is $35,400.

Carrying this secret around, this “debt shame” about owing money, exacerbates debt stress. If left unchecked and untreated, it can actually push you over the edge financially and psychologically. A vicious cycle can play out; when you’re broke and anxious about it, but can’t pay for treatment, it can make it even harder to dig out.

When Charlotte was 25, owing nearly $30,000, her boyfriend, whom she had moved in with, convinced her that she needed to do something drastic. At the time, he was the only person she confided in about her money problems. He was carrying them financially and didn’t understand why she couldn’t contribute to their household expenses. “I was looking so fly and dressed so well but I couldn’t buy groceries,” she said.

There was no big argument or drama, but she knew she needed help so she started a debt repayment program. She felt instant relief, not only because she was finally doing something about her financial situation, but also because she was talking about it.

“It wasn’t until recently that I was able to have conversations about money. I didn’t feel comfortable telling people where I was at—it’s scary to admit,” she said.

Laurie Campbell, CEO of the non-profit organization Credit Canada that helps people manage debt through counselling, says our culture of secrecy around debt can feed a pattern of behaviour that spirals out of control. Charlotte’s vice, and temporary fix, was retail therapy.

“Addiction problems start to crop up—whether it’s drugs, alcohol, or even gambling—because individuals feel they need to escape reality and their situation. It’s a temporary fix and then of course it makes the situation worse because now they have debt from those addictions,” said Campbell.

“We see people who aren’t sleeping well, are having arguments with their partner or spouse. They’re stressed out at work. Some of them have to take a leave of absence from work because the debt is so overwhelming,” Campbell said. “We know that it makes people feel suicidal at times.”

Kitchener, Ontario resident Sean, 38, has taken two stress and anxiety-related leaves of absence from work. (His last name has been omitted to protect his privacy.) The auto parts service worker was diagnosed with depression in his early 20s. He has been carrying credit card debt on three cards since he was in his 20s but it was in his 30s that he says it took over his life.

“It’s hard to focus on your debt because you don’t care,” he said. “There’s days where it’s hard to get out of bed. There’s days where not killing yourself is the biggest thing—who cares about what’s in my wallet at the time.”

Sean says he’s lucky to have a supportive boss, whom he confided in recently. But the road to get a handle on his finances and his mental health has been rough. “I’ve gone through all of this stuff in the past year: mental breakdowns, time in the psych ward, my first panic attack,” he said.

A spike in borrowing over the past year in Canada has led millennials to unseat boomers in total debt. Credit reporting agency TransUnion said total millennial debt rose 12.3 percent to hit $515.9 billion in mid-2019.

U.S. millennials and Gen Z (ages 19 to 29) owed US$1 trillion in debt at the end of 2018, based on data from the American central bank—the highest total amount since late 2007 during the financial crisis. And the type of debt has changed; over the past decade, mortgage debt has climbed more than 3 percent but student loan debt increased by more than 100 percent, reflecting a trend towards delaying the purchase of a home and rising tuition costs.

Having a job that isn’t a cushy 9-to-5 is also a factor. People who don’t work full-time in an office and who juggle irregular hours are 33 percent more likely to develop a mental illness than the general population.

One of the largest Canadian studies examining debt stress, published in the Journal of Psychiatric Research, found a link between debt stress and mental and physical well-being. Nearly 70 percent of participants who had debt reported being stressed out by it. Another key finding is that “the associations between debt and psychological distress, overall mental health, and overall general health did not vary by gender, age, employment status, income, or education.”

Lead author Hayley Hamilton, a senior scientist at the Centre for Addiction and Mental Health, said that during her research, she came across reports of high blood pressure, ulcers, digestive problems, and severe anxiety associated with high levels of chronic debt stress.

“For many years there have been concerns about the level of debt and rising debt within our society and the potential impacts on well-being generally—not only with respect to finances, but health, relationships, friendships,” she said.

Campbell says people who are stressed about their debt to the point where it interferes with their ability to be productive need therapy as well as financial counselling. But that extra support costs money—unless you have insurance to cover it, or an employee assistance program (EAP) through work. If you can’t afford much, Campbell suggests finding free or low-cost services through government programs, non-profits, and social agencies.

At one point during the summer, Sean was seeing three specialists weekly: a psychotherapist (free through his company EAP), a psychiatrist (covered by the province because his doctor prescribed treatment), and a community counsellor (pay-what-you-can).

Sean also needs medication for his anxiety and depression, which costs $980 for three months’ worth. His insurance through work covers most of the cost, but he still has to pay $100 every three months out of pocket, which is another source of stress.

Even people who are making strides in conquering their debt can struggle with the emotional cost of delaying—and in some cases foregoing—life milestones, such as moving out of their parents’ home, dating, getting married, and buying a home of their own. One couple in their 30s admitted they are not trying for children right now until they’re better off financially. Campbell describes “a huge domino effect” limiting a young person’s ability to become independent and start their adult life.

Sean has moved out of, and back into, his parents’ home four times. He tried to get a line of credit from the bank to tame his debt but he was told he didn’t qualify because he spends too much of his income on rent. With expert help, he set up a debt repayment plan that he still struggles with.

Sean admits that his $10,000 of debt sounds manageable, but the fact that he hasn’t been able to shake it for years really got to him. “It’s a constant thing. For people like me, who overthink and are stuck in their head, it’s the kind of thing we dwell on. You can’t get away from it. It’s like a bad shadow,” he said.

Hamilton’s study didn’t examine the amount of debt that respondents had, but rather how they felt about it. According to her, $10,000 worth of debt can trouble someone who thinks about it all the time as much as $100,000 might to someone else who makes more. The amount of anxiety and suffering it causes isn’t necessarily tied to the dollar value.

Sean’s big fear is having some sort of setback that would make everything spiral out of control again. This past summer he had two surgeries on his appendix and abdomen which meant he couldn’t work for six weeks. “I called my dad and said, ‘I can’t catch up. I need help.’ So I’m 38 years old, having to borrow money off my parents just to stay afloat.”

Charlotte has managed to bring her nearly $30,000 worth of debt down to $9,000. The high-interest debt has been slayed and what’s left is mostly government student loans.

With the help of a professional counsellor, she combined different kinds of debt—federal student loan, credit cards, an outstanding cell phone bill—into one loan. She had one easy-to-understand and manageable monthly payment of $75. Even though her monthly payment was low, she often paid more than that minimum.

She also sold off assets—in this case, the vestiges of her retail therapy to pay down her debt. Using eBay, Craigslist, and even posting items for sale on Instagram, Charlotte made more than $5,000.

“Going through it sucks but you’re not the only person in the world experiencing debt issues. You need to figure out what your options are,” said Charlotte. “There are debt consolidation programs. If you have to do an insolvency, put your pride aside and just do it. Just walk into one of those buildings and someone will help you.”

Charlotte says she’s in a much better place now. “I only started feeling this sense of happiness with my purchases lately because now I save up for things to be able to buy them. Back in the day when I had issues with my finances, buying things just gave me a thrill but it didn’t make me happy,” she said. “I could still be better with my money but now I’m learning to understand the value of it.”

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