The Impact of Debt on your Health

Household debt in the UK is growing and it needs tackling head on to a happier and healthier financial future. Debts have become a modern-day curse, with the cost-of-living crisis causing more and more people to struggle. However, a Healthy Debt Diet can guide you in the right direction to resolve these issues.

It’s time to bin the shame and guilt of spiralling out of control debt and build a fresh start!!!!

Health and Wellbeing

Dealing with debt can inevitably take a toll on both your mental and physical health. Experts suggest that the stress associated with managing debt can lead to more severe health issues than the debt itself. This is why it’s crucial to address your financial situation as soon as possible to mitigate these negative effects.

Bad debt tends to have a stigma attached and can lead to poor mental health as our finances can overwhelm us. People in problem debt are nearly three times as likely to have ‘bad’ or ‘very bad’ health.

Money and debt are a common source of anxiety and stress, affecting many aspects of our lives. Financial worries can quickly lead to poor mental health, as the two are closely linked.

In the UK, discussing debt can be uncomfortable, but it’s important to recognize that many others are also affected by debt concerns. The truth is, talking about it can reveal that you’re not alone. With soaring inflation, and the rising cost of living, this situation is all too familiar to many people and it’s not a failure to have some form of debt.

Remember - There is no shame in debt. My debt levels are here for all to see. I also have a string of financial regrets and mistakes I’ve made with money.

Struggling with mental health can make managing financial challenges even harder. It’s important to reach out to family and friends for support—there’s no shame in having debts. You might be surprised to learn that many of them have faced similar situations.

If you've got worries about debts and are desperate to make a fresh start in tackling your debt problems in 2025 then learn these becoming debt free tips.

Assess Your Situation

The first step in your journey to stopping debt overwhelming you is to Organise Your Debts.

When you have multiple debts, it can be challenging to decide which to pay off first. The key is to identify which debts are costing you the most money. Surprisingly, it’s not always the largest debt. Sometimes, a smaller debt can be more expensive due to high interest rates. Prioritizing these high-interest debts can save you more money in the long run.

To tackle multiple debts effectively, start by calculating the cost of each debt, including interest and other charges. List these debts in descending order based on their cost. Focus on paying off the most expensive debt first, while continuing to make minimum payments on the others. As you make extra payments on the highest-cost debt, you’ll reduce its overall cost.

Once it’s paid off, move on to the next most expensive debt. Although it might seem counterintuitive to not prioritize the largest debt, this approach minimizes your long-term costs.

If you consistently spend more than you earn, you might be caught in a debt spiral. This often means increasing overdrafts and growing credit card bills. Taking action now can prevent it from escalating into a crisis.

Are you finding it difficult to manage your essential expenses, such as credit card minimum payments, energy bills, and mortgage or rent? If your debts, excluding your mortgage, exceed your annual take-home pay after tax, you might be facing a debt crisis. While this can be overwhelming, there are non-profit debt counselling agencies that can offer support. Consider reaching out to organizations like Citizens Advice (www.citizensadvice.org.uk), StepChange Debt Charity (www.stepchange.org), or the National Debtline (www.nationaldebtline.org) for assistance.

These agencies can assist you in accessing the Breathing Space scheme, which provides a two-month period where all interest and charges on your debt are frozen, and you won’t face enforcement action from creditors. This campaign seeks to eliminate the stigma and shame associated with debt, so don’t hesitate to reach out for help. Remember, you are not alone.

A consolidation loan could potentially lower your interest payments and simplify your budgeting. However, they aren’t suitable for everyone so think carefully before deciding on consolidation loans.

What if I’m struggling with my mortgage?

If you’re having trouble with mortgage payments, it’s crucial to contact your lender before missing any payments, as this can negatively impact your credit rating. Lenders might offer options such as temporarily switching to interest-only payments or extending your mortgage term to lower repayments.

Read Dealing with Soaring Mortgage Costs for more advice if you are struggling with mortgage debt.

Review Your Budget

Consider carefully reviewing your budget to identify areas where you can cut back on expenses and make savings. Even minor savings can add up significantly over the course of a year which can save you hundreds of pounds annually.

There is a list of areas where you can make savings and reduce costs on Saving Money to Pay Off Debt.

Check for Any Benefits you can Claim

Take a few minutes to check if you’re eligible for any benefits and qualify for some assistance. Visit gov.uk for more information and advice.

Mental Health and Financial Well-Being

Financial stress can take a toll on your mental health. It’s important to take care of yourself during this time:

·         Stay Connected: Reach out to friends and family for support. Talking about your situation can help relieve stress.

·         Practice Self-Care: Make time for activities that you enjoy and that help you relax.

·         Seek Professional Help: If you’re feeling overwhelmed, consider speaking with a mental health professional.

If you are struggling with money and Facing Financial Hardship, then there are measures you can take to rebuild your life and finances.