Christmas is a financial strain for everyone, with your social calendar suddenly fuller than it’s been all year, and a list of people to buy for that just seems to be never-ending.
Not to mention, your payday has been changed, meaning one month’s wage must last six weeks. This combination of a lot of money going out and not much coming in can result in financial worries. It’s tempting to turn to forms of credit to get you through the festive period but doing so will leave a debt that will still be there long after the decorations have been taken down.
Research from the Money Advice Service has found that British people are hiding £96 billion of debt from their friends and family. This worrying statistic can’t get any better at Christmas, where we often put on a front to friends and family about our finances. The effect of keeping up pretences is so damaging to our mental health, evidenced by a study by the Royal College of Psychiatrists in 2010 which found that half of UK adults in problem debt are also living with ill mental health.
How Does Debt Affect Mental Health?
A lot of debt related anxiety comes from a lack of support from lenders. If you are unable to make a payment or you’re late, you are often threatened with debt collectors and marks on your credit score before you are offered support. Worrying about debt can lead to a lack of sleep, which affects mood and energy levels.
Being in debt can make you feel:
- That everything is out of control, and there isn’t anything you or anyone else can do about it.
- Embarrassed to talk to anyone about your financial situation.
- Depressed or anxious.
What to Do if Your Debt is Affecting Your Mental Health:
If you feel this way, the first thing to know is that debt can be sorted out. The second step is to tell someone you trust about your debt – this could be a friend, colleague, relative or your GP. A problem shared is a problem halved, and you’ll feel less powerless. There are a lot of ways that you can tackle your debt – you can make a repayment offer, set up a debt management plan or ‘park the debt’ – a professional debt adviser will help you decide which is the best option for you and your finances. Some reputable organisations include your local Citizen’s Advice, National Debtline, Payplan and the Money Advice Service. Don’t be afraid to open up about your mental wellbeing – they won’t judge you as a lot of people feel stressed when they have money worries.
Poor mental wellbeing can lead to you making decisions about your finances that you didn’t intend to make. You might spend money to make yourself feel better or lose motivation to keep on top of your finances. When you’re feeling better, there are things you can do to get your finances back on track:
- Make a budget to keep you in control of your spending. The Money Advice Service has a budget tool that takes 10 minutes to fill out.
- You can ask the bank to add a note about your mental wellbeing to your credit file. This means that any future credit applications will need to be manually assessed but it doesn’t affect your credit score.
- Make it difficult to spend money online by removing your card details from websites. The act of stopping to get your card and put the details in will make you think twice about spending.
- Call an independent money adviser to discuss your situation and the next steps – you can call Money Advice Service on 0800 138 7777 or StepChange Debt Charity on 0800 138 1111.
How to Talk About Money
Talking about money is always difficult, but it’s the best thing that you can do to take control of your debt. You could plan the conversation in advance or if that is causing you to worry, bring the topic into an everyday conversation – maybe a TV character is going through financial difficulty. It could even be as simple as sharing money-saving tips with a friend and you might find that they’re struggling too.
Above all, remember that you’re not alone. Debt is stressful for everyone, but if you’re feeling depressed or anxious about your finances, take that first step and open up to someone – you’ll feel much more hopeful about your situation. The Money Advice Service recently launched the Talk Money initiative with the aim of encouraging money conversations.
For more information and guidance please visit – https://talkmoneyweek.moneyadviceservice.org.uk/.