The vicious cycle of depression and debt

·9-min read
Photo credit: Jessica Lockett | Getty Images
Photo credit: Jessica Lockett | Getty Images

I used to dread the week after payday. Because by then, I would have already spent my salary in its entirety.

While I could attribute some of this to overpriced accommodation, a lack of financial education and poor impulse control, a lot of it was more specifically related to how I felt about myself.

Back in my early twenties, I had the sort of hole in my life that only those who have experienced depression will be familiar with. This gnawing need for something that is impossible to articulate, a pang of hopelessness. And, like a lot of other people with mental health issues, I filled this hole with stuff.

I would ignore my growing overdraft and walk through H&M, staring at dresses I’d never wear, shoes that didn’t quite fit and I’d somehow end up leaving with all of it. A rush of guilt and giddiness would wash over me as each bag was unceremoniously jammed into my overflowing wardrobe. Next to it: the suit I’d bought during my last haul. The same suit I hoped would make me feel powerful, still wrapped in the shop bag. As I forced the doors shut, a pile of precariously placed letters - several marked urgent - would slide out of the cupboard. I’d throw them back in, the door firmly closed.

During one post-payday gloom, I realised I didn’t have enough money for my Oyster card, meaning I was leaving for work an hour earlier than usual. I ate crisps for breakfast, lunch and dinner. I couldn’t get over my own stupidity and I hated myself for it.

Photo credit: Jessica Lockett | Getty Images
Photo credit: Jessica Lockett | Getty Images

It's no coincidence that one in four people living with a mental health problem experience debt. The impact of living with debt alone can lead to depression, while the symptoms of depression can make financial issues inevitable. In fact, more than 100,000 people attempt suicide every year because of debt. And, lockdown hasn’t helped. The Money Mental Health Policy Institute estimates that online shopping has left over three million people with mental health problems facing debt.

“Money and mental health are intrinsically linked, and mental health issues can be both a cause and a consequence of problem debt," explains Sue Anderson, Head of Media at leading debt charity, StepChange. In 2020, half of the charity's clients had additional vulnerabilities - including mental health conditions such as depression - on top of their financial issues, which can make money worries harder to deal with. Previous research from StepChange found that, compared to non-vulnerable clients, vulnerable clients were far more likely to be in arrears on a household bill, and among those with mental health conditions 2 in 5 said their illness was the main reason for their debt.

While I remained on the waiting list for counselling, retail therapy was both my source of joy and secret shame. In just over a year, I realised that I’d racked up over £4,000 of credit card debt. All I had to show for it was a bulging wardrobe and some blurry photographs taken in a club. Whenever I felt bad about myself, I would simply buy something; a dress that would make me feel more confident, or a pair of trainers that would magically encourage me to lose a stone. As the letters became more and more frequent, the phone calls started too. I became terrified of answering the phone.

I finally broke down and told my boyfriend (who, ironically, is an accountant by trade). He was horrified but supportive, gently highlighting how this could impact our future. ‘This’ being the joint bank accounts that I would run to nothing; the house we could never buy with my abysmal credit score.

Photo credit: Jessica Lockett | Getty Images
Photo credit: Jessica Lockett | Getty Images

Unfortunately, debt feeds both from and to depression. Even if you’ve never experienced poor mental health, there are high chances of developing it as a result of debt. In fact, prior to her financial problems, Sophie*, a 29-year-old based in London who currently owes £6,500, had never experienced poor mental health.

“It started with my student overdraft. Everyone was always in theirs and I thought it was normal to have nothing at the end of the month. It didn’t bother me for a few years, but once I lost my student overdraft, I moved to credit cards. I went out, and kept up with my friends at meals out and hen dos. But, at the start of COVID, I lost my job. All my colleagues seemed to have a ‘rainy-day’ fund, but I had nothing. I stopped eating and sleeping. For the first time in my life I didn’t want to see my friends.”

Sophie’s debt overwhelmed her, but she didn’t feel like she could talk to her family or friends because she was embarrassed. “There were days where I wanted to end my own life, just so I didn’t get another letter.”

Sophie eventually explained her situation to her parents. “They were so worried about me. I couldn’t stop crying. They were disappointed I’d let it get to this stage, but we’ve set up a plan and some family chipped in to help. My credit score is terrible though. I dread meeting a partner, knowing that I’ll have to explain how bad things got. I have a CCJ [a County Court judgment which is an order telling you to pay money you owe] now which will obviously make buying or renting somewhere tough.”

Clare Seal, author and financial writer who documented her struggles with debt on Instagram as My Frugal Year, explains that Sophie’s situation isn’t rare. “It’s a bit chicken and egg when it comes to debt and depression. It’s so easy to accrue debt and so hard to pay it off. While taking accountability for our debt is important, in my experience people with debt take far more accountability than necessary. They feel worthless and the shame around debt kicks in so early that it’s tough for them to see a way out.”

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In a reverse cycle - as I experienced - debt can also start with mental health. “I’m okay with money when I feel good, but I live in central London on an intern's wage. I coped alright until the last lockdown, when I really struggled,” says Sian, a 25-year-old living in London. “At university, I was always in my overdraft. I thought that by now I’d be in a better position financially, but when I’m down, I really struggle with spending. I see stuff online and imagine feeling different with that product.”

Clare isn’t surprised by Sian’s story either. “The pandemic has been devastating for almost everyone and compulsive spending has been one of the only coping mechanisms available for a lot of us. We see in the media and our social channels that everybody is buying houses and having kitchen renovations. And we’re struggling to pay our bills. Our whole economy is built on advertising that makes people feel like they’re lacking - then we wonder why people spend outside their means.”

Emily*, 26-year-old from Birmingham has struggled with overspending during the last few years. She currently owes around £4000 and experiences anxiety and depression sporadically. “I work in social media, so I'm always seeing stuff I want to buy. I might not even need it, but the act of shopping itself makes me feel better. When I get low, I end up ordering piles of books I won’t read, clothes I won’t wear and make up I don’t even really use. I hate myself for it. But, it’s the only thing that cheers me up sometimes. I know I’m really bad with money - I’ve sort of given up trying to fix it.”

Photo credit: Jessica Lockett | Getty Images
Photo credit: Jessica Lockett | Getty Images

Clare explains that ‘not being good with money’, can sometimes be a self-fulfilling prophecy. “Have you ever met someone that was good at something after they said ‘I’m terrible at this’, every day?” she poses. “I think we need to move away from good and bad terminology altogether. It’s a sort of knee-jerk response where you undermine yourself.”

After my talk with my boyfriend, I tore into every letter I’d ignored from the confines of my leaky London bedroom. I calculated every outstanding payment, working out what I could pay off first. And it led to some big decisions. I moved back to my hometown of Manchester and a year and a half later, I was debt free.

“Overspending is often a symptom of a difficult relationship with money. Getting in tune with how you’re feeling makes a huge difference,” Clare explains. “For me, creating a spending log and journaling really improved my relationship with money. Rather than shopping my feelings away, I wrote them down. We’ve all been in that place, where we feel like our debt is hopeless and unfixable. But the first place to start is changing how you think about your relationship with money.”

I finally started therapy and the act of talking about how I felt about money was a game changer. I started realising that I was terrified of opening my bank account. I found money terrifying. It was hard to acknowledge that the relationship I had with money was broken, that it was so linked to my depression and sadness. A need for something to fill the gaps I had in my self-esteem.

It’s the week after payday today, and my bills are paid. There’s money in my bank account. When I get into a depression cycle now, I find myself religiously checking my account. I still fear being in debt. Society has progressed in terms of depression awareness, with endless campaigns imploring us to reach out and talk. But when the underlying cause of depression is debt, a loud silence follows.

Like most things though, a conversation - just like this one - is a start.

For anyone feeling overwhelmed by their financial situation, help can be found on Stepchange, or by calling 0800 138 1111

*Names have been changed

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