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Debt And Mental Disturbance

Why do we get into trouble by having too much debt? There are several factors contributing to the problem. One main reason is because we have plenty of desires, unfortunately with less amount of resources. Debt sometimes is unavoidable. For example, if we want to buy a house, we need to get a loan due to the fact that paying in cash is almost impossible. Well planned debt is not a big issue. Carrying too much debt, without proper financial plan and management may lead to serious psychological issues, such as stress, depression and so on. As we know, the desire to own materials never ends. We might underestimate the risk of being tied to debt and even miscalculated our spending every month. The most important thing is to have a personal constraint and rationale thinking while dealing with temptation.

From psychological point of view, the reason why we fall into financial trouble mainly because one’s attitude in managing money. Some people tend to pay less attention while dealing with debt. Spending lavishly and fail to make a necessary plan in personal budgeting to the debt issue. In addition to that, failure to assess personal financial capacity before agreeing to financial commitment also is a contribution.

It is important to have proper financial plan before deciding to make a loan. Knowing the capacity to repay the lender, find out whether the loan is profitable enough or whether there is an actual need to proceed for the loan. Whatever it is, careful planning is needed whenever dealing with financial commitment.

Manage Your Spending

Budgeting is not fun. No, it is not. That is why some people tend to spend thriftily and don’t consider the consequences afterwards. In addition to that, some people tend to judge those who are very calculative in spending as stingy.

Why do we need to do personal budget? Personal budget enables us to assess our own personal financial capacity, saving money for the purpose of buying items or a preparation for any possible mishaps in the future. This will help us to discipline ourselves when dealing with money and avoiding us from getting into trouble due to debt difficulties or being pressured by lenders.

The most important reason why we do budgeting is because it enables us to have clear distinction between our needs or desires. Here the need refers to a buying made for survival, such as foods and clothing. Meanwhile desire is a spending beyond the purpose of actual need. For example, buying clothing for the purpose of trend or brand.

In order to do budgeting, one must divide the expenses into several categories, such as savings, monthly expenses, including mortgage/ rent, utilities, car maintenance, credit card/ debt payments or medical expenses and finally for personal leisure or vacation. If the budget is done properly, one will be able to manage his or her finance effectively and avoiding emotional issues relating to the debt problems.


Let’s say you decided to buy a brand new phone. Looking at the price, it costs more than you can afford. What will you do? Would you pay from your savings or use your credit card? As for the first choice, you need to patiently hold your desire. Before you can get the item, you need to save some money. As for the second choice, you may get the item sooner but you will be tied to financial commitment. Those who has high discipline, does not want to be tied to financial commitment and will opt for saving.

What are the benefits of saving? First of all, it will set you free from financial burden. It will make your life happier for sure. Other than that, saving can be used as an investment to generate more money or can be used in retirement days. To do saving, one must save in a low-risk financial institution. This will help us to gain some profits from the investment and at the same time making the objective of the saving achievable.

Effect of Debts to the Mental Health

Carrying too much debt could give significant effect to an individual Over-indebtedness affects a person’s psychological well-being by disrupting the cognitive and emotional aspects. This will lead to severe stress, anxiety and finally depression.

There are many psychological factors why people get into debt problem, such as personality and one’s attitude towards personal financial management. There are many researches that have shown correlation between carrying too much debt and depression. Those who struggle to pay off their debts are most likely to get emotional disturbances such as anxiety and depression. Because of the debt is a long-term financial commitment, the individual will always be in constant state of worrying. Unless and until the debt is paid or the commitment is reduced, people with high debt will experience severe anxiety. For that, one needs to have a strategic approach in managing debt.

There are many ways to manage debt stress, for example by changing the way of thinking. As for the debtor, the first thing is to accept the fact that he or she is in a debt crisis. This will help the debtor to realize that something needs to be changed and he or she must be determined enough to do the changes. Such acceptance enables the debtor to recognize and overcome negative thinking associated with debt, such as ‘it is impossible to change the habit’ or ‘This won’t last long. I will finally fall into debt trap sooner or later’.

Secondly, after the acceptance issue has been resolved, one needs to seek help from a counsellor, to deal with emotional issues and to deal with changes. Financial help in the form of counselling from Bank Negara’s Credit Counselling and Debt Management Agency, better known as AKPK will assist the debtors in managing debt accordingly.

Thirdly, one needs to manage stress effectively. As the debt stress is growing, one tends to behave or reacts in a non-productive ways including secluding him or herself from others or showing no interest to normal activities. Such behaviours are not really helpful in dealing with the stress situation. One needs to change his or her way of thinking so that the focus will be diverted to positive behaviours such as exercising or pursues hobbies and also healthy diet intake. Such activities will generate positive emotion and it will help in solving the issue effectively.


Financial management can help individuals managing their monthly spending wisely. This in turn will avoid you from getting into being over-indebtedness. Being tied to the debt will affect the mind and behaviour. Manage our money wisely to ensure a positive mental health.


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  2. Agensi Kaunseling dan Pengurusan Kredit, Bank Negara Malaysia, retrieved from akpk.gov.my
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