Effects of Debt


Debt can have a very negative impact on many aspects of a person’s life.

No Money, Poor, Money, No, Crisis, Poverty, Debt, Empty

Debt can do much more harm than just damage your credit score so let’s make sure you avoid it all cost.

1. Impact of Debt

Debt can stop you from getting your dream house, it can be the reason why you can’t sleep at night and it can severely harm your mental health.

Poor credit score

Getting into debt weakens your credit score. A poor credit score can make it difficult to rent or buy a home. It can also cause you to have to pay a deposit when signing up for your Peco Energy provider as you will simply be labelled as less trustworthy.

Poor mental health

It is widely known that money is among the most common stressors. Debt causes anxiety, tension, irritability and even depression.


Debt is the source of many arguments between partners, causing mistrust, blame, shame and feelings of guilt. These negative emotions end up kicking love out of the relationship.

2. Common Causes of Debt

Debt consolidation or settlement can be of great help in eliminating debt but once you realize why you got into debt in the first place, you are half way towards solving your money issues. To avoid being consumed by debt, we need to understand the financial errors we made that got us there.

Reduced income

In today’s modern world, it’s too easy to spend more than you earn. The only way to ‘sustain’ that lifestyle is through debt and you get to find out that this kind of living is everything but sustainable.

Poor money management

Poor budgeting is almost like an invitation to debt. If you don’t track your expenses, you cannot ensure your cash inflow will be enough to cover them.

No savings

Life is filled with uncertainty and that means you have to plan for the unexpected. Unless you have a savings fund, any time an unexpected expense occurs such as a medical emergency, debt will be your only option.

3. Tips for Debt Repayment

Although the above mistakes are very common and easy to make, developing good money management can help you get out of debt. To begin with, debt repayment needs to be your priority that guides your actions.

Create a budget

Budgeting ensures you know where your money is going. By tracking your expenses, you get to identify areas where you can save money and maybe even eliminate a cost entirely.  

Step away from your credit card

You won’t get rid of debt if you keep piling up debt. Until you repay your debt, freeze all your credit cards so you don’t use them at all. If necessary, actually freeze them in the freezer to have a chance to reconsider using them by the time the ice melts.

Sell what you don’t need

Sell any items that don’t serve you or bring you joy. Even $5 per piece can add up.

Change your spending habits

Your daily habits are what got you into this mess in the first place. So, if you get a bonus at work, use it to repay your debt. Reconsider every want you have – do you need to get coffee on the go every day? Can you replace eating out by cooking at home and bringing the meal with you? In order to adopt any new habit, you need to reward yourself for a job well done from time so don’t forget to include a reward every time you reach a milestone.


If you can avoid debt, by all means, do. If you are already in debt, do your best to get out of it ASAP. Make debt repayment a priority and you will quickly see the light at the end of the tunnel. Financial difficulties can make life seem all doom and gloom so do your best not to fall into that trap and forget how beautiful life is. Don’t let debt have that kind of power over you.