The Emotional Cost of Debt: Why Owing Money Is More Than Just a Financial Problem

6 am. I woke up feeling sick to my stomach. Today would be my 7th shift in a row. I made a financial mistake after watching TikTok videos about investing. I was a young nurse chasing the American dream. I graduated from college, got a stable job, and soon after: a brand-new car, a brand-new house, vacations, and almost half a million dollars in debt.

Both my parents were bad with money and accumulated debt from gambling. I wouldn't have been able to attend college if it weren't for my grandmother. And my brothers in Vietnam wouldn't have been able to finish high school if I hadn't worked full-time while attending. I learned a great deal in college, but I wasn't fully equipped to enter adulthood. I didn't get a basic financial education in high school or college. At that time, all the resources I could turn to were Google and social media. I was too naive to realize that social media is more like e-commerce than education. It’s a place where people make money off other people's attention.

Debt isn't just a money problem

I was drowning in debt, working hard yet still living paycheck to paycheck with no savings, no emergency fund, no stability, and no peace of mind.

I quickly learned that debt was not just a financial problem. It's an emotional burden that causes physical and mental burnout, and picking up multiple extra shifts per week wasn't sustainable. I was physically exhausted and emotionally spent. When it rains, it pours. I got sick and had to take three months off. No incoming paychecks, a forbearance agreement signed with my mortgage company, late payments on credit cards, and phone calls flooding in from creditors.

I thought I had lived the American dream. I was so excited to sign those loan contracts for my car and my house, but I came to realize before long that all I wanted was peace of mind. I didn't want the anxiety every time my phone rang from an unknown number. The restless nights watching my credit score free-fall. The shame that my grandmother would be disappointed. The worry about whether my family would need my help, and I wouldn't be able to give it. It was so embarrassing when my card was declined at the grocery store. I felt a tightness in my chest when my brother called and asked if he could take a graduation trip with his friends. And the isolation experienced when I stopped going out with friends because I was afraid I couldn't afford my half of the bill was crippling.

That isolation felt like watching life pass me by while I was left behind, alone. At first, it was a relief — I was saving money, at least. But then it hit hard when the invitations stopped coming. I felt forgotten. I lied to myself that I didn't need friends. I started to resent them, thinking friends are only there during the good times. I pulled away from the community I once shared memories and laughter with. They seemed to have everything together, and I was falling behind in life.

The mental health toll of carrying debt

Carrying debt can be physically exhausting because you have to work more. You lose the healthy balance of life and work, and you lose the sleep your body needs to function. It's also emotionally exhausting because you are constantly worried about the what-ifs and ashamed to talk about it.

If you are seeing a therapist for emotional stressors while you have significant debt, the debt may be playing a much larger role in your mental state than you realize. It did for me. I used to think of myself as a failure because of my financial mistakes. The shame haunted me until I met a senior nurse who was kind enough to share her own story about how she, too, had struggled with debt when lifestyle creep caught up with her.

Everyone experiences debt differently, depending on the type of debt, how much you carry, and your ability to pay it back. A systematic review published in April 2026 in the National Library of Medicine found across multiple studies a strong connection between debt and mental health issues, including anxiety, depression, and suicide. The review concludes that action and reform are needed to reduce the psychological burden of debt and to support individual well-being holistically.

The financial education gap that keeps people in debt

According to the Federal Reserve Bank of New York, total household debt in the US reached $18.8 trillion by the end of 2025, driven by rising mortgage, auto, and credit card balances. And according to the 2025 TIAA Institute-GFLEC Personal Finance Index, US adults correctly answered only 49% of basic personal finance questions — a figure that hasn't budged in nearly a decade. This isn't a personal failure. It's a national gap.

If only I could go back and tell my new-grad self everything I didn't know: the basics of home buying, amortization (the process of paying off a loan through scheduled payments over time), property taxes, interest rates, risk management. She was smart and incredibly hard-working. But she didn't have the guidance needed to survive in a world that constantly sells you things, where banks have developed sophisticated tactics to get people into consumer debt.

One thing I wish I had known before signing a loan contract is its true cost. Lenders often advertise the interest rate because it's the lower number; it distracts you from the APR buried in the fine print. The interest rate is the cost of borrowing the principal amount. The Annual Percentage Rate (APR) is the true cost of borrowing, including the interest rate, origination fees, closing costs, broker fees, and other charges, expressed as a yearly percentage. I learned this the hard way when I ended up paying far more than I expected. Once I understood the difference, I started using APR to compare lenders and never signed another loan contract without reading the fine print.

Your net worth is not your self-worth

Once I learned that my net worth is not my self-worth, I found peace with myself and gratitude for these lived experiences. My grandmother was never disappointed in me. And my friends and family never judged me when I opened up about the physical and emotional toll debt had taken.

I turned to books by credible authors for financial education and kept social media for entertainment only. One of my favorites is The Psychology of Money by Morgan Housel. For many of us, money is abstract, like an iceberg; all you can see is the tip, but the rest is massive and hidden beneath the surface. Housel explains that real wealth isn't loud or hyped up. It's quiet, and it takes time. Wealth isn't what you see — the expensive cars, the big houses, the Instagram photos. It's the freedom to wake up and say: I can do what I want today.

Taking the first step toward financial and emotional relief

As you live and learn, it is never too late to take action. The first step is cultivating an awareness and understanding of how debt affects your mind and body, not just your bank account. Debt doesn't only carry an APR; it also carries an invisible cost that nobody tells you about when you sign a loan contract for something you can't really afford.

I started tracking my income and expenses. I decided to downgrade my car, rent out my house, and move to another city for a higher-paying nursing position. I lived frugally in a studio apartment, saved up $2,000 for my emergency fund, then paid off my credit cards one by one. It took time, discipline, and determination. It felt like going on a diet and starting to exercise after years of overindulgence — not easy, but necessary. Just as you wouldn't lose weight overnight, I didn't change all my money habits at once.

My method was simple: I took it one day at a time, one task at a time. Now I have the peace of mind I once craved, a six-month emergency fund in a high-yield savings account, and my only debt is a mortgage being paid by long-term tenants. My retirement accounts are funded every month. I save for my yearly international trip and no longer take vacations on credit cards.

If you didn't come from a family with financial fluency, got into debt chasing the American dream, or have been carrying the emotional and physical toll of it, you are not alone. And you don't have to figure it out alone either. A Fruition Mentor can help you think through where you are, what your options look like, and what a plan that actually fits your life might feel like.