Debt is depressing

On Monday, I paid off a car loan. Our modern practice of online commerce made that event rather anticlimactic. I wanted there to be a bit of pomp and circumstance surrounding the event. Maybe an awards ceremony with trumpets heralding the moment and confetti and balloons dropping from the ceiling…of the bank. I don’t want to have to clean that mess up.

I guess when I receive the title in the mail, I can find a way to celebrate. I’m told it will take about two weeks.

The reward system we have in our consumerist society doesn’t overtly acknowledge responsible financial habits. The car loan is a great example. When I bought the car with financing, as the saleswoman handed me the keys to my new(to me) car, she said, “Congratulations!” A new car congratulations from someone I had no prior relationship with and the reward center in my brain began to fire. Who doesn’t like to be congratulated?

The same thing happens with credit card purchases. There is no pain in taking out new debt, but the reward of that shiny new thing is immediate. It’s no wonder America has an addiction to debt!

In the UK, the Money and Mental Health Institute is trying to highlight the effects of this upside down pain and pleasure system on those with mental health issues. There research indicates:

  • Half (46%) of people in problem debt also have a mental health problem.
  • People experiencing mental health problems are three and a half times more likely to be in problem debt than people without mental health problems (5%).
  • 72% of respondents to Money and Mental Health’s survey said that their mental health problems had made their financial situation worse.

The cycle of mental health issues and debt looks like this:

diagram illustrating the relationship between mental health problems and debt

People with mental health issues are particularly prone to debt problems given the pain and reward nature of modern day debt. It’s not much different from the feeling many opioid addicts experience upon their first exposure to the drug.

“I felt like my brain just lit up.”

A friend and longtime colleague of mine was conducting focus groups for a state-sponsored advertising campaign to raise awareness of the opioid addiction problem and how to get help. While not an exact quote, this is how he described how addicts explained getting hooked.

The pleasure and pain signals for acquiring debt are such that for the addictive personality, the brain just lights up as the pleasure associated with taking on debt far outweighs the pain. Based on this survey of consumers by Clever, credit card debt is particularly pernicious.

Humanity has known this for a very long time:

The rich ruleth over the poor, and the borrower is servant to the lender.

Proverbs 22:7, KJV

There is no command here, just an observation by the writer. And it’s right. Being in debt is psychologically draining. For some, the crushing nature of debt manifests physically, even making breathing feel like work.

It takes discipline and a sense of purpose, but one of the most psychologically unburdening actions a person can take is to pay off his debts. You may not get trumpets, or balloons and confetti dropping from the ceiling, but the heaviness that surrounds you will lift.