At the end of my last column, I briefly mentioned the impact of debt on our psychology – and here is the detail. If you know of someone in debt, share this as it will give them hope.
If you’ve ever carried debt, you’ll know it’s not just numbers on a spreadsheet or a balance to clear. Debt can feel like a dark cloud looming over your daily life, pulling at your mind in ways you might not even notice.
The ‘Human Givens’ approach shows that for us to thrive, certain innate emotional needs must be met. These include things like security, autonomy, achievement, and a sense of connection. If debt undermines these needs, the impact is profound. One need not being met can ensure we suffer significant distress and have big foggy heads - it’s natural. Don’t fret. Just act.
One of the most fundamental human needs is the feeling of safety – that sense of a solid ground beneath your feet. Debt threatens this by creating constant uncertainty.
“Can I pay my bills next month?”; “What if interest rates go up?”; “Will I ever escape this?”.
This persistent worry triggers your autonomic nervous system into a state of fight or flight – the body’s natural stress response, with a mindset of lots of ‘what ifs’ taking over your mind’s ability to reason properly - it’s natural, don’t fret. Act.
Chronic stress, as neuroscientist Dr Andrew Huberman highlights, drains you of focus, energy, and clarity. You’re not just paying for debt with money; you’re paying for it with your peace of mind.
When you reduce or eliminate debt, you reclaim that sense of safety. Suddenly, the ground feels firmer, and your nervous system can relax. Clarity returns, and so does calm.
Debt has a way of stealing your sense of freedom.
When you begin to clear debt, something incredible happens. You shift from feeling like life is happening ‘to’ you, to taking active control. Each step out of debt reinforces this sense of mastery. The process itself becomes a reclaiming of autonomy, which is central to mental wellbeing.
As the psychologist Albert Bandura explained, the belief that we can shape our circumstances – known as self-efficacy – is key to mental resilience. By tackling debt, you’re actively proving to yourself: “I’ve got this. I can shape my future.”
Debt can feel like a treadmill – you’re working hard but getting nowhere. That sense of stagnation is demoralising because we all need to feel like we’re achieving something meaningful.
Paying off debt creates a powerful sense of progress. Each cleared payment becomes evidence of achievement, a tick on the mental list that says, “I’m moving forward.” This momentum matters.
As I said last week, any movement in you, no matter how small, towards improvement, is stronger than any storm you will face, as it’s an expression of hope, of desire and of your control. Tie your laces and move on.
According to the Human Givens approach, when we have a purpose to work toward, even if it’s clearing a credit card, it provides direction. It shifts focus from despair to opportunity.
Debt doesn’t just weigh on your mind; it affects your relationships. Financial strain can create distance, shame, or conflict between loved ones. When you’re anxious about money, it’s hard to connect fully with others – you’re distracted, irritable, or withdrawn.
Clearing debt lifts this emotional barrier. The space once consumed by worry can now be filled with meaningful connection. Relationships become richer because you’re present again.
On a neurological level, reducing debt provides a reset. Stress hormones like cortisol fall, and your prefrontal cortex – the brain’s rational, clear-thinking centre – regains control. In essence, you’re no longer living in survival mode.
This allows you to think longer-term, make better decisions, and nurture yourself in healthier ways. Whether that’s saving for the future, investing in self-care, or pursuing dreams that once felt out of reach – the mental freedom is profound.
The Human Givens teach us that when our essential needs are met, we thrive. Debt, by its nature, disrupts this balance. Reducing or eliminating it isn’t just about finances – it’s about freeing yourself to live fully. It’s about reclaiming security, autonomy, achievement, and connection.
As the debt weight lifts, you’ll discover something incredible - life feels lighter too.
- Peter McGahan is chief executive of independent financial adviser Worldwide Financial Planning, which is authorised and regulated by the Financial Conduct Authority. For advice on mortgages or debt, call 028 6863 2692 or email info@wwfp.net
