The Psychology of Being in Debt

Financial Info

Unless a person has an executive level job, they probably only get a modest income. So the only way that they can cover all their expenses is to save money from each paycheck to apply it to their bills. This requires a lot of self-control though. It also means that they have to say no to going out to eat, nights out with their friends, and shopping trips. So what most people do is charge the extra expenses on their credit cards. This excess spending continues because it serves several psychological purposes.

Higher Status

Spending a lot of money makes a person seem to have a higher status in society that is usually only reserved for the wealthy. This increased status affects their position among their peers. It helps them to gain power and respect that they normally couldn’t attain, so they feel like they belong.

Increased Attractiveness

Excess spending also contributes to how attractive that others perceive a person to be. A relatively unattractive person with asymmetrical features usually struggles to get dates or find a suitable partner. But this changes when they confidently fork over their credit card regularly. So some people might spend excessively if they perceive themselves to be unattractive.

More Confidence

True confidence is derived intrinsically. It comes from a belief in one’s ability to handle specific situations. A person might not be confident in every situation of their life, but once they get through one that is specifically challenging in a successful way, they will know that they are capable of handling it. The more challenges that someone completes successfully, the more confident that they will become. But if someone struggles with confidence in an area of their life that they haven’t yet mastered, they might feel depressed and anxious about it. So they will often find a way to relieve this discomfort by creating a false sense of confidence through expensive cars or fancy houses that they can’t afford.

Escape From Poverty

If a person has been bullied because they lived in poverty as a child, they might spend excessively as an adult to make up for the sense of security that they didn’t have before. This happens more often to adults who have painful memories of not having enough food or warm clothing when they were little. They often have closets full of items that they never wear and cabinets of overflowing food. Buying so many things doesn’t just cause financial stress though, it puts them at risk for becoming a hoarder.

Relief From Painful Emotions

People also use debt to boost the way that they feel. It becomes something like a security blanket that a child might carry with them. This is especially common in people who shop for new things when they are lonely or having a bad day. They know that they don’t need another television or a new pair of shoes, but their anxious thoughts are too uncomfortable to deal with though. A hug or a kind word from a loved one or a friend would soothe them much more than any object could. But if someone doesn’t have anyone to comfort them when they are feeling down, the new objects temporarily replace the happiness that is missing in their lives. Of course, this feeling is short-lived when the bills for all their purchases comes in at the end of the month because they didn’t stop overspending.

1 thought on “The Psychology of Being in Debt

  1. There is often a feeling of helplessness when you are in debt, especially if it’s a large amount. It feels overwhelming and you’re not sure if you will ever be able to pay it back. A lot of this is psychological, so having access to a counselor (hopefully free) can be a godsend.

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