Module 3.1: The psychological toll of debt

Module 3.1: The psychological toll of debt

Examine the psychological research on how being in debt may cause anxiety and dread. Explore several ways to motivate yourself to get out of debt.

Competency: Jump$tart Coalition (2015), Credit and Debt: “Standard 3. Apply strategies to avoid or correct debt management problems” (p. 17).

Being in debt hurts. Consider the following evidence:

Senior citizens report stress and uncertainty from credit card debt related to medical expenses and low income (St. Pierre & Shreffler, 2013).

In a study by Mueller (2014), one-third of early-career psychology doctoral graduates said they would not have pursued their Ph.D. or Psy.D., had they known how much student loan debt they would wind up with.

Many homeowners who were victims of subprime lending and dishonest mortgage brokers developed deep-seated fears, anxieties, and loss of personal trust (Ross & Squires, 2011). The “American dream” became a nightmare for them.

Hannah, Yuh, and Chaterjee (2012) found that as of 2007, over one-fourth of American households pay more than 40% of income to essentials (debt service, housing, and cars). More educated people are actually more likely to carry greater debt. This burden can be very demoralizing.

How can you motivate yourself to get out of debt? If you employ the strategies in this course, after having some early successes, you will likely become more motivated to continue learning and applying financial skills. You can, of course, be motivated by intrinsic desires to master financial skills, or by performance-oriented desires to outperform your peers (Ames, 1992). This motivation will likely change during your life, as circumstances change. However, realizing your ability to change and grow will help you stay motivated, even when no one else cares about your financial situation (Dweck, 2006).



Ames, C. (1992). Classrooms: Goals, structures, and student motivation. Journal of Educational Psychology, 84, 261–271.

Dweck, C. S. (2006). Mindset: The new psychology of success. New York, NY: Random House.

Hanna, S. D., Yuh, Y., & Chatterjee, S. (2012). The increasing financial obligations burden of US households: Who is affected? International Journal of Consumer Studies, 36, 588–594.

Mueller, T. (2014). Changes to the student loan experience: Psychological predictors and outcomes. Journal of Student Financial Aid, 43, 148–164.

Ross, L. M., & Squires, G. D. (2011). The personal costs of subprime lending and the foreclosure crisis: A matter of trust, insecurity, and institutional deception. Social Science Quarterly, 92, 140–163.

St. Pierre, E., & Shreffler, K. (2013). Credit card usage among older adults: Assessing financial literacy and pressures. Journal of Extension, 51(3), 1–10.

By Richard Thripp