First Person: Getting Out of Debt Cured My Depression

Yahoo Contributor Network

Getting out of debt can chase away the blues. New research, according to a recent article by LearnVest, pinpoints just how debt can lead to depression in the first place. A new study by Boston University's Financial Security Project, found that for every 10 percent increase in people's debt, their symptoms of depression increased by 14 percent. Interestingly, debt has nothing to do with actual clinical depression. Rather, it relates to the somewhat more benign day-to-day blues.

Paying off my credit cards

After I got out of debt at age 30, I spend the following 10 years learning to live within my means. I didn't get rid of all of my credit cards as some experts recommend. Instead, I primarily used my debt card. I also used one credit card, but paid off the balance every month. I use my online banking to pay off any credit card charges right away. I noticed that a heavy burden is lifted whenever I make my online payments. I like the instant gratification of paying off a charge right away, rather than having to wait until the end of the month for the credit card statement to come in the mail.

Believing in good debt, again

For many years, I did not believe there was any difference between good debt and bad debt. However, this new study has changed my thinking. According to researchers, there are more dramatic psychological effects related to credit card debt, which has traditionally been considered the "bad debt." Long-term debt such as mortgage debt and student loan debt or the so-called "good debt," does not have the same negative effects on a person's mood. I may focus more on staying out of credit card debt rather than worrying so much about whether or not I pay off my mortgage in 5 years.

Spending money on indulgences

Some financial experts recommend people give up the little indulgences in life so they can save more money for their retirement. I do believe in the latte factor, which suggests saving that $5 a day instead of purchasing a gourmet coffee. At the same time, it's truly depressing to give up all of my treats. I am finding as long as I save money and avoid using my credit cards, I can still afford to treat myself every day. I am feeling happier now that I'm spending a little bit of money every day on things that bring me happiness.

Racking up credit card debt used to make me feel good in the moment, but then I dealt with feelings of guilt and depression. Now I get a high by saving and investing money. Although I'm somewhat disappointed when my stock investments go down in value, I take a long-term perspective. I rather deal with occasional dips in my retirement accounts rather than constant dips in my mood because of reckless spending.

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