Remember the human side of debt

Debt is not just a number on a balance sheet, but a burden many South Africans carry daily that affects their overall health and quality of life.

It ends up being the only thing you can think about at work, at home and when you are supposed to sleep at night.

Ayanda Ndimande, head of business development at Sanlam Credit Solutions, says there is an intricate relationship between debt and mental and physical wellness.

“Debt is an emotional weight that affects every aspect of our lives. As we navigate these challenging economic times, it is crucial to recognise that behind every debt statistic is a human story of stress, anxiety and often silent struggles.”

However, she says, it is also a story of resilience and the potential for positive change.

“By understanding the human side of debt, we can develop more compassionate, effective solutions that relieve the financial burden and improve the overall well-being of individuals and families.”

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Watch out for the emotional triggers of spending

Ndimande says one of the key factors contributing to the debt cycle is emotional spending, which often stems from various triggers in our daily lives.

South Africans already grapple with mental well-being, scoring one of the lowest mental health scores in the Mental State of the World 2022 report. 

“Emotional spending occurs when we buy things in response to our feelings rather than out of necessity or careful consideration of our budget.

“Common triggers for emotional spending include peer pressure, sadness, loneliness, boredom and even stress or anxiety, like having a bad day at work and driving straight to the mall to spend money to feel better.” 

She says emotional spending is also not always due to negative emotions.

“Sometimes, we impulsively spend when we are happy, celebrating, or because of sales promotions. However, I strongly recommend anyone feeling overwhelmed by debt-related stress to contact the South African Depression and Anxiety Group (SADAG).”

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The physical and psychological cost of spiralling financial stress

Ndimande says financial stress can contribute to negative money behaviour, creating a vicious cycle. For example, emotional spending resulting from financial stress increases our reliance on credit, leading to a short-term focus on prioritising immediate gratification.

“This short-term thinking can lead to deeper debt and more significant financial problems in the future because people do not prioritise their long-term financial health.”

She points out that the impact of financial stress extends beyond our bank accounts, manifesting in physical and mental health issues.

“Prolonged financial strain can lead to a range of health problems. We often see increased depression and anxiety rates and even physical ailments among those struggling with debt.

“The regret and shame associated with poor financial decisions can exacerbate these issues, creating a cycle of stress and poor health.”

These health issues can create additional financial burdens, perpetuating the cycle of stress and debt.

“It is a complex interplay between financial, mental and physical well-being. Addressing one aspect requires acknowledging all three.” 

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How to regain control of your financial wellness

While the situation may seem overwhelming, Ndimande emphasises that it is never too late to turn things around. She encourages consumers to seek help from a trusted support network before the debt burden becomes and feels insurmountable.

“You cannot help yourself. That is why having a support network of qualified financial advisers, mental health professionals and trusted friends or family members is crucial.” 

She recommends these practical steps to help South Africans regain control of their finances and improve their overall well-being: 

• Seek professional help: “Do not try to tackle this alone. Many employers offer employee assistance programmes that can provide financial advisers and professional mental health services at low or no cost.”
• Develop awareness: Ndimande says South Africans should learn to recognise their emotional spending triggers. “Awareness is the first step towards change. Once you understand what drives your spending habits, you can develop strategies to manage them.”
• Create a support system: She encourages individuals to surround themselves with people who understand their goals and can offer support. “Having a strong support system can make a significant difference in your journey towards financial wellness.”
• Use available tools: Ndimande suggests people leverage technology and resources to help them manage their finances better. “These tools can provide valuable insights into your credit score and access to financial coaches who can offer guidance on improving your financial health.”

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Breaking the silence on debt

Ndimande says one of the most crucial steps in addressing the debt crisis is breaking the stigma surrounding debt.

“Discussing finances, especially debt, can feel awkward and bring up uncomfortable emotions. But not talking about it only makes things harder.” 

She says normalising honest conversations about one’s financial situation encourages people to support and educate one another and ultimately make informed financial decisions. 

“People just don’t want to be honest about the credit side of their life. However, this openness can lead to a more supportive community and help individuals realise they’re not alone in their struggles.

“When we share our stories, we not only find support but also discover new strategies and resources that can help us overcome our challenges.” 

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Creating financial well-being for peace of mind

The relationship between debt and mental health is complex and deeply personal, Ndimande says.

“However, South Africans can take steps towards better financial and mental wellness by understanding emotional spending triggers, recognising the signs of money-related stress and leveraging available resources.” 

She also encourages people to know their credit commitments intimately, understand the terms of their agreements and be proactive about managing their finances.

“Remember, it is never too late to turn a situation around and you are not alone on this journey. We can create a supportive environment that promotes financial and mental health and empowers more people to manage their finances with confidence by normalising conversations about debt.”