‘Debt is Not a Death Sentence’: Advice for Managing Money and Mental Health
A conversation with personal finance writer Melanie Lockert.by Amanda Page
When she realized the debt was having a huge negative impact on her life, she left New York City for Portland, Oregon, where she lived frugally with her partner. After nine years, she paid off the last of her student loans.
She documented the journey on Dear Debt, a blog she launched in 2013. The more she wrote about how debt affected her mental health, the more people wrote in to share their own struggles.
One day, Lockert discovered the top search term bringing users to her blog: "I want to kill myself because of debt."
This motivated Lockert to organize the Suicide Prevention Blog Tour, an online initiative for personal finance writers to post simultaneously about mental health, debt and depression. Lockert also created the "Mental Health and Wealth" podcast to open up conversations around the taboo subjects of money and mental health.
The 35-year-old freelance writer recently spoke with Rewire about the connections between debt and mental health, and shared her advice for young adults who are struggling with both.
How did you find the motivation to start paying off your debt?
Before I took action, I was severely depressed and anxious. I had low-cost counseling through the local college. It took that time in therapy. It took a lot of time for me to just sit with this reality until I was ready to change. You can't just pull up your bootstraps and pay off debt if you're dealing with severe suicidal ideation and depression.
It took me over a year to finally take action, even with therapy. I realized, OK, student loans are really the main cause of my depression. If I want to feel better, I need to pay them off.
For people who are feeling that way, know that mental health is the absolute most important thing. Get your mental health in order. Whether that means going to therapy, getting on medication, talking to a financial therapist, meditating, journaling, talking to friends, or going to Debtors Anonymous groups, really work to get your mental health in order before you take action.
When I started Dear Debt, I was going for this kind of Dear John concept of writing breakup letters to debt, really focusing on the emotional aspect of debt because that's what I found lacking in the personal finance community.
What's your advice for young adults who find themselves in seemingly insurmountable debt?
Look at the numbers. Look at your monthly payments. Look at your budget. Your insurmountable debt does not reflect your self-worth. It does not affect how worthy you are at your job.
It's really important for people who have this kind of debt to take it chunk by chunk, little step by little step, because when you see that big balance, you feel like, "How am I ever going to pay this off?"
If you have federal student loans, you can go on an income-driven repayment plan that can really help lower your payments, and also offers student loan forgiveness at the end of 20 to 25 years — I definitely recommend that.
If it's credit card debt, there is the option for bankruptcy. Obviously, that's something you have to carefully consider, but it is an option for people who feel completely overwhelmed. If you are struggling to live because of your debt, I think bankruptcy is definitely something to consider.
There's also nonprofit credit counseling. Check out the National Foundation for Credit Counseling — they offer advice on how to pay off debt. They also have debt settlement programs where they work with creditors to come up with a plan for you.
What's the worst thing that's going to happen? Your wages are going to be garnished, and your credit is going to be tanked. Both not ideal, but you're not going to jail. You're not going to die.
What are the most common topics that come up on the "Mental Health and Wealth" podcast?
The three most common things are anxiety, shame and guilt. A lot of people have anxiety around money. They feel like there's not enough of it. They feel like they're not managing it right, like they don't know what they're doing.
Many people have a lot of shame around debt and mental health issues. In the episode with Sinclair Ceasar, a Black man with bipolar disorder, we talk about how there's a huge stigma already. What are people going to think about my diagnosis? What are people going to think about my debt? People feel internalized shame around their debt, around their money and around mental health diagnoses.
Guilt comes up a lot because people feel like they've made the wrong decisions. They feel guilty for taking on so much debt, feeling like they didn't do the right thing or feeling like their mental health is getting in the way of doing the right thing.
You started the podcast to break the taboo around talking about money. What's your advice for people who have trouble starting the conversation?
Talk with people that you feel safe with. I recommend people start the conversation around money around things that are relatable to everyone, like, "Hey, I have this job and it's around this salary. Do you know what other people make in this range?" Or, "I went to college and I took on some student loan debt. What about you?"
You might bring up the topic of budgeting, like, "Hey, I just started budgeting, and I'm trying to figure it out. Have you guys ever budgeted?"
Have you ever consulted a financial therapist about money and mental health issues?
In an episode with Derek Hagen, a financial therapist, we talk about money scripts and money mindset. He likes to call the money mindset "money scripts," because he was saying that our money scripts were written already. We're pre-programmed. As we get older, we realize that these ideas about money come from family, from friends, from culture.
Talking with a financial therapist definitely confirmed what I already knew, which is that your money affects your mental health, and your mental health affects your money.
This interview has been edited for clarity and length.