How to Get Rid of Debt You Racked Up During a Bad Mental Health Period

Compulsive spending often goes hand-in-hand with certain mental illnesses. For people who have clinical depression, comfort spending is a common way to self-soothe, while individuals with bipolar disorder often go on impulsive shopping sprees during manic episodes. These behaviors can lead to credit card debt that outlasts the mental health episode, and that can make it difficult to fully enjoy life again. When you finally have the energy to go out and spend time with friends and enjoy the simple pleasures in life, it can be devastating to read financial advice that urges you to cut every single corner until your balance is paid off.

There is a way to pay off your debt without sacrificing time with friends or enjoyable experiences—it just requires some more thought and creativity.

A lot of us associate the term “living on a budget” with only eating the cheapest items we can find at the grocery store and eliminating any expense that’s not an absolute necessity. But budgets are meant to create room for things you enjoy, too, and setting a little money aside for those expenses is especially important for anyone who is trying to improve their mental well-being.

Emin Gharibian, a licensed psychologist and founder of Verdugo Psychological Associates, said the first step is to work with your therapist to establish a budget and determine how much you can afford to spend per month on leisure and fun activities, like a weekly meal with friends or other self-care activities, such as taking up a new hobby, in addition to paying down debt. “It’s unreasonable to tell someone that they can’t spend any money for leisure if they have credit card debt,” Gharibian said. “It’s all about budgeting and figuring out what you can afford and sticking to that budget.” As long as you have a plan to pay off your debt and are actively working at it, there’s no need to punish yourself or swear off every “frivolous” activity that boosts your mood or allows you to spend quality time with good friends.

Although therapists aren’t financial planners, Gharibian said many providers can help with basic financial literacy, helping you set priorities for spending and saving and organize your finances based on what’s most important in your life. If you don’t have a therapist already, Gharibian emphasized the importance of being upfront and honest about your behavior and the problems you’re looking to resolve when you start the process. Try to find a provider who is equipped to address the root cause of your spending and is willing to work with you on a budget. He said that it’s best to bring up the issue of debt and budgeting during a consultation call—otherwise you may end up going through several sessions before realizing that a therapist simply isn’t comfortable getting involved with your budget.

If you need more in-depth guidance, Gharibian recommended seeking out a financial planner or accountant—but for basic advice and accountability, the right therapist will suffice.

Even if you know you’re going to have to answer to your therapist eventually, you may still have stressful moments where you’re tempted to open a new credit card, or use the money in your checking account to shop instead of toward paying off your debt as planned. In a difficult moment when you’re feeling tempted and your natural inclination is to buy things to self-soothe, it’s important to have a healthy coping mechanism to turn to.

Work with your therapist to make a list of alternatives to turn to when you’re tempted to spend. What will be most effective depends on the person. Gharibian said calling a trusted friend, reading a book, taking a walk, or listening to music have been effective techniques for his clients, and that mindfulness exercises, meditation, and guided imagery might also be worth trying.

Isolation is a common symptom of depression, and prioritizing quality time with friends is important for improving and sustaining good mental health. Many of us have friends who are in different financial situations and may default to suggesting expensive activities that you’ve historically enjoyed doing. But it’s important to decouple the ideas of spending money and having fun, and to get comfortable with suggesting activities that will allow you to spend time together without breaking your budget.

Lauren Bringle Jackson, accredited financial counselor at Self.inc, suggested organizing social activities like movie or game nights at someone’s home. Instead of going out to dinner, organize a potluck where everyone brings a dish or drinks to share and you can enjoy each other’s company without the hefty bill that arrives at the end of the meal.

Jackson also recommended finding free events and activities in your area. For example, public libraries often offer free craft or movie nights, and many museums have designated days that offer free admission. Outdoor activities are another way to spend quality time with your friends for free. “Get some friends together and play a sport or have a picnic,” Jackson suggested.

“Free events don't limit your fun,” she added. “They expand your opportunities for doing new things in a different way, which is what healing is ultimately all about.”

Of course, none of these money-saving activities are going to be particularly effective if you continue to break out the credit cards during a rough patch. Because shopping—particularly online—can be incredibly tempting, Gharibian recommended giving your credit cards to someone you trust. “Just like people with substance abuse problems shouldn’t be going to bars and nightclubs, people with spending problems shouldn’t have easy access to their credit cards,” he said.

Gharibian emphasized the importance of working out an agreement when you hand over your cards. “Be clear and tell [the trusted person], ‘If I come to you asking for my credit cards, don’t just give them to me. I have to tell you exactly what I need it for, and to be supervised while I use it.’” And make sure you’re on the same page about exceptions and instances when you’re required to have a credit card on file (like at a doctor’s office, for example).

If you can’t find someone who is comfortable with this arrangement, it’s even more important for your therapist to be involved in the financial aspect of recovery. Steve Sexton, financial consultant and CEO of Sexton Advisory Group, recommended reviewing your credit card and bank statements with your therapist on a monthly basis.

Just like there’s a stigma attached to mental illness, many people feel ashamed of racking up credit card debt, so this situation can feel like a double whammy. Gharibian emphasized that, although compulsive spending is not a particularly healthy behavior, it’s still fairly common. “It happens to a lot of people, so they shouldn’t feel like they’re the only ones that made this mistake, or that they’re ‘stupid’ or anything like that,” he said. “It happens and it’s not unusual.”

Credit card debt isn’t a problem that has a quick and easy fix, but being proactive and taking control of the situation will put you on the right path to digging yourself out of debt.

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