Lesson 1 of 6 · Money worry is not the same as being bad with money
And not all debt behaves the same way
Debt gets talked about as one moral substance, and it is not one thing.
A mortgage on a house you live in, a student loan repaid as a share of income, a car on finance, a credit card at a high rate, an overdraft that never clears, a payday loan, money owed to a family member, and money owed to somebody who is not a regulated lender at all. Those behave completely differently, and they sit on a person differently.
The research points the same way. Short term, high cost, unsecured borrowing carries the heaviest psychological load, and it does so out of proportion to the amounts involved.
Nothing in this course will tell you what to do about any of them. But knowing that they are different things is the beginning of stopping the internal sentence that says I am in debt, full stop, as though it were one condition you have.
What the research says
Different kinds of debt do not weigh the same. Short term, high cost unsecured borrowing carried the heaviest load for mental and physical health, out of proportion to the amount owed, so the shape of what you owe matters as much as the size of it.
Different kinds of household debt do not sit on people in the same way. Short term, high cost unsecured borrowing carried the heaviest load for mental and physical health, and it did so out of proportion to the amounts involved. That is the evidence for treating the list above as a list rather than as one condition.
Sweet E, Nandi A, Adam EK, McDade TW (2013). The high price of debt: household financial debt and its impact on mental and physical health. Social Science and Medicine, 91, 94 to 100 doi