The combined effects of the pandemic, a weak economy, rising inflation and interest rates are resulting in more financial stress for many South Africans, which is taking an associated toll on their mental well-being
Evidence of the pressure consumers are experiencing can be seen in the increase in the number of debt counselling enquiries. According to Debt Busters, a debt counselling company, enquiries in the fourth quarter of 2021 rose by 18% compared to the same period the previous year. This trend intensified in the first month of 2022, with enquiries growing by more than32% compared to January 2021. “The positive aspect of this is that more people are seeking help, but there are still many consumers who could benefit from debt counselling yet continue to struggle month after month hoping things will get better. A typical comment from people who choose debt counselling is that they wish they’d come to us sooner,” says DebtBusters’ Nosiphiwo Nxawe.
This is also backed by research by a 2020 University of Cape Town study which states that “being highly indebted is stressful and it leads to psychological problems.” “Anecdotal evidence from clients who apply for debt counselling indicates that debt can cause anxiety, loneliness and depression even for people who have never before had to cope with these issues. This, in turn, makes it harder to face reality and deal with the root cause of the problem. It becomes a vicious spiral,” says Nxawe. “The good news is that this downward spiral can be interrupted. That’s why during National Debt Awareness Month, we decided to also explore how debt counselling – in addition to reducing the monthly debt burden – can relieve some of the mental stress. ”She adds that there are typically five stages of response to financial difficulties, which could all or a combination of the following.
•Stage 1: Denial
•Stage 2: Stress, anger and regret
•Stage 3: Depression
•Stage 4: Acceptance
•Stage 5: Resolution
The company shared some tips to deal with the mental-health implications of being over-indebted:
•Don’t let anxiety paralyse you. Seek help as soon as you can.
•Don’t carry the burden alone. Being in debt is nothing to be ashamed of as many people are. In fact, getting help is the responsible thing to do.
•Don’t underestimate depression. It can be serious and may stop you from tackling your debt, which is the root cause of the problem. Speak to friends and family and get professional help if you need it.