The Three Hidden Costs of Debt

We are all aware that being in debt can be very taxing emotionally.  It can bring us to the breaking point and in some cases, actually break us.  Everyone is also aware of the actual cost of being in debt.  Not only do you have to pay back the money you borrowed, but you have to pay back more for borrowing it.  Each loan, whether credit card or student, carries the burden of interest.  While some in debt don’t think about it, it is there, and it adds up over time.  If you have $10,000 in debt and your average APR is 12%, then you will spending $1200 extra for the year.  That is a lot of money when you are trying to dig yourself back out of debt.

While we are aware of the truths of being in debt, we sometimes forget about the hidden costs.  As you work toward getting out of debt, you tend to lose focus on the many other aspects of life.  Everything is more or less focused on seeing that outstanding balance fall each month and how you are going to continue bringing it down.  We focus on making more money, budgeting to the extreme, and adding whatever money we can to the monthly payment.  The issue with this is that we can sometimes get too focused on paying down debt and it can affect us in other ways.


This is one of the biggest hidden costs that I hear from others that have paid down their debt or are currently working on it.  People dedicated to paying off debt can lose connections with their family, either immediate or extended.  Not everyone in your family may understand the stresses of being under a pile of debt.  It is your goal to make sure that they understand what you are going through, but that can be hard to accomplish.

Families paying their way out of debt tend to have more fights about money and are more disconnected from the outside world because they are watching their money so tightly.  You might not spend as much time with your family if you have a second job or trying to make ends meet.  This happens more often than not and it takes a huge toll on families and their emotions.

Your Health

This hidden cost might not be as apparent than others, but it can end up being deadly.  When getting out of debt, we tend to be only focused on that one thing.  We stress about it, it is constantly on our minds.  This is bad for your personal health.  Stress leads to weight gain, weight gain leads to a whole list of issues.  Not only do we have stress, but we might not eat nutritionally sound foods or may even over eat.

I personally went through this cost and it has taken a long time to get back into shape.  While I feel much better now, I realize how bad it had gotten during my 4 year push to be debt free.  I kind of let myself go, lost a lot of sleep, and ate a lot of bad food.  I went through the same thing when I ran my e-commerce business. It’s the main reason I shut it down.

I wish I would have paid more attention to what I was doing, but my mind wouldn’t let me get away from thinking about those pesky greenbacks. Sometimes it can be hard to balance the two, but it’s extremely important that you do.


This hidden cost is not usually on the front of anyone’s mind unless they are getting close to retirement.  The issue with some people, including myself, is that they are planners.  They want to have their finances planned out and make sure that they will be able to retire when the time comes.  Carrying a large debt balance can throw a wrench in a retirement plan.

The one thing that I learned from being in debt and working so hard to get out of it, was that it is imperative that you pay yourself first.  No matter how much you owe, you always need to fund your retirement account or emergency savings account.  These accounts are a life line down the road.  Many people will say that they don’t have any money left over in order to add to their savings, but just $10 is better than nothing.  You still have to focus on investing for the long term.  You will feel much better when you pay yourself first and it will keep your mind on track to getting yourself debt free.

Related: Saving money and paying debt at the same time

It can be easy to forget about all of the hidden costs of being in debt, especially when you are laser focused on getting out of the hole.  I want to remind you that being in debt can affect your whole life, but that doesn’t mean that you should let it control your life.  While it can take some time to figure out, you can succeed in making the other parts of your life better.  If you let debt control you, then that is exactly what it will do.  It is important to take care of yourself and your family before you let debt pull you down.  If your priorities are taken care of, then you can focus on digging out of the debt hole, but still enjoy life as it passes. We only get one to work with!

These are the three hidden costs that affected me the most. While I wish they hadn’t, I can’t take it back, but can share my struggles with you in hopes you don’t make the same mistakes. We need out family for support. We need our health to live productive lives and to keep us on track. We also need our savings to make sure we don’t go back into debt and don’t have to work for the rest of our lives. Take care of these three things, then you can and will get out of debt!

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  1. Stress can really take a toll on your health, and stress over money may just be one of the worst kinds of stress! It can leave you feeling helpless and can affect all areas of your life. I think that’s why it’s important to really set up a plan of attack and some goals, this way you don’t become overwhelmed thinking ONLY about debt.

  2. Health is the one thing I did NOT expect to be a problem with debt repayment. If I could, I would stop working out and probably eat pretty poorly just to work harder and repay my debt faster. It’s really unhealthy. Someone told me I need to watch Grant Baldwin’s closing speech from FinCon for this reason…

  3. The stress is the hardest to conquer in my opinion. It seems like debt just puts a damper on EVERYTHING you do. I think everyone should have a “stress” budget, it can be used to go out for a drink or something when your feeling down.

  4. Kalen, thanks for sharing your struggles and experience. And, these three things should be taken care of so that we can get away from great debt. Been there, but I have learned something very important to be out of debt.

  5. Each of these factors is huge and they all add up to extra stress and fatigue which can further compromise your ability to make smart money decisions in the short and long term. I ignored my health for too long and now I’m paying the price both literally and figuratively. It can be hard to balance taking care of your family, yourself, your future self, and your current finances, but it can be done!