The combined effects of the Covid-19 pandemic, a weak economy and the rising inflation and interest rates not only result in more financial stress for many South Africans, but also take a toll on their mental well-being.
According to DebtBusters’ debt index, debt counselling enquiries in the fourth quarter of 2021 increased by 18% when compared to the same period the previous year.
This trend intensified in the first month of 2022, with 32% more enquiries than in January 2021.
“There are still many consumers who could benefit from debt counselling, yet continue to struggle month after month hoping things will get better,” says Nosiphiwo Nxawe of DebtBusters.
In a study done by the University of Cape Town in 2020, it was confirmed that the stress of debt can lead to psychological problems.
“Clients indicate that debt causes anxiety, loneliness and depression,” says Nxawe.
“This, in turn, makes it harder to face reality and deal with the root cause of the problem. It becomes a vicious spiral.”
There are typically five stages of response to financial difficulties.
Denial
People who are in denial about the extent of their debt often refuse to recognise that they need help.
They make excuses for their inability to pay the bills and disregard creditors’ calls or payment notices, which can add to the pressure.
Ignoring debt will not make it go away. In fact, it can lead to creditors repossessing assets such as houses or cars.
Stress, anger and regret
When people begin to realise that things are not going to improve, the stress can manifest itself as insomnia, anxiety and hypertension.
Sometimes the situation is made worse by taking out additional loans to make ends meet. When loan applications are denied, anger and regret can set in.
Depression
Confronted with the reality of their financial situation, it is common to feel hopeless and desperate.
When people feel overwhelmed, they are either paralysed by anxiety and do nothing, or decide to seek help.
Acceptance
Coming to terms with debt is a significant step.
“This is when people realise they are not able to solve the problem alone and are willing to accept help,” says Nxawe.
“The earlier they reach this breakthrough moment, the sooner they can begin the journey to financial freedom.”
Resolution
People who have taken control of their finances experience a sense of relief and freedom.
Nxawe shares tips on dealing with the implications of debt:
- Do not let anxiety paralyse you. Seek help as soon as you can.
- Do not carry the burden alone. Being in debt is nothing to be ashamed of. Many people are. Getting help is the responsible thing to do.
- Do not underestimate depression. It can be serious and may prohibit 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.
