Some of the ways debt hurts California families are direct and obvious. Juggling debt and dealing with creditors and debt collectors is stressful and unpleasant. Money going to cover credit card debt and service other debt is money not available to spend as you wish. Sometimes, that means holding off on buying a house or taking a vacation. But, for some, it means cutting back on the grocery budget or struggling to find money for new clothing when your child suddenly jumps a size.

Of course, the impact of debt varies from household to household. But, the Federal Reserve has identified trends around the country. California has one of the highest debt-to-income ratios (DTI) in the country. That means Californians are carrying more debt relative to their incomes than those in most other states. In Los Angeles County, the DTI is lower than the state average. But, much of the surrounding area is running higher. Both Orange County and Ventura County are above the state average and considerably above the national average. And, DTI takes an even bigger leap in San Luis Obispo and Riverside Counties: both have DTIs of 2.63, compared with a statewide average of 1.75.

In simple terms, many in the area surrounding Los Angeles are carrying very high debt relative to their incomes. And, high debt burdens can mean more trouble than you realize.

The Impact of Financial Stress

Debt Can Make You Sick

A recent study from Salary Finance showed that people troubled by financial stress were six times as likely to be suffering from anxiety and seven times as likely to be depressed as their peers without monetary worries. They’re also more likely to have trouble sleeping. But, the mental health impact is only the beginning.

Previous studies have shown that debt related stress contributes to a variety of medical problems, including:

A worse sense of overall health and higher blood pressure (The high price of debt: Household financial debt and its impact on mental and physical health
Heart disease, including heart attacks (Financial stress linked to heart disease among African Americans)
Poorer cognitive function (Poverty Impedes Cognitive Function)

Researchers also note that financial struggles and stress indirectly affect health in a number of ways, including lack of access to healthy food and hesitance to go to the doctor because of the cost. 32% of respondents to a Bankrate survey said they’d decided not to seek medical care at least once during the previous 12 months because of the cost.

The medical consequences can be serious and, in turn, can trigger other problems. For example, medical problems can lead to increased healthcare costs and difficulty maintaining employment. But, your health isn’t the only area of your life that can be impacted by debt and financial stress.

Debt Can Damage Your Job Performance

The Salary Finance report referenced above also showed job performance suffering as a result of financial stress, impacting the employee, co-workers, and the employer.

For example, the report concluded that employees burdened by financial stress:

Were twice as likely to be looking for a new job
Were more likely to be unhappy in their jobs, even if they weren’t looking to leave
Were nine times as likely to have troubled relationships with co-workers
Were 10 times as likely to be unable to finish their daily tasks
Lost about three productive hours per week to money worries
Saw the quality of their work impacted

Unfortunately, these problems are rarely short-lived. About half of survey respondents said their stress was worse than it had been a couple of years ago. That’s not a surprise, since we know that most people who ultimately file for bankruptcy have struggled with debt for at least two years before taking action. For many, it’s been five years or more.

As debt stress drags on, worsening stress, medical complications, problems at work and other direct and indirect consequences of financial stress can make it increasingly difficult for people to find long-term debt solutions. For instance:

High pressure from a particular creditor or debt collector can lead to quick decisions that make it impossible to pay higher-priority debts, increasing stress and making it hard to think long-term
Health consequences of debt stress can destabilize earnings, making it hard to plan ahead
Frayed relationships with employers, friends and family can cut off sources of assistance
Short-term solutions like high-interest loans can end up making the overall financial picture worse instead of better
Exhaustion, anxiety and depression stemming from debt stress can make it difficult to take a clear and honest look at the situation and explore options

The obstacles are real, but debt very rarely resolves on its own. To find real, long-term solutions to debt stress, you have to decide to take control and create a plan for a more stable financial future. There’s no one-size-fits-all solution, and the late-night advertisements offering programs that seem too good to be true usually are. The best first step is to learn more about the options and how they may fit your situation and long-term goals.

At Borowitz & Clark, we’ve been helping people in the Los Angeles area resolve debt problems for decades. We know how stressful and confusing debt stress can be, and how difficult it can be to take the first step. So, we make it as easy as possible. To schedule a free, no-obligation consultation, just call 877-439-9717 or fill out the contact form on this page.