Fear of Debt
- Fear of debt can cause you to ignore your finances rather than getting a handle on them.
- Working to conquer your fears could get you to a better place financially.
- There’s professional help for financial phobia.
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Have you avoided your mailbox because you didn’t want to deal with credit card bills? Does the thought of balancing your checkbook make your stomach turn? If so, you may suffer from financial phobia.
Financial phobia is the fear of dealing with personal financial issues like budgeting, investing, paying bills, researching debt relief, or even checking your bank account. It can come in many different forms, from refusing to open your credit card bills to panicking or feeling paralyzed every time you think about your financial situation.
If you’re noticing similar symptoms, there are steps you can take to overcome your fear and improve your financial situation. Let’s look at the causes and risks of financial phobia so you can make a plan to conquer it.
The Connection Between Debt and Fear
Fear of debt is a type of financial phobia. If you have too much fear of debt, you might ignore notices from creditors, or avoid checking your credit card balance because you're worried about what you'll see.
To some degree, a fear of debt can be healthy, especially if it helps you keep debt to a minimum. If you're scared of owing large sums of money, it may drive you to limit spending and stay on top of your credit card balances so they don't become hard to manage. However, if a fear of debt causes you to avoid facing your debt, it could have negative consequences. At that point, you risk letting your debt spiral because you aren't aware of how much you have. A fear of debt could also prevent you from seeking debt relief.
It's not unusual to have some fear of debt. Debt can be stressful and emotional. If you have a lot of debt, you can feel like you've failed financially. Your debt may also hold you back from meeting other life goals, which could, in turn, negatively affect your self-esteem.
Also, when you have a lot of debt, it's easy to feel trapped, and fearful that you'll never escape it. Without help, you may be resigned to being in debt forever.
If you can work past your fear of debt, you can seek the help you need to improve your financial outlook. A debt relief company, for example, may be able to negotiate a debt settlement on your behalf so you're able to pay it off and move past it. But if you let fear of debt stop you from making that call, you could cause yourself even more struggle.
Financial Phobia Affects Many People
If you’ve experienced financial phobia, you’re not alone. A 2024 Discover survey found that 80% of Americans have some anxiety about their financial situation, with 34% experiencing moderate or severe anxiety. The problem is so extreme that 41% of Gen-Z Americans avoid looking at their bank account balances.
More recently, Capital One found that 77% of Americans are anxious about their financial situation. And people who are stressed about their finances are less likely to save money, be mindful of their spending, or plan for unexpected costs.
What Causes Financial Phobia?
Some people experience financial phobia because they associate money with negative experiences like being in debt, losing a job, or having a serious financial emergency. Other people may have financial phobia because they’ve had arguments with loved ones over money, or because they never learned about personal finance and simply don’t know how to deal with it.
In some cases, a fear of debt, and general financial phobia, can stem from cultural or religious roots. If you were raised in a household where debt was shunned, you may feel ashamed that you’ve gotten into debt. Similarly, if the religion you practice views debt negatively, you may feel shame around debt, and carrying debt may make you feel like a flawed person.
Your age might also play a role in your fear of debt. The Federal Reserve reports that millennials have twice as much education debt as Gen-Xers. For millennials, carrying student loan debt might seem like a rite of passage, whereas for older generations, lingering student loan debt can seem like a failure.
It’s also important to recognize that inflation and rising interest rates have made it harder to avoid debt in recent years. Older generations may have an advantage over younger ones in this regard, since people in that category may have been established financially before living costs and interest rates soared following the pandemic.
All told, younger people may be more resigned to being in debt than their older counterparts, but this doesn’t mean they’re not fearful of the consequences. And on the flipside, older people with lots of debt may experience fear because they feel like outliers compared to their peers, and because they’re getting closer to retirement with that burden hanging over them.
Still, across generations, people with a fear of debt tend to feel they’ve lost control over their finances and don’t know how to regain it. Overcoming your fear of debt could help you get to a better place financially.
What Are the Risks of Financial Phobia?
Ignoring your finances could end up being much scarier than confronting your financial issues head-on. While it may be hard to face your fears, it is possible to overcome financial phobia and deal with money matters in a positive way.
Financial phobia could cause you to ignore your situation. Understanding your fears and working to improve your mental health could help you create a better financial future.
Physical and Mental Health Impact of Debt Fear
A deep fear of debt could negatively impact your physical and mental well-being. That’s why it’s worth it to address the fear and work to overcome it.
If you can't bring yourself to look at your credit card or loan balances, you might expend lots of mental energy stressing over the worst-case scenario. Your negative thoughts might spiral, and you might imagine yourself losing your car and home—an outcome that may be avoidable.
A huge fear of debt can also make it difficult to fall asleep and stay asleep. When you're perpetually stressed and exhausted, it can weaken your immune system, leaving you susceptible to illnesses.
A fear of debt could also impact your personal relationships. If you're ashamed of your debt, you may be inclined to hide it from your romantic partner. That could create trust issues and weaken your bond.
If you're stressed about debt all the time, it could also leave you less emotionally available to the people you care about the most, whether that's your partner, parents, children, or closest friends. You may also avoid contact with people you love because you're feeling so anxious and afraid.
A deeply rooted fear of debt could also impact your performance on the job. A 2023 SecureSave survey linked financial stress to diminished productivity at work. If your fear of debt means you can’t focus, it could put your job at risk—and you might end up with even more debt in the absence of a paycheck.
How to Cope with Financial Phobia and a Fear of Debt
The first step in dealing with financial phobia is acknowledging your fear. That can help you set up a plan to overcome it. Here are a few techniques to help you get rid of financial phobia, or at least find ways to work around it.
Understand where your fear is coming from
Knowing why you’re struggling with financial phobia could be key to overcoming it. For example, opening your credit card bills might trigger your fear of debt. Checking your bank account balance might trigger your fear of not having enough savings.
Take it slowly
One of the best ways to deal with financial phobia is to address it in small doses. Every small step you take—like using a budgeting app to monitor your monthly spending—could help you build or rebuild a healthy relationship with your finances.
Talk to someone you trust
It’s worthwhile to have a support system to deal with financial phobia. Identify a friend or family member to call when you’re struggling, and reach out when you need to.
Talk to a therapist
A therapist may be able to help you get to the root of your financial phobia. They may also share techniques for dealing with stress in general.
Build an emergency fund
Knowing you have enough money to ride out a period of unemployment or cover an unexpected expense could help you feel less anxious about your financial situation as a whole.
Make a plan to deal with your debt
Get a handle on your current debts so you can figure out a payoff plan. Figure out how much you owe on loans and credit cards, and what the monthly payments look like.
From there, create a budget that shows you where your money is spent. Figure out how much of your debt you can realistically pay down each month based on your current expenses. If it’s a small amount, you can look into options like debt consolidation, which could result in lower monthly payments—and less stress for you.
Also consider whether it’s possible to boost your income as part of your debt payoff plan. That could involve picking up extra shifts at work, or getting a side hustle.
Create a financial journal
Writing down your feelings about debt and finances could help you come to terms with them. Spend some time each week putting your thoughts in writing. You may find it therapeutic, and it could help you gain clarity.
Try some stress-relieving activities
When you're worried about debt, or money in general, it can help to have ways to relieve some of that stress. Try deep-breathing exercises to see if they help you cope. Or try activities like yoga and meditation that are known to help with all types of stress.
You may want to commit to a regular exercise schedule, and spend more time in nature. Both have been shown to positively impact stress reduction.
Expand your financial knowledge
A lot of people have a fear of debt or financial phobia because they don’t know how to manage money. If you feel like you’re in the dark, it’s not your fault.
It’s only recently that more states have required financial education to be part of high school curriculum. If you were never taught how to manage debt or finances in general, then don’t blame yourself for owing money and not having a good handle on things.
You can take steps to improve your financial literacy. The more knowledge you acquire, the less fearful of debt you may be.
There are a number of free resources to help you improve your financial knowledge. Organizations like the National Endowment for Financial Education have free online courses. Some banks and financial institutions offer free programs to help people build financial literacy, such as Union Bank & Trust. If there’s an institution you already have a banking relationship with, call or visit your local branch and ask if someone can point you toward resources.
Automate your debt payments
If looking at your loan and credit card balances causes you anxiety, it could help to put payments on autopilot. Once you've looked at your budget, set up a recurring automatic payment to your credit card accounts so your balances are paid down steadily. You can do the same with loan payments. This can help address fear of missing a payment.
It can also help to automate your savings if there's room in your budget to do so. Each month, have some money land in your savings account once you get paid. Knowing you're contributing to your savings could help address your fear of debt by reassuring you that you can pay for unplanned expenses.
Celebrate milestones
It’s important to give yourself credit for working through your fear of debt, and for paying down any debt you can. Treat yourself to a relaxing bath or a nice meal for tackling financial tasks that scare you, and for hitting debt payment milestones.
You can even occasionally treat yourself to a small purchase as a reward. But try to focus on low- or no-cost ways to celebrate your wins so you don’t set yourself back on the road to getting out of debt.
Breaking the Cycle of Debt Avoidance
If your fear of debt has made you avoid addressing the issue, it's worth it to break that cycle. The first step is acknowledging your fear, admitting to yourself that dealing with debt makes you uncomfortable. From there, you can find strategies that make it easier to face your debt head-on.
It might help you to take small steps toward understanding and addressing your debt. Start by making a budget to get a handle on your expenses. Then review your debts with the understanding that you don’t have to pay them all off right away. The key, rather, is to simply gain awareness of what you owe.
Once you feel ready, identify one debt to tackle, and see how that goes. You may want to use the snowball method, in which you pay off your smallest debt first, before moving on to larger debts that may feel overwhelming.
It can help to automate as many bills and debt payments as you can. This helps eliminate the stress of keeping track of deadlines each month.
If you feel you can't handle things on your own, reach out for help. Talk to a trusted friend, speak to a therapist, or schedule a consultation with a debt relief company and see what help a professional can offer. Working with a debt relief company gives you a good opportunity to get a handle on your debt and move forward.
Get Professional Help
You don’t have to deal with financial phobia on your own, especially if you’re struggling with debt. Freedom Debt Relief is here to help you understand your options, including our debt relief program. Our Certified Debt Consultants talk to people every day who are anxious and worried about their debt, and they can help you find a solution. Find out if you qualify right now.
By adjusting your attitude about your finances, creating a support system, and getting help with financial phobia, you can change your mindset and empower yourself to make smart money-related decisions.
Debt relief by the numbers
We looked at a sample of data from Freedom Debt Relief of people seeking credit card debt relief during September 2025. This data reveals the diversity of individuals seeking help and provides insights into some of their key characteristics.
Age distribution of debt relief seekers
Debt affects people of all ages, but some age groups are more likely to seek help than others. In September 2025, the average age of people seeking debt relief was 53. The data showed that 25% were over 65, and 15% were between 26-35. Financial hardships can affect anyone, no matter their age, and you can never be too young or too old to seek help.
Home-secured debt – average debt by selected states
According to the 2023 Federal Reserve Survey of Consumer Finances (SCF) (using 2022 data) the average home-secured debt for those with a balance was $212,498. The percentage of families with mortgage debt was 42%.
In September 2025, 25% of the debt relief seekers had a mortgage. The average mortgage debt was $236504, and the average monthly payment was $1882.
Here is a quick look at the top five states by average mortgage balance.
| State | % with a mortgage balance | Average mortgage balance | Average monthly payment | |
|---|---|---|---|---|
| California | 20 | $391,113 | $2,710 | |
| District of Columbia | 17 | $339,911 | $2,330 | |
| Utah | 31 | $316,936 | $2,094 | |
| Nevada | 25 | $306,258 | $2,082 | |
| Massachusetts | 28 | $297,524 | $2,290 |
The statistics are based on all debt relief seekers with a mortgage loan balance over $0.
Housing is an important part of a household's expenses. Remember to consider all your debts when looking for a way to get debt relief.
Tackle Financial Challenges
Don’t let debt overwhelm you. Learn more about debt relief options. They can help you tackle your financial challenges. This is true whether you have high credit card balances or many tradelines. Start your path to recovery with the first step.
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Author Information
Written by
Maurie Backman
Maurie Backman is a personal finance writer with over 10 years of experience. Her coverage areas include retirement, investing, real estate, and credit and debt management.
Reviewed by
Kimberly Rotter
Kimberly Rotter is a financial counselor and consumer credit expert who helps people with average or low incomes discover how to create wealth and opportunities. She’s a veteran writer and editor who has spent more than 30 years creating thousands of hours of educational content in every possible format.
What happens when you don’t check your credit reports?
If you don’t check your credit reports, you won’t know what’s on them. You could end up with credit score damage because you don’t have a handle on your debts and accounts. You also risk becoming a victim of financial fraud. It's a good idea to check your credit report every three months for updates. You're entitled to a free copy from each of the three credit bureaus every week.
What happens when you don’t check your bank account balance?
When you ignore your bank account balance, you risk overdrawing it by spending more money than you have. That could result in costly fees. It's a good idea to check your bank account balance every week.
What happens when you don’t budget?
If you don’t budget, it can be harder to meet financial goals and avoid debt. Budgeting helps you understand what your bills look like so you can put every dollar you earn to good use. If you need help budgeting, there are a number of free apps you may find useful.
How common is fear of debt?
Many people have a fear of debt, and for different reasons. It's important to gain control over that fear so you're able to tackle your debt rather than let it accumulate.
Can fear of debt affect my physical health?
Fear of debt can result in anxiety and poor sleep. It can put you at risk of getting sick and feeling physically unwell.
What's the first step to overcoming debt fear?
The first step to overcoming a fear of debt is acknowledging that you have it. From there, you can explore different solutions for working through your fear and taking control of your financial situation.
