Sad people exhibit present bias:"If someone is depressed or even just sad, their brain isn't getting enough of what it needs to make a good decision. And to compound matters, they may become even further discouraged or depressed because they're not able to make a decision." says Amy Jo Lauber, a fee-only financial planner in Buffalo, N.Y.
They tend to value the present over the future
(choosing immediate gratification and ignoring the greater gains associated with waiting).
"Oniomania, or a shopping addiction, is not uncommon. What we sometimes call 'retail therapy' can give us a little boost, but for some people, it becomes very easy to overspend and spiral downward," says Dr. Elizabeth Waterman, a psychologist in Morningside Recovery Center, Newport Beach, Calif.
That downward spiral is especially worrisome because as the debt mounts, a person's mental health can worsen and become serious depression, Waterman says.
Catching the problem early doesn't always take a mental health professional.But, when the debt becomes too much to take, it almost always has a negative effect on a person's mental health.
"If a client is filing bankruptcy, there is almost always a mental health issue, no matter what caused the bankruptcy," says Kimberly Sdeo, an attorney in Princeton, N.J.
Whether you're facing serious depression or a more mild mental health problem, health professionals say it's important to seek help.
Waterman says,
"Sometimes they just need to talk, or it could be more serious and require medication.
But in either case, just identifying the problem and starting treatment can make big improvements and allow the person to take care of their financial problems."
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