Skip to Content
Tally logo

The Unexpected Consequences of Being in Debt

Debt in itself can be stressful. But there can also be emotional, psychological and other financial consequences that go far beyond the monthly bills and statements.

November 17, 2021

In the U.S., individuals hold an average of $5,315 in credit card debt

The cycle of debt can be overwhelming and stressful, but one aspect that deserves further discussion involves the additional financial and emotional consequences of being in debt — beyond your credit card bill and compounding interest. 

It’s important to work toward paying off the debt so you can reach financial freedom. Read on so you can understand, and try to avoid, the unexpected expenses of being in debt. 

The Cycle of low savings 

When you’re focusing on making minimum monthly payments on debt each month, it’s hard to grow savings simultaneously. Not being able to save money means that you miss out on the potential benefits of savings accounts, including savings bonuses and interest. 

Some checking and savings accounts charge a monthly maintenance fee of up to $15 if account holders don’t meet a minimum balance threshold. That means that if you fall under the predetermined amount, you may be losing money each month. If you can’t meet those thresholds, you’re losing out not only on potential bonuses but also on the interest you could earn on it each month. 

Living without emergency savings 

Credit card stress isn’t just about what a person owes, many feel additional pressure from potential unexpected expenses that might arise. 

One out of four Americans has no emergency fund to speak of, and if they already carry debt, a life emergency could push them into a very negative space, financially. 

Without savings in place to cover an emergency, you may end up turning to alternatives such as guaranteed personal loans, payday loans or taking on more debt. 

“Borrowing” from future income

If you’re living with a large amount of debt, you may have to make decisions now that limit your earning potential in the future. For example, you may have better job prospects and growth if you move now, but if you’re carrying debt and have limited savings, you may not be able to afford to do so. 

So while you’re saving money right now since you’re not spending on an expensive move, you are limiting future job prospects.  


The “fear of missing out” is real for everyone, especially those in debt. If you’re trying to pay down debt quickly, you may have to pass on social events ranging from happy everything like happy hours to vacations. While missing out on these things will help you pay down debt faster, they may strain your relationships. 


Delaying retirement

When you don’t have much money left over each month and you aren’t able to save, you could be impacting your long-term savings and pushing your retirement back. 

Delaying retirement savings even by a year at age 26, could mean missing out on close to $23,000

Putting off starting a family

The average cost of raising a child to the age of 17 is $233,610. When you’re carrying debt, the idea of starting a family can be overwhelming, if not unimaginable. 

If you’re paying down debt, you may choose to delay starting a family until you stand on better financial footing to support a child. That could mean putting off dreams of starting a family by years, even if you want to start a family now.   

Limiting short- and long-term choices

Dealing with costly monthly credit card bills can also limit the choices you have in the short and long term. 

For example, having debt could mean having to put off a minor car repair. While you might be able to continue driving the car for the time being, the issue could get worse and that small repair may turn into a more complicated and expensive one down the road. 

In the long-term, big life decisions, like buying a house, could be delayed by debt.

Emotional debt expenses

One expense many don’t consider as they carry debt is how it could impact their emotions. Debt-related stress can impact your mental health, which in turn can affect your physical health. This could also lead to further financial costs. 

In addition, there’s the stress of dealing with debt collectors. While you may not be able to put a price on it, the relentless calls from debt collectors can compound your stress, making it harder to focus on goals and pay down debt.

Breaking free

Carrying debt has clear and calculated expenses, including interest and late fees. However, expenses such as stress or delaying life goals, aren’t as easy to calculate. One way to avoid these expenses is to be proactive, pay down debt on time and create a plan to become debt-free.  

You don’t have to carry the burden of debt-related stress on your own — that’s where Tally† can help. Tally is a credit card payoff app that can compile all your credit card debt in one place, helping you pay off your debt smarter and faster while saving money along the way. Plus, Tally offers a lower-interest line of credit for qualifying users.

To get the benefits of a Tally line of credit, you must qualify for and accept a Tally line of credit. The APR (which is the same as your interest rate) will be between 7.90% and 29.99% per year and will be based on your credit history. The APR will vary with the market based on the Prime Rate. Annual fees range from $0 - $300.