How depression threatens financial well-being

By Luke Landes

For Consumerism Commentary

Published: Wednesday, Aug. 20 2014 11:35 p.m. MDT

An estimated 9.1 percent of the population in the United States have symptoms of depression, according to the Centers for Disease Control Morbidity and Mortality Weekly Report.

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Editor's note: This article originally ran on Consumerism Commentary. It has been reprinted here with permission.

An estimated 9.1 percent of the population in the United States have symptoms of depression, according to the Centers for Disease Control Morbidity and Mortality Weekly Report.

Depressive illnesses are more than just being sad occasionally. Among people with depression there is a measurable chemical imbalance in their brains and this prevents signals from being transmitted from neuron to neuron correctly. So depression changes how people think, and any obstacle to rational decision-making has significant long-term effects on an individual’s quality of life. As a family’s financial situation is one of the primary concerns of this blog and a primary factor in the quality of one’s life, it stands that depression can cause difficulties with money worth a discussion here.

Although depression is often chronic, it can be triggered by external events or at least correlated to life factors. State of employment is one of these factors. The longer someone is out of work and looking for a job, there is a higher probability of that person showing symptoms of depression. To be certain, the CDC study shows 21.5 percent of unemployed persons in the United States have depression, compared with 6.6 percent of the employed population. Of those unable to work 39.3 percent have depression.

A cycle exists that makes depression particularly dangerous, even when putting aside the increased risk for self-harm, suicide or violent behavior. Frequent or consistent financial problems, stemming from the loss of a job, a divorce, a bankruptcy, health problems or a variety of other reasons, can lead to depression’s chemical imbalances. Those imbalance can prevent what others might consider “clear thinking,” the type of cognitive abilities that might, in other situations, be able to help people improve their finances. And that frustrating mental condition can lead to more financial trouble, keeping the depression persistent.

In some cases, people have the ability to adjust their thinking on their own, and change their circumstances — or at least, change the way they perceive their circumstances. There was an example of this recently in a story on CNN Money:

"When Ray Camp lost his job at a Dell supplier at the height of the recession, it took a toll on his soul and his family. After nearly four years of looking, all he found was 16 hours of work every other week at a company four hours away from his home in Nashville, Tennessee.

"He was crushingly depressed and felt worthless. His sour mood made him difficult to be around, putting a strain on his family. His story is a familiar one among the 3.1 million Americans who have been unemployed for more than six months…

"In February, Camp finally decided he was no longer a failed job applicant but a new retiree. After four years, he had embraced retirement and started collecting social security since he had also turned 62. 'Once I finally got into the mindset that I’d never have to face rejection again, I started to feel 100 percent,' said Camp, who now spends the hours he lost on job searches playing with his grandchildren and mowing his lawn."

For some people with depression, the mindset change is only possible with therapy or medication. In fact, the CDC distinguishes between “major depression” and “other depression,” and it is this “major depression” that is less likely to be overcome through nothing more than a decision to look on the bright side of life.

The Suicide Awareness Voices of Education group explains the differences between a healthy brain and a brain with depression:

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