Do you remember back in high school health class learning about a psychological theory called Maslow’s hierarchy of needs? The main idea in this psychological theory is that there’s a certain number of needs that each human being needs in order to be healthy.

Basic needs included food, water, rest, shelter, and safety. Once those needs were met, a healthy human was able to feel emotions like belongingness, love, and eventually, self-actualization.

Given that Maslow’s hierarchy of needs has been used before to argue that wealth is not directly tied to happiness, I was curious if there was a specific amount of incurred debt that would have a larger emotional toll compared to other debt levels.

I turned to North Carolina-based financial therapist Ed Coambs, MA, MBA, LMFTA, CSAT-C, CFP, for some insight. Keep reading to learn what I discovered from my conversation with Dr. Coambs!

First Experience with Debt

For many of us, our first experience with debt is when we go to college and take out student loans, Coambs says. While in college, many students acquire credit card debt too in order to pay for items like clothing, food, and yes, the bar bill.

The problem, Coambs points out, is that higher education isn’t a basic need; it’s more-so related to our psychological needs for prestige or esteem. When we find ourselves in debt for something society deems important at the expense of our basic needs, it can “feel funny,” says Coambs, who’s also a member of the Financial Therapy Association.

In other words, we experience internal psychological distress when we are trying to accomplish something good, such as obtaining a college degree, if it comes at the price of feeling less secure in the resources we have to pay for things like rent, food, water, transportation, health care, etc.

“What would be more effective is to manage our resources in a way where we don’t have overwhelming debt,” Coambs explains.

In other words, there isn’t a specific amount of debt that triggers an emotional or depressed response. It can happen with any sum, especially if the money you’re spending leaves you vulnerable in other areas.

Lifetime Relationship

“Our relationship with money is a lifetime relationship,” reminds Coambs. “Most adults will pass through different seasons in their life in which what they need from their money and how they use it will grow and change.”

For example, the budget that we had at age 20 is not necessarily going to work for us when we are 25, 32, or 40.

To further demonstrate the validity of this statement, Coambs shared that while he was in college his preferred beer was Bud Light because it was $2 per bottle. Now that he’s a working professional with upgraded taste buds, Coambs prefers craft beer that averages $7 per bottle. “I can handle more now,” he said.

The reality is, as we move through different stages in our lives, essentially every aspect of our finances will likely also experience a transition. What works for you at this point in your life may not have worked when you were younger and vice versa.

What financial therapists like Coambs are looking to do is help people not feel embarrassed if they are unsure what to do with their money.

“There’s a lot of financial shame and insecurity when it comes to money. People wonder if they are budgeting correctly, saving the right amount of money for their retirement.” Coambs said. “It’s ok to not know everything about money.”