Maybe, maybe not.
Lots of debt happens without making bad decisions. Think of medical bills. Natural disasters. Divorce.
But regardless of how you got in debt, there’s more bad news.
Just being in debt makes you stupid.
Stupid, as in, your IQ goes down under the stress of being in debt.
Stupid, as in, you are likely to make poor choices about issues in addition to money.
Stress suppresses intelligence
Researchers at Harvard, Princeton and the University of Warwick found that financial worries impeded not just thinking about money issues, but also spatial and cognitive tests.
People worrying about having enough money to pay their bills tend to lose temporarily the equivalent of 13 IQ points, scientists found when they gave intelligence tests to shoppers at a New Jersey mall and farmers in India.
The idea is that financial stress monopolizes thinking, making other calculations slower and more difficult, sort of like the effects of going without sleep for a night. Herald & News
Not everyone can simply shed their money worries. Short of winning the lottery, most of us have limited options.
But there are take-aways in this study for everyone.
If your money troubles are persistent and not subject to quick resolution, recognize that you may not be functioning at your highest level. Allow time and space to make important decisions. Draw on those you trust to test big decisions you need to make. Get a second opinion.
If you fall into the second category of people whose money worries can be resolved or lessened by filing bankruptcy, realize that the price you are paying for being in debt is more than money. Debt is sapping your ability to make good decisions about everything in your life.
Decide to find out if bankruptcy could enhance your life.
Image courtesy of Flickr and Manuel Scheikl.