Money and Mental Health
For many, the mere mention of the word "money" sparks feelings of anxiety. A Bankrate study of nearly 2,500 U.S. adults found that 70% of respondents feel stressed about their finances. Living a financially responsible life can help one maintain better mental health. Since May is Mental Health Awareness Month, let's examine the connection between money and mental health.
How do financial struggles impact mental health?
There are lots of ways money troubles can influence one's mental health.
- Stress and anxiety. Financial struggles are one of the leading causes of stress and anxiety. Feeling stressed and anxious can also impact a person's physical health, often leading to insomnia, headaches, weight gain or loss, and other physical symptoms.
- Depression. Money struggles can also lead to depression, which can cause a person to lose interest in activities they once enjoyed and affect their ability to function in daily life.
- Strained relationships. Financial issues are famously a cause of divorce, but it doesn't end there. Money issues can strain many other relationships as well, including those between parents and children, siblings, friends, and more.
It is essential to recognize the signs of financial stress and take steps to manage it. Seeking support from friends, family, or a mental health professional can help alleviate some of the stress and anxiety associated with financial struggles.
How does financial stability impact mental health?
Now, let's explore how financial stability can impact one's mental health.
- Peace of mind. A stable financial reality can provide security and peace of mind, reducing stress and anxiety.
- Increased opportunities. Living a financially sound life can allow a person to pursue their interests and passions, such as travel, hobbies, and new learning experiences, all of which can improve overall mental health and well-being.
- Improved relationships. Financial stability can also improve relationships, reducing stress and tension associated with financial struggles.
Aiming for financial stability can improve your overall mental health and well-being. This can involve saving money, reducing expenses, and investing in a financially secure future.
The link between money and self-worth
Unfortunately, many people link their self-worth to their financial situation. This can lead to feelings of inadequacy and low self-esteem when experiencing financial struggles. However, it is essential to recognize that self-worth is not tied to financial success. Instead, focus on developing yourself in ways unrelated to your financial situation. Set personal goals, practice self-care, and seek fulfillment in areas outside financial success.
Debt and mental health
Debt is often the most significant financial problem that people face, and it can strongly impact mental health. Research shows that people who are in debt are more likely to experience mental health problems like anxiety, depression, and even suicidal thoughts.
People who are caught in a debt cycle may feel like they are trapped in their situation with no way out. This can lead to feelings of hopelessness and despair. Debt can also cause a great deal of stress, which can lead to physical health problems such as high blood pressure and heart disease.
If you are struggling to escape from under a mountain of debt, there are steps you can take to kick your debt for good. Consider consolidating it through an unsecured personal loan that may entail one monthly low-interest debt payment. Your payment might even be lower due to the lower interest rate.
You can also pay off one debt at a time by maximizing your monthly payment toward that debt until it's paid off, often referred to as the "snowball method" of debt payoff. If you choose this route, continue making all your minimum monthly payments on your other debts as you focus on the one.
Managing your finances for improved mental health
Are you struggling with money challenges that are negatively impacting your mental health? Here are ways you can improve your financial and mental health.
- Create a budget and stick to it.
- Trim your discretionary spending for extra breathing room in your budget.
- Seek support from a financial counselor or therapist. (Elevate offers free budget counseling for members!)
- Practice stress-reducing activities such as meditation, yoga, or exercise.
- Avoid using credit cards or taking out loans unless absolutely necessary.
- Set realistic financial goals and work toward them.
- Focus on personal achievements and growth unrelated to your financial worth.
In short, money is deeply tied to mental health. You can improve your mental health and overall well-being by managing your finances and seeking help when needed.
In the comments below, tell us how you maintain your mental health and financial wellness. Our MoneySmart Tips blog has more like this.