The Link Between Money and Your Mental Health
How Your Financial Well-Being Can Impact Your Mental Health (And Vice Versa!)Kathy Longo, CFP®, CAP®, CDFA® Monday, 16 January 2023
If you’ve been reading my blog or listening to my Flourish Financially podcast for a while now, you’ve probably heard me say this before: money impacts every aspect of our lives, and this certainly includes our emotions. What is also true is that our emotions can impact the financial decisions we make. In short, there is a substantial interplay between money and mental health, which can be seen in this recent article from Enrich.org linking money problems with mental health issues.
In this article, I’ll dive deeper into this topic to help you better understand how you can begin to find a path toward better mental health and stronger finances, too.
The Impact Mental Health Can Have on Finances
The status of our mental health can show itself in our financial lives in a multitude of ways. For instance, if you’re struggling with feelings of depression or anxiety, you may have a harder time finding the motivation to manage your finances. Tasks such as paying bills or checking your bank account can begin to feel Herculean, and you may begin practicing avoidance. If you’re among the 21% of American adults living with a diagnosed mental illness, keeping a job may be difficult, which can lead to an unstable income. If you’re suffering from poor mental health, you may also be more likely to overspend and jeopardize your financial health in that way. In all these scenarios, it can become a struggle to achieve financial security day-to-day and also long-term.
Another way that the effects of mental health can show up in our finances is through health care and insurance costs. Mental health care is not always affordable or easy to access. Often, people find themselves struggling to cover co-pays and prescription costs. Many must pay out-of-pocket for treatment due to a lack of insurance coverage. All of these roadblocks can compound your existing feelings of anxiety, depression, stress, and more.
SEE ALSO: Does More Money Make You Happier?
The Impact Finances Can Have on Mental Health
On the flip side of the issue, the state of our finances can play into our mental health just as easily. Certain financial situations can trigger feelings of anxiety or panic, such as opening bills or being faced with an unexpected financial emergency we weren’t prepared for. If you’re really struggling with money, you may find yourself unable to afford the things you need to take care of yourself such as nutritious food, medications or treatments, or safe housing. Financial struggles can also make you feel lonely or isolated from friends and family because you can’t afford to meet up for lunch or attend the concert everyone’s talking about.
Being unable to properly take care of yourself or feeling as though you’re constantly fighting to stay above water can lead to heightened feelings of hopelessness and stress. Because our society often perceives financial status as a reflection of character, people who are struggling financially may begin to believe that they’ve failed in some way or feel ashamed of their financial status. And, if you find yourself down this road, your lack of confidence in your financial abilities can contribute even further to negative feelings.
Understanding How Your Money and Mood Patterns Relate
If you’d like to boost both your finances and your mental health, it may help to think about how you feel about money, why you feel the way you do, and what patterns, if any, are prevalent between your moods and your money habits. Ask yourself:
- How does spending money make me feel?
- Are there certain times when I’m more likely to spend money?
- Are there times when I’m more likely to focus on saving?
- Does saving money make me feel different than spending money?
- Where did I learn to manage money?
- When I think about money, what emotions and feelings come up?
- Which aspects of money management make my mental health worse?
While you’re on this journey, it might be beneficial to keep a diary of your spending and your mood, recording what you spent, why you spent it, and how it made you feel. Being able to work through your day-to-day experiences with money and your emotions can help give you a better understanding of your money story, as well as give you a clearer understanding of what your strengths and weaknesses are when it comes to money management. The better you’re able to understand your money habits and emotions, and the way they relate to each other, the easier time you’ll have gaining greater control over them.
SEE ALSO: 6 Ways to Stop Overspending and Save More Money
Creating a Positive Relationship Between Your Money and Mental Health
Too often, we remain unaware of the ways our mental health impacts our ability to manage money successfully, and the impact poor money management has on our mental health. By recognizing the strong relationship between the two and noticing how it plays out in your own life, you’re better positioned to make the changes needed to improve both your mental and financial health.
Money matters and mental health struggles are both topics that are fraught with emotion – and which many people still consider taboo. While there are no “easy button” steps to strengthening your financial situation or your mental well-being, there’s hope for moving forward. We all have periods of personal and financial transition in our lives that stir up emotions and make it difficult for us to get outside of our own heads and move forward with clarity, and sometimes it can feel like everything is out of control. Remember, though, that you can always take matters into your own hands by controlling your mindset and utilizing financial education resources.
If you enjoyed this article, you may find value in these episodes of my Flourish Financially podcast:
- · Episode 11: Numerophobia
- · Episode 13: Taking Small Steps
- · Episode 17: Reconciling Emotions and Money
- · Episode 41: Building Your Financial Confidence
- · Episode 44: How Emotions Affect Your Money Story
- · Episode 49: Fourteen Financial Fears
If you like what you hear, please leave a rating and review on Apple Podcasts!
About the Author
Kathy Longo, CFP®, CAP®, CDFA®
Kathy Longo brings over 25 years of expertise and experience to Flourish Wealth Management. Kathy is wholly dedicated to improving the life of each client and finds joy in making complex matters simple and easy to understand. She excels at asking the right questions, uncovering new possibilities and implementing the most advantageous strategies for success. Playing such a pivotal role in her clients’ lives remains an honor and a privilege. After earning a degree in Financial Planning and Counseling from Purdue University, she began her career at a small firm in Palatine, Illinois where she worked directly with clients while learning to build a viable, client-centric business. Over the years, she gained extensive knowledge and wisdom working as a wealth manager, financial planner, firm manager and business owner at notable, various sized companies in both Chicago and Minneapolis.