Introduction
Mental health and financial health are closely linked. Being in a difficult financial position can have a negative impact on your mental health, and mental health concerns can be exacerbated by poor financial wellbeing.
The UK’s Money and Mental Health Policy institute are leading the way in research into the link between money and mental health, finding that nearly half (46%) of those people in financial debt also have a mental health problem and 86% of those experiencing mental health problems reported their financial situation contributed negatively to their mental health.
Financial stress is not just the inability to meet financial commitments, overwhelming debt or a lack of money. For some financial stress can result
from a lack of confidence when managing money, one overdue bill or anxiety around future financial safety.
The Financial Health Institute defines Financial stress as “a condition that is the result of financial and/or economic events that creates anxiety,
worry, or a sense of scarcity, and is accompanied by a physiological stress response”. Whether you are worried about your retirement, debts, or your children’s future, financial stress is a particularly complex and destructive form of stress that can significantly reduce levels of mental health and wellbeing.
Key indicators of financial stress
Financial stress can have a significant and adverse effect on a person’s mental health and wellbeing, such as:
- Persistent thoughts or worries about finances
- Low motivation, low energy and hopelessness
- Feelings of loss, anger, confusion and sorrow
- Erratic sleep patterns or difficulty sleeping
- Difficulty concentrating or focusing
- Substance dependency e.g. alcohol abuse
- Physical symptoms including muscle tension, headaches, nausea, aches and pains
Strategies to improve your financial wellbeing and mental health
- Identify when you feel more stressed about money so that you can plan ways to manage this financial stress during these times. This process can help you acknowledge the link between your financial wellbeing and mental health. Do you feel stressed around pay day, end of month or each quarter, tax time, or Christmas?
- Recognize how you manage financial stress. Do you want to bury your head in the sand the moment money is mentioned? Or maybe you try to watch every cent when you’re stressed about money which leaves you feeling suffocated and trapped? Recognising how you currently deal with financial stress is a crucial step as you can identify what strategies are helpful or not.
- Assess your financial situation and set a plan. Take time to assess your current financial situation and establish priorities to get in control. Create a financial plan with clear financial goals. Finding ways to reduce your expenses such as contacting your insurance providers to find better deals. Getting on top of your debt by contacting your bank or credit card provider to set up an affordable payment plan. Remember to review this plan regularly to assess what is working.
- Make one financial decision at a time. Managing financial stress and overcoming challenges can take some time. For some the sheer nature or severity of financial challenges can in itself be overwhelming. Research has found that spacing out financial decisions improves individual’s willpower and reduces associated levels of financial stress
Once you notice your stress responses linked to your financial wellbeing, it is important to find effective ways to manage your financial stress
