It’s estimated that almost one in five adults lives with a mental illness. Mental health includes your emotional, psychological and social well-being. It affects how you think, feel and act. It also helps determine how you handle stress, relate to others and make choices. Each year, millions of people face the reality of living with a mental illness.
Research has also shown that finances are the number one cause of stress. Yes, financial uncertainty can impact more than your bank account. According to at least one study, stress over money can translate to increased psychological stress, lower self-esteem, strained interpersonal relationships and difficulty being productive and focused at work. Poor mental health can lead to increased financial stress and vice versa.
Below are four ways mental health influences your relationship with your finances:
- It can contribute to the mismanagement of your finances. Mental health conditions can make it harder to control your spending, pay bills or budget appropriately.
- Certain mental health conditions can sometimes result in impulsive behaviour.
- Feeling depressed can cause low self-worth, which can make it difficult to pursue opportunities that would increase your income.
- Mental health problems might become so severe that you're unable to work at all anymore. This will not only affect your income, but it could also affect your ability to access health insurance coverage, which makes it harder to get the help you need.
Your mental health and financial health can have massive impacts on each other. To improve their relationship, consider doing the following:
Start with a budget
A budget is one of the simplest tools you can use to alleviate financial stress, but it's one many people do without. Creating a workable, realistic budget is especially important if your financial stress is due to a loss of income because you've been laid off or your hours have been cut at work.
There are a seemingly endless number of ways to budget, so there's a method for most people's financial situation. Finding the right budget for you can take some time, so try out a few and choose the method that best fits your lifestyle.
Make a debt payoff plan
Debt can be a source of financial stress if you're making payments but feeling like you're getting nowhere fast. The first step in successfully tackling debt is knowing what you owe. Secondly, choose your payoff method. There are a number of payoff methods to choose from. The snowball and avalanche methods are two of the most popular.
Thirdly, stick to your plan: the hardest part isn't always coming up with your debt payoff plan, it's actually sticking to it. But remember, getting out of debt can help you feel a lot more secure, which can in turn benefit your mental health.
Start an emergency savings account
Having an emergency fund can help you stay afloat and minimize financial stress during tough times. Reviewing your budget again to find expenses you could cut is one way to find money to save. But if you've already trimmed your budget down to the bare minimum, that might be difficult. You will have to find ways to increase your income, for example by starting a side hustle to earn extra cash.
Work on your credit
A good credit score can make it easier to borrow money at favourable rates when you need it. If you haven't got your emergency fund fully funded yet and you need a small personal loan, good credit can make borrowing less expensive.
Practise self-care
One of the best tools to fight against the symptoms of poor mental health is to practise self-care. Building a self-care routine is about creating time and space for the things you need, the things you want and the things that make you feel good. Once you start making time for yourself, you may find that you’re better equipped to make serious financial decisions.
The best thing about self-care is that it doesn't have to be expensive or even cost money at all. To save money, start your self-care routine off small and focus on bettering (or creating) habits that you know need addressing.
Address your mental health
There are many coping mechanisms people with mental health issues use to help them feel better. Mental health issues should never go untreated. If you begin to notice your physical or mental health declining, it's essential to get help. Speak to your doctor (even if you're unsure if you need assistance) if you notice your sleeping patterns, eating habits and energy levels shifting negatively. It's always a good idea to get your health examined.
Speak to a professional
Sometimes, trying to manage your finances on your own can be hard. A credit counsellor is a trained professional who can look at your finances as a whole and help you determine where you can start making some cuts and how to begin eliminating debt.
The bottom line
Financial insecurity clearly has a profound impact on our mental health, whether you’re struggling to meet immediate needs or simply trying to save for the future. Mental health problems and financial insecurity can be difficult to handle on your own; get help if you feel overwhelmed. It's important to give yourself grace and commit to small steps to gain a greater sense of financial control. These steps include creating a budget, identifying methods to earn more, making and sticking to a debt reduction plan, practising self care, addressing your mental health and setting cash aside for the future.
This article was written by Hysha Burgess from Everything Finance and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.
