How Your Finances Impact Your Mental Health

Posted By: Family Credit Management | Monday January 24, 2022

Finances and mental health have always gone hand-in-hand. Money problems can create a heady mix of stress anxiety and depression. As your stress increases, your money problems are also likely to increase with stress-spending and inability to focus on the tasks that will help the most. When the money isn't right in your life, it's difficult to relax. If you can't relax, you become more stressed over time and unable to relieve that stress. This becomes a serious risk to both your short-term and long-term mental health.

Fortunately, you don't have to stay in the vicious cycle of stress and money problems. With planning, focus, and attention to both your financial and mental health, you can pull yourself out of nearly any problem financial situation. Today, we're taking a closer look at how finances can impact your mental health and what you can do about it.

The Vicious Cycle of Ill Financial and Mental Health

Finances have always created a vicious cycle with mental health. When your finances are in a bad place, you generate stress. This is natural, it's your body trying to give you energy to "hunt and gather" your way back to resource security. However, that trickle of stress-energy is everywhere. You can't sleep or watch a movie without it. It becomes exhausting, creating both fatigue and the desire to spend more. In this way, financial stress can prevent you from improving your situation, creating more stress and worse finances over time.

Inability to Focus

When you are stressed about your finances, this can actually take up extra cycles in your brain. That inability to focus is part of your brain constantly thinking about your financial situation and how to make it right. Unfortunately, this pulls your focus away from your work - reducing your ability to get ahead financially by working smarter or taking extra hours.

An IFEBP survey found that professionals experiencing financial stress may lose nearly a month of productive workdays a year, making it more difficult to earn your way out of a bad financial situation.

Desire to Stress Spend

Even worse, stress makes you want to spend more. You will crave fast foods and snacks that have soothing macro-nutrients. You may be inclined toward stress-spending and emotional-spending to feel better about a bad situation. Stress spending can lead to spending more of your budget than you planned, which is counter-intuitive to improving your overall financial situation.

Financial Stress, Anxiety, and Stress Dreams

One of the major side effects of finances on your mental health is anxiety and dreaming. When you are focused on resource scarcity, your instincts kick in. If you find yourself pacing and tapping or wringing your hands, that's your body trying to give you the energy to resolve the problem. Anxiety and financial stress are closely related and many people with anxiety disorders find symptoms made worse by financial insecurity.

Stranger still, however, are the financial stress dreams. If you are stressed enough about one absorbing concept, like going to work or lacking funds, you may find yourself dreaming about it. These stress-inspired dreams are not restful but rather a restless reflection of your own real-world constant struggle for financial security.

Depression From Financial Lack of Progress

Many people eventually move from anxiety to depression. When your finances don't get better for an extended period of time, it can be tempting to give up and just let yourself live in a financially insecure state. It's easy to get depressed when your debts grow or there's nothing left for savings at the end of each month. Depression doesn't come immediately from being in debt or short on cash, it happens over time as the stress eats away at your tolerance for motivation. As you fail to see your own personal financial progress, depression and hopelessness can set in.

This affects all aspects of your life. Depression can also sap energy from your daily work and cause you to stop looking for solutions to your financial situation.

How Serious is Your Financial Situation? Take the Quiz to Find Out!

Improving Your Finances and Your Mental Health

If your finances and mental health are so closely linked, improving one should improve the other; right? This is mostly correct. If you remove the stress caused by money problems, your mental health will surely improve. If you improve your mental health so you can better focus on debt solutions and earning opportunities, your financial situation will inevitably improve.

The question is, how can you best move forward on both your goals to be more financially secure and improve your mental wellness for the year?

Have Debt? We Can Help You With That!

Give Yourself a Mental Health-Care Check

First, don't let money problems weigh you down so that even basic mental health starts to flag. There are things anyone can do to boost mental health and wellbeing. All you need is a quick personal mental health-care check. Are you doing things that can boost your mental wellbeing, even during this time of financial hardship? Every little bit helps when it comes to keeping your mind, body, and emotional balance in a good place as you work through a difficult time in your life.

● Self-Care

○ Enjoyable daily hygiene routine

○ Good sleep at predictable times

○ Daily or weekly exercise

○ Eating regularly with healthy meals

● Home Environment

○ Keeping up with household chores

○ Clean and clear surfaces

○ Square everything at neat angles

● Home-Life Balance

○ Schedule time for friends and family

○ Take personal time for yourself to be alone with your thoughts

Work on Your Financial Health and Wellness

Once you have your personal mental health routine figured out, it's time to refocus on improving your finances. There are several good ways to do this. You can consolidate credit card debt and other debts into an easier-to-pay singular loan. Also, you can set aside your savings & debt repayment at the beginning of each pay period instead of near the end. Drill your focus into your current work to earn more or a promotion.

Many people today are looking into the gig economy, selling crafts on Etsy, driving for Uber, or providing services through TaskRabbit, just to name a few. You can also export something you already do like dog-walking or tutoring.

Finally, with a well-balanced inner-self, you can also focus on improving your primary career - aiming for a promotion, earning bonuses, or seeking a better job to more quickly earn your way out of financial difficulties and improve your professional standing.

Mental health and financial wellness may be closely linked. However, you can also use that link to lift yourself up instead of being brought down. By improving one or the other, you can improve both important aspects of your life. Contact us today for the tools you need to improve your financial and mental health this year.

Ready to get started?

Our certified credit counselors are ready to help you take control of your debt and finances. Take the leap with us today.

Get started with a free quote