Money and Mental Health: What’s the Link?
The relationship between mental health and money, particularly debt, is a complex one.
Mental health issues can contribute to financial difficulties, and financial problems, in turn, can create or worsen mental health issues. This can cause a catch 22 situation that is challenging to break.
The impact of mental health problems on money
Mental health issues, such as depression, anxiety, and bipolar disorder, can significantly impact your financial wellbeing.
According to the Money and Mental Health Policy Institute (a charity set up by Money Saving Expert’s Martin Lewis), people with mental health conditions are three and a half times more likely to be in problem debt. This is for several reasons.
Firstly, mental health conditions can affect your ability to manage your finances effectively.
Difficulty concentrating, memory issues, and ignoring the problem, can make it challenging to keep track of your expenses, pay bills on time, or make good financial decisions.
Secondly, mental health issues often lead to employment problems and less pay.
A drop in your income due to unemployment, reduced work hours, or sick pay that is lower than your usual pay, can make it difficult to meet all your bills and expenses and increases the risk of falling into debt.
Furthermore, mental health problems can increase the likelihood of impulsive or reckless spending behaviours as a coping mechanism, which isn’t helpful.
People who engage in excessive shopping, gambling, or substance abuse to relieve emotional distress can easily find themselves in financial strain and debt.
The impact of money problems on mental health
On the other hand, money problems can have a profound impact on mental health.
Financial stress or uncertainty can be a significant source of anxiety, which can contribute to the development or worsening of mental health issues.
The link between debt and mental health is particularly striking. Debt can trigger feelings of shame, guilt, and a sense of being trapped, leading to significant psychological distress.
The Mental Health Foundation reports that people in debt are more likely to experience symptoms of depression and have a higher risk of suicide.
Financial difficulties can also create social isolation and strain relationships.
The pressure to maintain a certain standard of living or social life can contribute to feelings of inadequacy, low self-esteem, and social exclusion, which can further contribute to the development of mental health conditions or worsen existing ones.
When money problems and mental health are getting out of control
The last 3 years have been tough on people’s pockets.
During the pandemic, many people were furloughed on reduced wages, or worse still, self-employed with little coming in. Couple that with the current economic climate and the cost of living crisis, and it’s understandable that people are worried about money, or are facing debt, even if just a couple of years ago they were in a good financial position.
The Money and Mental Health Policy Institute has been instrumental in advocating for changes to policy and practice. Highlighting the importance of providing appropriate financial support and accommodations to those with mental health conditions.
And the Government’s Improving Lives policy acknowledges the connection between mental health and money. It aims to provide better support for those with mental health conditions to manage their money problems and be able to earn a liveable wage.
If you need practical help please contact Citizens Advice or StepChange who both provide free, professional advice on money issues and debt.
Breaking the cycle
Getting professional advice and practical help with managing your money and dealing with any debt can certainly help lighten the load psychologically.
However, it’s important to tackle any underlying emotional problems so that you don’t repeat the same patterns of behaviours, and that’s where holistic counselling comes in.
Counselling can be a valuable tool for people experiencing money and mental health issues, offering a space for you to express your feelings and emotions, identifying the root causes of your issues, and allowing you to connect the dots between your emotions, thoughts, behaviours, and financial choices. Then empowering you with practical coping strategies and skills to manage your mental health and money-related challenges in a more resilient way.
Whenever you’re ready, get in touch with me to book a counselling session or to discuss how the counselling process works.
