Financial issues are a common source of mental distress, and studies show they are some of the leading causes of anxiety and depression for Americans. It is important to understand how mental health and financial health are related. Mental health and personal finances share a highly cyclical relationship, where financial strain triggers psychological distress and poor mental health compromises money management. Recognizing this feedback loop is the first step toward breaking it.
Depression Leads to Financial Strain:
Mental health struggles can impact a person’s attendance and performance at work, potentially lowering overall earnings. Poor mental health can also severely distort regular financial habits. Depression steals your energy which can make you do things like avoid opening bills or checking bank accounts. This can lead to incurring late fees and other negative issues. Depression can also trigger “retail therapy,” where impulsive spending can feel good and provide a brief emotional high – which can then lead to high debt accumulation. Overspending is often used as a temporary emotional lift to soothe sadness.
Financial Stress Leads to Depression:
A person suffering financial stress can also become depressed. Job loss, an inability to cover basic living costs and high debt all trigger feelings of helplessness that can lead to depression.
Tips To Break the Cycle:
- Get Exercise: Exercise acts as a natural “chemical factory” for the brain, stimulating the release of several key mood-enhancing chemicals that can be as effective as some medications for treating mild-to moderate depression and anxiety. Always get exercise (even for as little as 10-30 minutes) to help you feel better and turn less to spending to do so.
- Automate the Essentials: Set up auto-pay for your recurring bills so you don’t have to face the mental hurdle of manually paying them every month.
- Remove the Friction: Delete stored credit card numbers from your online shopping accounts. The extra steps required to type them in will help curb impulse purchases. Switch to cash for discretionary spending because handing over physical currency increases psychological friction. Waiting a full day before committing to any non-essential purchase over a set dollar limit is also a good idea.
- Avoid Avoidance: Face your finances in micro-doses. Instead of trying to review everything at once, set a timer (for 10 minutes) to review only one account or open one piece of mail.
- Unsubscribe: Opt out of marketing and promotional emails that are tempting and prompt unnecessary spending. Unfollow social media accounts that encourage spending.
- Separate “Wants” from “Needs”: Take a hard look at where your money is going and identify emotional spending triggers.
Professional support is also available with organizations such as Mental Health America, National Foundation for Credit Counseling and National Alliance on Mental Illness. Speaking to someone about your finances and mental health breaks the cycle of stress and secrecy. It can help reduce anxiety and helps build confidence for an actionable path forward!