Indeed, money doesn’t buy happiness, but realistically, a lack of money can lead to unhappiness. In practice, people with unstable personal finances often don’t have the luxury of seeking the mental help they need or even being able to focus on their mental health instead of daily practicalities. When depressed or anxious, properly managing financial issues is difficult for a variety of reasons. Let’s examine the different ways in which financial stress and mental well-being are connected.
FINANCIAL STRESS IS A POWERFUL TRIGGER
Financial stress is rarely an isolated issue. It often intertwines with other significant challenges, such as divorce, career stagnation, or physical health problems, creating a complex web of interconnected struggles. This combination can profoundly impact mental health, leading to feelings of anxiety, depression, and diminished self-esteem.
The effects of divorce on mental health serve as a powerful example of how emotional and financial challenges often go hand in hand. Divorce not only disrupts personal relationships but also frequently introduces financial instability, exacerbating feelings of stress and uncertainty. This dual burden highlights the importance of simultaneously addressing emotional and financial well-being.
When financial stress is coupled with major life changes, it can significantly lower productivity and motivation. Feelings of hopelessness can create a vicious cycle in which a lack of energy and focus further delays efforts to improve financial circumstances. Breaking this cycle requires a proactive approach, emphasizing emotional resilience and practical strategies for regaining financial stability.
HOW DECLINING MENTAL HEALTH CAN NEGATIVELY IMPACT FINANCES
The most obvious cost of declining mental health is the literal expense of seeking help — not everyone can afford therapy, especially on an average or below-average salary. However, it goes deeper than that. When you’re dealing with depression or anxiety, these issues create a bunch of secondary financial problems.
Many of us make basic mistakes while managing our finances, like daily overspending on unnecessary things. In our consumerist society, this habit is difficult enough to break. But when combined with declining mental health, finding the motivation to deal with financial hardship better becomes even harder. Plus, overspending often happens because it provides the brief dopamine hit we need when we’re feeling down. That’s why people struggling with mental health frequently make impulse purchases and have a hard time saving money.
In truth, your mental health doesn’t need to be particularly severe for this to happen. When you’re feeling even slightly depressed, buying the newest PlayStation you can’t afford makes you feel better. The same goes for buying expensive clothes and makeup or living beyond your means. There are other secondary effects to consider. For example, if your mental health distracts you from studying or doing good work, your income may go down, and your career could stagnate.
Other Practicalities To Consider
Proper money management isn’t just about earning enough and not buying expensive things. In practice, managing your finances involves a lot of smaller gestures — many of which cause temporary stress.
For instance, when you spend too much money over the weekend, it’s only logical to check your bank app and see how much you’ve spent. When you’re generally stressed out about other aspects of your life, it’s easy to put this off because it causes additional micro-stress. The same goes for paying bills and checking your credit card. In many cases, people avoid thinking about their personal finances altogether. Depending on your location, diagnosed mental disorders like depression and anxiety could also increase your insurance premiums — adding another practical monthly cost.
HOW POOR FINANCES IMPACT YOUR MENTAL HEALTH
As you can see, a decline in your mental health can cause significant financial stress. However, this is a two-way street. In most cases, financial issues detract from mental well-being and make self-compassion and healing difficult. Having a low credit score or opening a bill you can’t pay can cause imminent anxiety. If you’re already prone to anxiousness, prolonged financial issues can be a significant drain on your mental health.
With particularly difficult money troubles, many people develop insomnia. In turn, the lack of sleep affects every facet of your daily life — from school and work to your relationships. Also, dealing with all kinds of health issues is difficult without money. And deteriorating physical health has a direct impact on your mental health as well. In any of these situations, the combination of money problems and mental health issues makes having a healthy social life difficult. As a result, you might lose touch with friends and family — leading to further feelings of isolation and loneliness.
MONEY AND EMOTIONAL HEALTH
Your mental health has a direct causal link to your emotional health — and money can significantly impact both. Depending on how you handle money, just thinking about your personal finances can trigger a significant emotional response and further financial stress. The elevation lasts only a short while when you overspend to feel better. Soon, it may be displaced by a profound feeling of guilt — especially if you buy things you can’t afford. This guilt also causes shame, which makes it harder to seek professional help or discuss your spending habits with others.
For some people, the idea that they need help managing money causes further shame. Of course, this is subjective and wrong — managing money is just a skill, not a core aspect of your character. And like any skill, it can be learned, honed, and perfected. The fact that you may be overspending now does not mean you’re any less valuable as a person. Unfortunately, separating emotions from money management is tough in practice. And that’s especially true if you’re the main provider for your family. Almost everyone feels drained and worn out after a prolonged struggle with personal finances.
As you can see, financial stress and mental well-being are tightly interlinked. To put your finances in order, you need to see things clearly and without anxiety — and to work on your mental health, you need a stable financial base. Consequently, dealing with both issues at once is both difficult and imperative. However, the sooner you learn to navigate your feelings and habits related to money, the sooner you’ll get out of the vicious cycle of financial issues and degraded mental health.
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