Mental Health and Money: How Financial Health Affects Us

Stephen Sheehan
Jun 21, 2022

Whether you have a low bank account balance, mounting credit card debt, or expensive student loans, your financial issues can quickly take a toll on what’s most important: your mental health. After all, if you always have money problems on your mind, how can you truly enjoy everything life has to offer?

Ultimately, achieving financial freedom isn’t just important for keeping your loved ones taken care of. Mental health and money are inherently linked, and if you’re caught in a vicious cycle of overspending and not saving, it’s easy to become overwhelmed and frustrated.

Below, we’ll explore not only how money affects our lives, but also how you can take back control of your financial and mental health with simple tips and strategies you can implement immediately.

Is There a Connection Between Money and Health?

Does your savings account represent more than your financial well-being? While there are certainly exceptions, it’s clear that there’s a correlation between money issues and health.

According to Healthy People, researchers agree there is a “clear and established relationship between poverty, socioeconomic status and health outcomes, including increased risk for disease and premature death.” Specifically, the risk for chronic conditions like heart disease, diabetes, and obesity is higher among people with the lowest income and education levels.

Unfortunately, low-income individuals don’t always have the same access to nutritious foods, healthcare providers, and other critical resources as those who are spared from financial difficulties. Plus, money issues may inhibit someone’s ability to get adequate sleep, join a gym or afford other services that could provide mental and physical health benefits.

In addition to all of those realities, we can't forget that stress and anxiety over finances also greatly affect health and wellness.

We're fighting for financial fairness. Borrow up to $500 and build credit.

How Does Money Affect Mental Health?

We deal with a multitude of stressors every day. And for many people, money is at or near the top of the list. In fact, the American Psychological Association’s Stress in America survey from March 2022 showed that 72% of Americans reported feeling stressed about money at least once in the prior month.

How does your financial health impact your wellness? A 2011 study found that low levels of household income (less than $20,000 per year) are associated with several lifetime mental health issues and suicide attempts. Furthermore, the study concluded that a reduction in household income is associated with an increased risk of mood, anxiety, depression, or substance abuse disorders.

While mental health conditions like schizophrenia and bipolar disorder can exist regardless of financial stress, there’s no doubt that money problems—especially during the pandemic age—can cause major psychological disruptions on multiple levels.

Worrying about not being able to provide food, shelter, and other necessities for your loved ones can cause your self-esteem and confidence to tumble. It can also affect your ability to stick with mental health-affirming routines, or even your ability to remember to take your medication on time.

In other words, financial insecurity can cause you to feel insecure about yourself, make it harder to perform vital self-care, and contribute to poor mental health outcomes.

Focusing on Financial Health

Just because you have financial problems at the moment doesn’t mean they can’t be fixed. By improving your money management skills and focusing on the financial things you can change, you can work your way toward a healthier financial situation.

So, what short-term actions can you take to put yourself on a path to long-term success? Here are a few ways you can begin alleviating some of the money-related issues that may be affecting your mental health:

  • Make a debt repayment plan: One of the best financial decisions you can make is to reduce your debt. Don’t fret over not having the funds to pay it off right away. Grab a calculator, crunch some numbers, and set up a system where you chip away at your balance at a pace that works for you.
  • Get your credit report: It’s important to have a full grasp of your financial situation. Obtaining your credit report will provide plenty of useful information and show you where you need to make improvements. (And if there are any mistakes lurking.)
  • Set a monthly savings goal: Looking for an easy way to make your money worries go away? Set a budget and start building up your savings account. Establishing a monthly savings goal will help build a cushion against emergencies. As your safety net grows, your stress levels over money should reduce.
  • Take steps to improve your credit score: It’s no secret that a high credit score gives you more opportunities to grow your personal wealth. So, if you’re focusing on improving your financial health, you should aim to raise that three-digit number. Luckily, there are ways you can boost your score in just 30 days.

Mental Health and Money Issues Resources, Tips and Tricks

Fixing mental health and money problems may seem daunting, but there are several resources available to help you gain freedom in both arenas. And while this is a multi-step process that takes time and patience, you can take action immediately to get the ball rolling.

First, lean on support groups and professional organizations for guidance. There are many organizations dedicated to helping individuals gain financial freedom, such as Operation Hope and the National Foundation for Credit Counseling. Your public library may also have local resources that you can access for free to get support.

If your financial worries have led to suicidal thoughts, or you know someone in that situation, contact the National Suicide Prevention Lifeline at 800-273-8255. This service is available 24 hours a day in more than a dozen countries.

Remember that while financial problems can seem insurmountable, they aren't. Please reach out for help when you need it.

Additionally, money problems can lead to problems at home and can also contribute to financial abuse. Because financial issues affect entire families, it’s important to be aware of potential domestic violence issues.

Contact the National Domestic Violence Hotline at 800-799-7233 for confidential support if you or a loved one is the victim of financial abuse or domestic violence of any kind.

How else can you work on improving your mental health and financial situation? Thanks to technology, you can get help without having to leave your home.

From telemental health companies like BetterHelp to money advice services like MoneyHelper, there’s no shortage of resources you can access from your computer or smartphone.

Of course, although some e-help companies claim to be low-cost, do your research to ensure there aren’t hidden fees.

Finally, don’t underestimate the impact some simple self-care steps can have on your well-being. Here are some activities and practices you can implement to take back control of your mental health:

  • Meditating
  • Taking a walk
  • Practicing yoga
  • Journaling
  • Going for a bike ride
  • Enjoy nature by sitting in a park
  • Learning a new hobby or skill
  • Socializing with friends and family
  • Listening to motivational podcasts

Remember, there's no one path to better mental health or financial wellbeing. Take the steps that make sense for your current situation, and change the plan if it's not helping.

The Bottom Line

Mental health and money problems don’t have to be permanent. You have the power to change your financial situation, and you don’t have to undertake that task alone.

Begin by making small changes, rely on available resources for support, and appreciate every step of the journey as you work toward becoming healthier—financially and mentally. You got this.

Stephen Sheehan

Stephen Sheehan is an experienced writer and editor with a diverse portfolio. The two-time University of Florida graduate gained a deeper appreciation for his financial health while living abroad, and aims to help others become more financially independent. When he's not writing, Stephen enjoys playing rugby, strumming his guitar, working out, and cooking.

Sign up for our newsletter

Need Cash? Get up to $500* with Possible.