Money and mental health: how to cope with financial worries
Your financial circumstances can have a big impact on your mental health. Find out what steps you can take to prioritise your wellbeing.
Around 7.4 million Brits are struggling to pay their bills, according to the Financial Conduct Authority (FCA).
While UK inflation has recently fallen, energy costs have remained high, so millions are struggling – the effects of which can be devastating for our mental health.
Find out what simple steps you can take to resolve your financial struggles and what you can do to prioritise your mental health.
How can money affect your mental health?
Money plays a big role in your wellbeing, so if you are going through a difficult time with your finances, it’s understandably challenging.
Whatever stage of life you’re at and your outgoings, it can be difficult to remain balanced if you’re seriously worried about your future.
The relationship between money and mental health is often described as a vicious cycle as not only do people with mental health conditions often have a worse relationship with money, but finding yourself in financial trouble can impact your mental health.
According to mental health charity Mind, people struggling with money can often be forced to go without food, water and living essentials.
People will often develop sleeping problems and will start to experience feelings of anxiety and panic when it comes to discussing their finances.
And while money problems can affect anyone, people with pre-existing mental health conditions are also more likely to end up with disproportionately worse outcomes when it comes to managing money.
Research by the Money and Mental Health Institute shows that during the pandemic, people with mental health problems were three times more likely to fall into debt, were twice as likely to borrow money to cover everyday spending and were much more likely to have no savings to fall back on.
Money problems can affect everyone, regardless of how much they earn and their mental health, but there are some steps you can take to improve your financial situation.
How to recognise signs of money problems
Everyone’s relationship with money will be different, but there are some common symptoms frequently associated with potential money concerns to be aware of.
Many people experiencing money anxiety or having financial problems will often:
Feel guilty for spending money, even if they can afford it
Be afraid to speak to the bank or avoid checking their balance as much as possible
Feel too ashamed to reach out for money advice
Be stressed, especially if they have additional caring responsibilities, such as children
May have previously experienced financial abuse
Borrow money to meet day-to-day costs
Struggle to save for the future
Aren’t sure where to find the right financial advice
Even if you aren’t currently having problems with money, thinking about how your finances make you feel can still help you to prepare in case you do face problems in the future.
Take some time to think about:
How does spending money make you feel? Do you feel guilty or ashamed?
Are there times when you’re more likely to spend or save money?
Are there times when you feel more or less in control of your spending?
Are there aspects of money management that make you feel noticeably worse? For example, attending universal credit assessments or opening envelopes?
How to manage your money wisely
Finding yourself facing money problems can be an uncomfortable and difficult situation, but it’s vital to remember that anyone can fall into financial hardship and that you’re not alone.
Unfortunately, due to the taboo and stigma surrounding money, it’s easy to feel like you’re isolated and that your issues are somehow your fault.
Regardless of your financial circumstances, there are some simple steps you can take to improve your financial situation and potentially your mental health.
If you have outstanding debts, are struggling to meet your costs or want advice, you should consider speaking to an agency or charity, such as Citizens Advice, Shelter, StepChange or Samaritans.
These charities can help you establish the steps needed to resolve your financial issues and, in some cases, will even speak to parties that you are in debt with.
If you’re struggling to pay off interest on any loans, you could use the government-backed Breathing Space scheme. It is designed to give you time to figure out how best to meet your debt payments and to get the right advice.
Seeking the right money advice can make a big difference to your circumstances and can prove far more valuable than the price of not finding the advice you need.
Or, if you’ve recently been made redundant or are sick and unable to work, you could consider claiming universal credit or personal independent payment (PIP).
Many people will feel anxious, stressed, uncomfortable or ashamed when completing a benefits assessment, but it’s important to note these payments are here to help you if you find yourself without an income, or need support.
The process of claiming universal credit can take several weeks, so it’s important to apply as soon as you know you’ll be without an income.
Tips for improving your financial circumstances
If you have a regular source of income, there are some simple steps you can take to save for the future and to ensure that your money isn’t a source of constant anxiety for you.
These steps can include:
Paying off any outstanding debts and arrears.
Setting aside a portion of your monthly earnings each month. It’s a good idea to build up enough savings to cover at least three month’s worth of expenses.
Budgeting for your essentials and setting aside weekly or monthly spending limits can help you see where you could be using your money better.
Incorporate money or banking activities into a regular routine, so you can become more comfortable when it comes to dealing with your money.
Whatever your circumstances, it’s important to remember that when it comes to money troubles, you’re not alone.
Whether you need someone to talk to or need help when it comes to managing your money, there are steps you can take to improve your financial situation.