3 mins read
May 2, 2023

Broke and Broken: The Toll of Financial Stress on Mental Health

Frustrated with financial stress? In this step-by-step guide, you’ll learn how financial stress impacts your mental health and how to manage your finances efficiently. It will ultimately help you to make smart financial decisions.

Financial stress is one of ever-present mental health problems. It's not hard to see why; from the cost of housing and healthcare to student loans and credit card debt, anyone can feel overwhelmed by their finances. In fact, according to a survey by the American Psychological Association, Financial hardship is the top source of stress for Americans.

But what are the actual effects of financial stress on mental well-being, and what can be done to manage it?

Frustrated with financial stress and mental health problems?

In this step-by-step guide, you’ll learn how financial stress impacts your mental health and how to manage your finances efficiently. It will ultimately help you to make smart financial decisions.

The Impact of Financial Stress on Mental Health

It's no secret that financial stressors can negatively affect mental health, cause psychological distress, and impact overall health. According to a National Institute of Mental Health study, people under financial stress and depression are likelier to suffer from depression and mental health conditions. In addition, people in debt or struggling with financial insecurity are more likely to experience insomnia, headaches, and other money-related stress symptoms.

Mental Health challenges

People's overall health can be hurt by Financial difficulties and mental health, which can make them face more emotional pain, financial anxiety, and sleep problems. A review showed strong proof of a link between financial stress and depression and that people with low means were most likely to get depressed.

In a survey by the American Psychological Association, 72% of adults reported feeling stressed about debt and mental health at least some of the time. Of those, 22% said they felt extreme financial strain about their money worries. Furthermore, the same survey by another mental health professional found that financial pressure was linked to poorer physical and mental health.

Managing Financial Stress

Given financial stress's impact on mental and physical health, it's essential to take steps to manage it. Otherwise, money worries cause long-term financial anxiety and depression. Here are a few tips for doing so:

1. Identify the source of your stress.

The first step in managing financial stress is to identify the source of your stress. Is it debt? A need for more savings? Once you know what's causing your stress, you can begin to take steps to address it.

2. Create a budget.

Creating a budget is one of the most important things you can do to manage financial stress. A budget can help you see where your money is going and identify areas where you can cut back. In addition, a budget can help you prioritize your spending, so you can make sure you're putting your money toward the things that matter most to you.

‍3. Practice self-care and mindfulness.

Financial strain often aren't solved overnight, so it's important to prioritize healthy routines to keep your stress in check. Taking care of your physical and mental health will enable you to maintain a clear mind and function at your best in the long term. Self-care includes keeping a healthy diet, getting a good night's sleep, and exercising regularly. Mindfulness can also reduce stress and help you feel more rooted in the present.

Take some time each day (even just for a few minutes) to practice a relaxation technique, whether it be a breathing exercise, meditation, journaling, some light stretching, or a bubble bath. It is also vital to have compassion for yourself during tough times because sometimes financial stress can come with self-judgment, and self-compassion is the antidote.

Research indicates that self-compassion may help reduce stress during difficult economic times. Taking care of yourself is always important, especially under financial stress. Make sure you're getting enough sleep, eating a healthy diet, and taking time to relax and unwind.

4. Seek help if you need it

If you're struggling with financial stress, it's essential to seek help if you need it. Seeking support could mean talking to a friend or family member, seeking a therapist or financial advisor, or joining a support group.

5. Create a "Free Fun" List.‍

In a world that feels like you have to pay to exist, it's important to find joyful activities that bring you peace and happiness that are also 100 percent free. Engaging in enjoyable activities can help you recharge, destress, and boost your mood. Come up with a list of free things you enjoy doing. Being proactively armed with a list of free things you can do can help reduce financial anxiety."

If you're looking for something fun to deal with your mental health conditions, here are a few budget-free options:

  • Search online for free and local events.
  • Sit outside and watch the sunset.
  • Visit the library and read a book.
  • Call a friend or schedule a time to hang out and talk.
  • Go for a walk or run.
  • Volunteer at an animal shelter.
  • Download a free language-learning app.
  • Try a free YouTube workout.
  • Journal.

Making Smarter Financial Decisions

Poor mental health issues are worse than how you deal with financial stress and depression. Spending might make you feel suitable for a short time, so you might spend too much to feel better. You might make hasty decisions about financial wellness when you have mania or hypomania.

If your money problems make it financial hardship for you to work or go to school or work, this could lower your pay. In addition to managing your financial situation, there are also steps you can take to deal with financial challenges.

Build emergency funds

Building an emergency fund can help you feel more financially secure and have good financial health. Aim to save personal finances at least three to six months' living expenses in an easily accessible account.

Pay down debt

A mental health professional suggests paying down debt as it can help reduce your financial problems and improve your problem debt. Make a plan to pay off your debts, starting with the ones with the highest interest rates.

Save for the future

Saving for the future can help you feel more financially secure and can also help you achieve long-term goals for personal finances. Consider investing in a retirement account or saving for a down payment on a home.

Live within your means

Living within your means is one of the most important things you can do to avoid financial stress. Make sure your spending aligns with your finances, and avoid taking on debt for things you can't afford. Mental health issues worse when you go for financial difficulties.

Financial Challenges to Financial Wellness

In conclusion, financial stress is a natural and pervasive mental illness for many people. It can adversely affect mental and physical health, but there are different ways you can take to manage it. By identifying the source of your financial issues, practicing self-care, and fighting mental health challenges, you can regain control of your mental health and finances and move towards a more stable and fulfilling life. Financial stress is a shared experience but doesn't have to define your life.

With the right mindset and tools, you can overcome it and thrive.

If you have a lot of money but are a lone wolf, read our blog about improving mental health for isolated men.

Do you need more health & wellness resources for your well-being? Great, we have got you covered. Click below and get access 🙂

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Disclaimer

MentalHappy, a digital health platform for mental well-being, publishes the MentalHappy blog. MentalHappy is on a mission to expand access to peer support and group therapy, especially for people of low-income, underrepresented populations, and people living in rural areas. Any general advice posted on our blog, website, or app is for informational purposes only and is not intended to replace or substitute for any medical or other advice.

Mentalhappy, Inc. makes no representations or warranties and disclaims any liability concerning any treatment, action by, or effect on anyone following the general information offered or provided within or through the blog, website, or app. If you have specific concerns or a situation arises in which you require medical advice, you should consult with an appropriately trained and qualified medical services provider.

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