5 ways to tackle the link between money worries and your mental health

It’s an unquestionable fact that stress is bad for your health.

Did you know, though, that research from University College London has found that financial stress is the most detrimental to biological health – more than divorce or even a bereavement?

In a recent study, Moneybox found that:

• Nearly half of people said they have financial regrets that made them feel stressed about their current financial situation
• 28% of people said that stretched finances had caused them stress
• 27% said financial stress has negatively impacted their mental health.

There is a close link between financial worries and mental health so, with Mental Health Awareness Week taking place between 13 and 19 May, here are five positive ways to tackle the link between money and stress.

1. Studies show that mental health and financial stress are linked

You will often find there is a circular relationship between your financial worries and your mental health.

Source: Money and Mental Health

Indeed, 72% of respondents to a Money and Mental Health survey said that their mental health problems had made their financial situation worse.

Identifying the link between the two can be a positive way to start to deal with some of your big concerns.

Try setting aside at least half an hour each week to work on your personal finances. That might mean going through your bank statements and checking where you are spending money, or creating a budget and trying to stick to it.

Over the course of a year, half an hour a week will result in 26 hours dedicated to improving your financial situation and reducing your financial stress.

2. Debt can cause specific mental health concerns

Money and Mental Health say that almost one in five (18%) people with mental health problems are in problem debt. Moreover, people experiencing mental health problems are three and a half times more likely to be in problem debt than people without mental health problems.

Worrying about how you will make the repayments on a mortgage, credit card, or loan can be a terrific source of stress.

If your debts are keeping you awake, seek help. You might want to speak to a debt advice helpline like Citizens Advice, or you could speak directly to your creditors. Many organisations will offer tailored solutions if you’re struggling with debt, and these could help you regain control of your situation.

3. Mental health worries may make it harder for you to generate the income you need

If you’re struggling with your mental health, you may find it more difficult to generate an income. This can have a circular effect as, if you’re finding it hard to earn, this may magnify your financial concerns.

Money and Mental Health report that the income gap for those with mental health problems is significant. People with anxiety and depression have a median gross annual income of £8,400 less than that of people without those conditions.

Additionally, people with mental health problems are more likely to receive benefits, which provide a low level of financial support.

Acute episodes of mental health problems can also disrupt your income if you are struggling to attend work. In England in 2018, 23,000 people were struggling with problem debt while in hospital for their mental health, with thousands more managing debt in the care of a crisis team in the community.

If you’re worried about what you would do if you were unable to work, consider:

• Building up an emergency fund while you’re in work. This will give you the peace of mind that you have money to fall back on if you can’t work.
• Putting income protection in place. This can provide you with a regular income to enable you to meet your regular commitments if you’re unable to work. According to insurer LV= mental health is one of the most common reasons for an income protection claim.

The NHS also suggests that relaxation techniques and meditation can help you feel calmer, which may help with feelings of anxiety about money.

4. If you have mental health concerns, money worries can slow your recovery

Another unfortunate link between financial concerns and poor mental health is that financial difficulty drastically reduces recovery rates for common mental health conditions.

In fact, people with depression and problem debt are 4.2 times more likely to still have depression 18 months later than people without financial concerns.

It’s worth remembering that you’re unlikely to be able to get rid of your financial worries overnight. Progress will take time, so acknowledge that it is a process and be kind to yourself.

There will always be unforeseen events that may blow you off course but keeping the end goal in mind – whatever that looks like for you – is a great way to ensure you’re always moving in the right direction.

5. Money can be a taboo subject, so you may be facing financial worries alone

Talking about money remains a huge taboo among people of all generations. The stigma around debt, or worries about affording essentials during a cost of living crisis, may mean you struggle to ask for help.

The impact on your mental health can be exacerbated if you have to accept a lower standard of living, or if your creditors are becoming increasingly insistent or aggressive.

Talking about your issues could help – after all, a problem shared is a problem halved. Here are three sources of help you could approach:

• Mental Health and Money Advice is an online advice service that can provide support for both mental health and financial problems.
• Mind offers support online and by phone (0300 123 3393).
• Citizens Advice can offer help with debt and financial worries.

You could also seek advice from a financial professional if you’re worried about your investments or whether you’ve saved enough for your retirement.

Research from Royal London found that people who worked with a financial planner were more financially secure and stable, less anxious about their household finances, and more prepared to cope with life’s shocks.

Get in touch

If you’d like to explore how we can help you take control of your finances and reduce your money stress, please get in touch.

Email enquiries@blackswanfp.co.uk or contact your adviser on 020 3828 8100.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.