How money stress affects your mental health

Lerato* is a 30-year-old admin clerk who is also a single mother. Lerato herself was raised in a household where her mother was the breadwinner and supported her and her two sisters after her father passed away. She says that when she thought about having a child she didn’t realise how expensive it would be. From hospital visits to the “hidden costs” that came with the delivery of her baby, she never feels she has any reserves. Lerato’s story is relatable for many people, especially single mothers who don’t have much support.

She describes having to continuously restructure her budget as a “mind-numbing” experience. “It made me feel less ambitious and I felt my stress levels go up a lot. I actually wanted to sleep more than anything but couldn’t as I obviously have to take care of my child’s needs. At work I felt like I was on autopilot.”

Financial worries won’t only affect your wallet but have the potential to affect your mental and physical well-being – which can add even more financial burdens. Here are some ways you can help your mental well-being when it comes to money matters:

1. Look at your spending habits: Some people use impulsive or emotional spending as a way to cope with stress, anxiety or depression. This can lead to financial instability. Instead of running to spend money on an impulsive purchase, rather plan a day doing activities you enjoy and that don’t require you to spend money, like reading, taking walks in nature, hanging out with a good friend or playing games with your kids.

2. Focus on the long-term benefits: If you keep going for immediate gratification over long-term financial wisdom, it can affect your ability to save or invest wisely, and this can cause stress and anxiety. Think about how often you go shopping when you need to de-stress and end up buying something in the hope that it will make you feel better. In the moment that purchase excites you, but all you are doing is satisfying your immediate need and not thinking about the long-term consequences of an impulsive buy.

3. Prepare for the unexpected: Worrying about finances can worsen mental health issues, creating a pattern where anxiety leads to poor financial decisions, which in turn increases stress. Build up emergency savings so that you have a backup that can give you peace of mind and reduce worry about unexpected expenses. Your savings fund doesn’t have to start big, the point is to start saving a consistent amount.

4. Align your money values: Your mental well-being can influence how you think about money. You can read more about this here.

5. Deal with your debt: Mental health issues may lead to avoidance behaviours, such as ignoring debt or financial responsibilities, which can add to your stress and financial problems. Don’t avoid calls or emails from people you owe money to. Instead, reach out to them and ask how they can help you manage your debt.

6. Be honest: Constant worries about money can strain relationships, leading to disagreements and differing values regarding spending and saving. Talk to your loved ones about your financial issues and come up with ways to help you get on top of your finances.

7. Get help: Acknowledging the link between mental health and financial behaviour can empower you to seek support, whether through therapy, financial counselling, or support groups.

Having healthier money values and strategies can help both your sense of financial stability and mental well-being. As a next step, why not do our Values & Money course which helps us examine our attitudes, behaviour and values around five important money values.