Money can be a huge factor in stress, anxiety, and even depression. It directly affects our mood and mental state as financial worries arise. Money and mental health are deeply connected to each other. If you experience financial troubles, your mental health is negatively affected, and, if you’re experiencing negative mental health, your money management abilities are impacted.
With the cost-of-living crisis, the pressures for stable finances increase as it’s more expensive to afford daily living. This has caused more and more people to experience financial stress and worries. It’s important to understand the connection between money and mental health and how you can look after yourself and your money to prevent serious mental health issues from occurring.
What is financial stress?
Financial stress is basically feeling worried or anxious about money and your financial situation. It could be daily concerns, such as not having enough money to cover basic needs, or it could be in terms of not being able to save to reach personal goals or manage your debt. Experiencing financial stress can be overwhelming and it can significantly impact your mood and mental health, leading to a negative headspace and mental health issues.
How money can impact your mental health
It is completely normal to experience negative emotions when faced with money issues and everyone can struggle with their feelings about money. However, it becomes a worry and a problem when you find it very difficult to deal with money problems. This is when it significantly impacts your mental health and even your overall health! Your mental health can be affected by money in various ways:
- Stress, anxiety, and depression: Constantly worrying about your money can lead to feeling anxious, stressed, and depressed.
- Lack of sleep: Worrying about money can keep you up at night and prevent you from going to sleep. You can lie there awake doing calculations or wondering how you’re going to afford basic living. This can delay your mind switching off and can even lead to insomnia or disturbed sleep.
- Low self-esteem: You can experience lower self-esteem and feel guilty or ashamed if you feel like you’re not earning enough or are unemployed.
- Avoiding socializing: Feelings of wanting to avoid others or cancel plans with friends and family can increase. You can withdraw from socializing and social activities due to worrying about money and having a lack of funds. You may also feel embarrassed and don’t want anyone else to know.
- Physical health issues: Stressing about money for a long time can turn into physical health issues, such as digestive issues, headaches, and a weak immune system.
How your mental health can affect your money management
Experiencing negative health issues can also directly impact the way you manage your money, leading to bad habits that can make your financial situation worse, such as:
- Avoiding or ignoring money problems: You can start to leave bills unopened or ignore them and not pay, or you can put off not seeking money advice. This can lead to more debt issues and grow your negative financial situation.
- Staying at home and skipping meals: Having financial worries can prevent you from going out with family and friends, and even not eating properly in an attempt to save money. This can lead to social isolation and loneliness.
- Spending more: Your spending habits and patterns can increase by overspending on items you don’t really need but want. This can occur to help you feel better and lift your mood.
How to care for your mental health when you have money worries
If you experience money worries and financial stress, it’s vital to put yourself first and care for your mental health. There are many ways to help prevent serious mental health issues when faced with money problems. Try some of the strategies below to care for your mental health, helping to banish financial stress and everything that comes with it.
Be kind to yourself
When you experience money worries, it is important to be kind to yourself. Have self-compassion to help your mental well-being. This helps you get in the right headspace to be able to deal with your money problems. Don’t blame yourself for this happening and accept that it may be out of your control to help you feel calmer.
Talk to others
It can help your mental health if you reach out to someone and confide in them about your money issues. This could be a close friend or family member, someone who you trust. Talking to someone confidentially can lift a weight off your shoulders and help you determine how you feel or what to do next.
Take a breather with breathwork or meditation
Using relaxation strategies and meditation can help you feel calmer and give you that space away from your worries to breathe. Doing these can help reduce feelings of anxiety about money. Having time to pause and focus on your breathing can make you more present and banish worrying or negative thoughts.
Have self-care routines
Keeping to a self-care routine can give you a sense of purpose and boost your mood. Implementing self-care routines can be difficult when you’re experiencing financial stress, so it’s ideal to start with the basic self-care needs. This could be focusing on going to bed and getting up at the same time every day.
Practical strategies for managing your financial stress
Another way to reduce your financial stress is to implement practical strategies into your daily life to manage your money better.
Understand your money habits
Before you can effectively manage your money, you need to fully understand your money habits by deep diving into your finances. To do this, you could monitor your banking app, look at your statements, and put them into a spreadsheet or list. Try asking questions such as, “What is the wage I take home every month?” and “How much are my fixed monthly bills?” to determine what money you have left over and where that money is going.
Use tools to manage expenditures and money
To help you manage your money more effectively, you can use tools that help you calculate your expenditures and reduce them. You can also use budgeting tools to help you save money and put money towards the necessary things in life, helping you to have more funds and less stress. You can even use tools for mandatory obligations, such as using a Zakat calculator for 2025 if you need to pay Zakat, or apps to keep you constantly in sync with your money and spending.
Have a monthly budget
Creating a monthly budget helps you to balance money coming in and going out. Doing this can make you feel more in control of your money and, therefore, less stressed, anxious, and depressed over your finances. Aim to give yourself a consistent time to work out what you can spend each week and month. Budgeting is a great way to manage any debts or prevent them from occurring.
Get professional help when needed
Struggling with money or debt is an overwhelming experience and it can feel as if there’s no way out. However, you can get financial advice and support from professionals who can educate you about financial management, help you with your situation, and bring relief to your worries. It’s better to get help as soon as possible with money issues or debt to help you get back on your feet as soon as possible!
Money can have a huge negative impact on your mental health and can allow you to experience serious mental health issues that are hard to manage. Understanding the connection between money and mental health and implementing strategies to look after yourself and your money can turn your finances around and help you get back on track.