Money and Your Mental Health

Money and Your Mental Health

All but the wealthy feel the pinch in a cost-of-living crisis. As the price of basic essentials continually rises, many of us are left struggling to make ends meet. Some even face a stark choice of putting food on the table for their family or keeping their home warm. Pressures like these can trigger financial anxieties that have a significant negative impact on mental health.


Feeling down at times is a natural reaction when you’re faced with money worries. But if the situation starts to overwhelm you as you constantly struggle to make ends meet, it can turn your life into a waking nightmare of issues that can easily spiral out of control.

This can result in mental health problems that may make it more difficult to maintain a steady income. Managing money also becomes harder, and getting into debt is an ever-present risk.

Common Money Worries

Research by the Mental Health Foundation in 2022 showed that people’s most pressing financial concerns were:

  • Being unable to maintain their standard of living.
  • Heating their home.
  • Paying monthly household bills.
  • Not having enough money to buy food.

Mental Health Problems Caused by Lack of Money

Concerns about lack of money can impact almost every aspect of our personal and professional lives, including relationships.

Money worries have been linked to emotional and psychological issues such as:

  • Stress.
  • Depression.
  • Low self-esteem.
  • Feelings of shame or guilt.

When money worries such as these become increasingly part of your everyday life, it can result in financial anxiety.

What Is Financial Anxiety?

Financial anxiety occurs when concerns about lack of money begin to escalate. Worries often revolve around debts, income, job security, and the ability to afford necessities and non-essentials.

These issues are becoming increasingly prevalent during the current cost-of-living crisis.

According to the Office for National Statistics, 77 percent of us are worried about rising prices. Not surprisingly, those with the most serious concerns included those on low incomes.

A survey by the Mental Health Foundation also found that stress and anxiety about personal finances were widespread, with 10 percent experiencing feelings of  hopelessness.

And the organisation warned that the situation would get significantly worse unless the government provided more support for the most vulnerable.

Signs of Financial Anxiety

Financial anxiety is not regarded a medical disorder in itself but it may be a contributing factor. Signs that you might be experiencing financial anxiety include:

  • Fears that your financial problems will escalate.
  • Constantly worrying about your ability to pay bills.
  • Repeatedly checking your bank account.
  • A feeling of dread when you get a bill.
  • Difficulty sleeping.
  • Trouble concentrating.
  • Feelings of impending doom.
  • Irritability.
  • Loss of appetite.

How to Protect Your Mental Health During Financial Difficulties

If you’re struggling with mental health issues due to lack of money, there are various self-care measures you can take that may help counter anxious thoughts.

It’s important to realise that certain problems triggering your anxiety – job loss through redundancy, for instance – may be outside your control and take time to overcome. Keep in mind that things can change.

Cognitive behavioural therapy techniques can help you focus on what you can control.

It can also help to talk confidentially about your money worries with a friend or family member you trust. Getting someone else’s perspective on a problem can help you figure out ways to deal with it.

A further way to help cope with stress is by staying active and eating healthily – physical health often impacts emotional wellbeing.

Professional Help

Help is available from medical professionals and debt counsellors if you feel you can’t cope alone with anxiety over your personal finances.

Your GP can refer you to services specialising in talking therapy, and you can get practical advice on managing debt from organisations like StepChange Debt Charity.

How to Take Control of Your Finances

A budget to balance your income and outgoings is essential to take control of your personal finances and ease stress over money.

Work out your net income – wages or self-employed earnings after tax, or benefits. Then list your monthly expenses such as mortgage or rent, utility bills, groceries, entertainment, and loan repayments.

If your expenses are exceeding your income, your budget should give you a clear idea of where you can rein in spending on non-essentials.

Review your budget monthly so you can make adjustments. Your income will likely fluctuate if you’re self-employed or on a commission-based salary, for example, and the cost of groceries and utility bills such as energy costs often rise.

Budgeting can be also be an effective part of managing debt.

How to Manage Debt When You Have a Mental Health Problem

Resolving debt problems depends on the type of debts you have, the total amount you owe, and how much you can afford to pay off your debt.

In general, debt management entails assessing your financial situation, formulating a plan to pay off your debts, and putting in place strategies to avoid future debt-related issues.

This is crucial for your financial health and protecting your mental wellbeing. But debt management can seem overwhelming if you already have a mental health issue.

Help is available, though.

If you’re receiving mental health crisis care, you can get temporary relief from debt issues under the Debt Respite Scheme (Breathing Space) scheme. This gives you legal protection against creditor action for as long as you’re receiving crisis care treatment, plus 30 days.

And if your debt issues have resulted in a drop in your credit score, you can get help on overcoming the emotional and psychological effects of bad credit.

Final Thoughts on Money and Mental Health

Concerns about your personal finances can negatively impact your mental health, and the situation can become a vicious circle. Poor mental health makes it harder to manage your money, and the ensuing increasing problems make your mental health worse.

However, financial anxiety can be alleviated by taking steps to safeguard your mental wellbeing and knowing how to get the support you need to restore both your financial health and your mental health.

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