Money and the impact on Mental Health

Learning how mental health and money are connected is an important aspect of keeping a balanced lifestyle. Planning your finances might feel like an overwhelming task. And lots of things may be out of your control. But having a plan and understanding how your mental health can affect the way you deal with money, can keep you on track.

I would like to think that we all know all too well how our mental health can affect the way we deal with money. If we're feeling low or depressed, we can lack the motivation to manage our finances. It might not feel worth trying. Thinking of the future is hard when you are not motivated to do so. Burying our heads in the sand is generally not a solution that yields results. For those struggling, if your mental health affects your ability to work, this can reduce your income and put more pressure on you. It is easy to see how the downward spiral of despair perpetuates more misery.

However, there is the flip side. Spending can give us a brief high, a release of dopamine that offers a welcome relief to the daily grind. I’ve been known to splash out to make myself feel better on occasion – impromptu trips away, tickets to sporting events, lavish nights out - We can often overspend to make ourselves feel better. These impulsive financial decisions are driven by our emotions rather than our logic, chasing those short-term highs that will often not bring us the long-term relief we are seeking.

It’s clear to see how our mental health can affect our decisions when it comes to our finances, but what about the other way round. Can our financial situation affect our mental health?

The financial situations we face throughout our lifetime and likely to trigger feelings of anxiety and panic. Purchasing a house, our children’s education fees, and the big one retirement! Worrying about money can lead to sleep problems, staying awake and running over the problem many, many, many times in our minds. (I’m a monster on a lack of sleep and after the birth of my children, the sleepless nights certainly tested my patience to the limit – And my Wife’s!). ?It’s no surprise money problems can affect your social life and relationships. If you can’t afford to do the things you want to, this can cause feelings of loneliness or isolation.

A common misconception is that one must have significant debts for money to affect their mental health. Although debt is a common cause and effect of poor mental health, many people can feel guilty for spending money, even if they know they can afford it? Why do we restrict ourselves if we don’t need to? Many of us will be under pressure to support others and this may drive unhealthy work habits – Keeping the balance between work and home life is something that I’m sure many of us suffer with.

Let’s be honest, we are not guaranteed to be happy, just because we have money. Even for those who have money, the emotional connection to money, and the way we think about money can influence our decisions. And these could have huge impacts on our future state of mind.

Remember Steve Jobs? He had money, a lot of it by all accounts. In his own words… "I reached the pinnacle of success in the business world. In others’ eyes, my life is the epitome of success. However, aside from work, I have little joy. In the end, wealth is only a fact of life that I am accustomed to. At this moment, lying on the sick bed and recalling my whole life, I realize that all the recognition and wealth that I took so much pride in, have paled and become meaningless in the face of impending death.”

OK so Steve Jobs is an extreme example, but a key question to ask is: What is it all for? What do you want to achieve? And at what cost? Having clear goals and objectives is essential. If you don’t know where you're headed, you’ll never get there! We might not know explicitly what we want, particularly if we’ve just started on our journey, but narrowing down options and planning for likely scenarios gives us the stability and guide rails to keep us on track.

Many of the financial decisions that we will make will have far-reaching consequences. Some decisions will be big ones – taking a new job, relocating the family, buying that dream home - but understanding the little decisions we make frequently make can help us move forward on the right path too.

You might find it helpful to take some time to think about how you feel about money and why. For example, if you've struggled with money in the past or didn’t have much money growing up, this might affect the way you feel about money now. You could try answering these questions:

Are there certain times when you’re more likely to spend money?

Are there certain times when you’re more likely to save money?

How does it feel when you spend money?

Do you feel differently when you’re spending and saving?

What are the emotions and feelings you think of when you think about money?

Which aspects of dealing with money make your mental health worse?

Once you’ve done this, you might start to feel like you understand your habits and patterns around money a bit more. Knowing these could help you plan for difficult times.

Having plans give us structure and a framework to work within. We can allow flexibility and allow ourselves to be human. Using trusted advisers who understand money but also the emotional impact of money is important to keeping balance. And remember, what one person does is not necessarily relevant to you or what others should do. We are all individuals. We all must find a balance in our own circumstances.