Money makes the world go round, yet worries over finances can stop us in our tracks. Financial stress is increasingly common, with over three-quarters of Americans reporting money as their leading cause of stress. Left unaddressed, these worries can negatively impact both physical and mental health. Understanding the links between money troubles and mental wellbeing is the first step towards managing financial anxiety in a healthy way.
How Financial Stress Impacts Mental Health
Prolonged and intense financial stress can lead to a variety of mental health issues including depression, anxiety disorders, insomnia, and other conditions. Here are some of the primary ways money worries intertwine with mental health:
- Constant preoccupation and rumination: Obsessive worry about finances can lead to negative thought patterns like catastrophizing and overgeneralizing. Dwelling on money prevents us from being present.
- Feelings of loss of control: Finances often feel outside of our control, especially during recessions and periods of economic uncertainty. This can leave us feeling powerless and hopeless.
- Relationship conflict: Partners often clash over money matters, which strains romantic relationships. Financial stress is cited as a leading cause of divorce.
- Poor self-image: Our net worth and financial status is often tied to our sense of self-worth in a materialistic society. Money struggles can negatively impact self-esteem.
- Rise in mental illness symptoms: Those already managing conditions like anxiety, depression, and OCD often experience a worsening of symptoms in times of financial hardship.
- Increased substance abuse: Coping through drugs, alcohol, gambling, shopping, or other addictive behaviors often increases during financial crises.
- Isolation and withdrawal: Out of embarrassment over their difficulties, many people isolate themselves from family and friends during money struggles.
- Sleep disturbances: Worrying about unpaid bills and how to make ends meet can lead to insomnia, trouble falling asleep, and restless sleep.
The two-way relationship between financial stress and mental health issues creates a vicious cycle. Pre-existing mental health problems make coping with money troubles more difficult, while those money troubles then further exacerbate the mental health issues. Understanding this circular relationship is important when seeking solutions.
Population Vulnerable to Impact
While anyone can experience financial stress at some point, certain populations are especially vulnerable to the effects on their mental wellbeing. These include:
- Low income individuals and families: Those living in poverty or paycheck-to-paycheck are most exposed to financial uncertainty and instability.
- Young adults and students: Money is often tight for those just starting out on their own after school. Student loan debt weighs heavily.
- Seniors on fixed incomes: Managing retirement funds and living within budget can provoke anxiety, especially with unexpected medical expenses.
- Those with pre-existing mental illness: As noted above, the pre-existing condition makes coping even more difficult.
- Recently divorced or widowed: The loss of a spouse can significantly impact income and net worth. The grieving process also exacerbates effects.
- Chronically ill and disabled: Ongoing medical costs coupled with limited earning potential increases vulnerability.
While financial stress impacts all demographics, these groups tend to bear the greatest burdens when it comes to the fallout on mental health.
Coping Strategies and Getting Help
If you’re experiencing escalating stress, anxiety, and hopelessness over finances, know that you are not alone. There are many effective strategies and resources that can help you better manage the impact on your mental health. Some tips include:
- Seeking free counselling resources: Community support programs, non-profit organizations, churches, and online forums can provide free mental health support.
- Prioritizing stress management: Healthy outlets like exercise, meditation, therapy, support groups and nature time help relieve money anxieties.
- Building a budget you can stick to: Getting organized and gaining control of your finances can restore a sense of empowerment.
- Working with creditors: Communicate openly with lenders and utilize credit counselling services to lower payments.
- Exploring government programs: Federal, state and local programs exist to help with basics like food, housing, job training, and healthcare costs.
- Focusing on positivity: Make time each day to appreciate what you have. Enjoy low-cost pleasures and quality time with loved ones.
If financial stress has you feeling depressed or suicidal, immediately contact emergency services or a crisis hotline. While money troubles can seem insurmountable, know that by reaching out and adopting healthy coping strategies, you can absolutely regain your peace of mind.
How Employers Can Help
With finances being the leading cause of stress, it’s in an employer’s best interest to help reduce those pressures on their workforce. Some ways businesses can help include:
- Offering Employee Assistance Programs providing free and confidential mental health counselling.
- Hosting lunchtime seminars on budgeting, debt management and retirement planning.
- Ensuring employees are aware of all available benefits, like insurance, 401Ks, HSAs, etc.
- Creating a judgment-free culture where workers feel safe openly discussing challenges.
- Providing flexibility and compassion for those going through tough times.
- Rethinking compensation, raises and office perks in light of economic realities.
A focus on financial wellbeing programs demonstrably boosts productivity, performance, loyalty and retention. Investing in the financial and mental health of employees through creative solutions pays dividends.
Money may not buy happiness, but mounting financial stress certainly contributes to anxiety, depression and poor mental health. Understanding the causes, consequences and solutions regarding financial stress empowers us to take control. With compassion for ourselves and others, as well as sound coping strategies, we can manage money worries before they erode our mental state. Openness, inventiveness and teamwork on an individual and societal level helps ensure finances facilitate, rather than obstruct, our collective wellbeing and peace of mind.