Money and mental health are intricately linked, as financial stress and instability can have detrimental effects on one’s mental health and overall well-being. In contrast, having sufficient financial resources can contribute positively to mental health by alleviating stress and enabling access to resources and treatment.
The Relationship Between Money And Mental Health
Money plays a crucial role in individuals’ lives by providing access to resources and opportunities that can improve one’s well-being and serve as a symbol of success, status, and self-worth. It operates as a reinforcement that can influence an individual’s 1 Ljungqvist, I., Topor, A., Forssell, H., Svensson, I., & Davidson, L. (2016). Money and Mental Illness: A Study of the Relationship Between Poverty and Serious Psychological Problems. Community mental health journal, 52(7), 842–850. https://doi.org/10.1007/s10597-015-9950-9 mental health and overall quality of life.
Therefore, understanding the relationship between wealth and mental illness is essential for achieving a healthy and balanced life. However, despite its importance, only 33 percent 2 Van Nguyen, H., Ha, G. H., Nguyen, D. N., Doan, A. H., & Phan, H. T. (2022). Understanding financial literacy and associated factors among adult population in a low-middle income country. Heliyon, 8(6), e09638. https://doi.org/10.1016/j.heliyon.2022.e09638 of adults worldwide are considered financially literate.
Improving financial literacy can help individuals make informed decisions about money, reduce financial stress, and improve mental health outcomes.
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How Does Money Affect Mental Health?
Money can have a significant impact 3 Golberstein E. (2015). The effects of income on mental health: evidence from the social security notch. The journal of mental health policy and economics, 18(1), 27–37. on an individual’s mental health in several ways:
- Financial stress can cause significant anxiety by creating uncertainty about the future, especially when individuals are facing major financial difficulties.
- When individuals feel that they have no control over their financial situation, they may experience feelings of helplessness, which can contribute to depression.
- Financial debt can lead to feelings of shame and embarrassment, which may cause increased stress.
- Financial stress also affects mental health through poor decision-making and risk-taking behaviors, such as overspending and gambling, etc.
- Conversely, excessive wealth 4 Kudrna, L., & Kushlev, K. (2022). Money Does Not Always Buy Happiness, but Are Richer People Less Happy in Their Daily Lives? It Depends on How You Analyze Income. Frontiers in psychology, 13, 883137. https://doi.org/10.3389/fpsyg.2022.883137 can lead to a preoccupation with money and a decrease in overall life satisfaction.
- The pressure to maintain wealth, status, and a certain lifestyle can be overwhelming and lead to stress, anxiety, and other mental health issues.
- People with a lot of wealth may feel that others are only interested in them because of their money, which can create a sense of distrust.
Financial Wellness And Mental Health
Here are some points that explain the importance 5 Cheung, F., & Lucas, R. E. (2015). When does money matter most? Examining the association between income and life satisfaction over the life course. Psychology and aging, 30(1), 120–135. https://doi.org/10.1037/a0038682 of mental health and money management:
- Money can support social connections by enabling individuals to participate in social activities and events.
- Financial resources can promote physical health through access to nutritious food choices and scope for physical and mental health check-ups.
- Knowing that financial needs are being met can provide a sense of peace of mind and reduce the stress associated with financial worries.
- Money can provide opportunities for personal growth and development, such as pursuing education or travel.
- Being financially independent can enhance self-esteem and confidence, which can positively impact mental health.
How Poor Mental Health Affects Money Management
Poor mental health can have a significant impact 6 Knapp, M., & Wong, G. (2020). Economics and mental health: the current scenario. World psychiatry : official journal of the World Psychiatric Association (WPA), 19(1), 3–14. https://doi.org/10.1002/wps.20692 on the way individuals deal with money, including:
- Engaging in impulsive spending, and using shopping as a coping mechanism to deal with their emotional distress.
- Avoid dealing with financial responsibilities, such as paying bills, budgeting, or managing their bank accounts.
- A reluctance or poor motivation or focus to plan for long-term financial goals, such as saving for retirement.
Tips To Reduce Monetary Stress On Mental Health
Here are some ways 7 Ryu, S., & Fan, L. (2023). The Relationship Between Financial Worries and Psychological Distress Among U.S. Adults. Journal of family and economic issues, 44(1), 16–33. https://doi.org/10.1007/s10834-022-09820-9 to reduce monetary stress and promote positive mental health:
- Create a budget that can help you in managing money, prioritize expenses, and reduce unnecessary spending.
- Make sure to keep a record or a list of all your expenses, so you can easily monitor your money.
- Consult a financial advisor or credit counselor who can provide insights about managing finances and reducing debt.
- Mindfulness practices such as meditation and yoga can help you in managing stress and promote positive mental health.
- Avoid comparing oneself to others financially which can lead to feelings of inadequacy of wealth and mental health.
- Try to recognize the triggering emotions that arise in relation to finances and money.
- If you are experiencing psychological issues related to money, it is recommended to speak with a trained mental health professional.
Takeaway
The relationship between financial wellness and mental health is multifaceted. While financial stability and resources can positively impact mental health by reducing stress and enhancing overall well-being, it is important to recognize that money is not the sole determinant of mental health.
Therefore, it is important to prioritize a balanced approach to life that incorporates financial stability with other factors that contribute to overall mental health and well-being.
At A Glance
- Money and mental health are interconnected in several ways.
- Financial stability and resources can reduce stress and anxiety, positively impacting mental health.
- Financial independence can enhance self-esteem, confidence, and overall well-being.
- Financial stress affects mental health and can lead to feelings of shame and embarrassment, which may cause increased stress.
- Poor mental health can negatively affect the way individuals handle money by causing impulsive spending.
- To reduce monetary stress on mental health, one can create a budget and gain financial awareness and seek advice.
Frequently Asked Questions (FAQs)
1. Can therapy help with money-related stress and anxiety?
Through therapy, individuals can learn to identify and challenge psychological issues with money, develop practical skills for managing finances, and increase self-awareness and self-compassion. Additionally, therapists can help individuals address underlying mental health issues that may be contributing to financial stress and anxiety, such as depression or anxiety disorders.
2. What resources are available for individuals who are struggling with financial stress and its impact on mental health?
Individuals who are struggling with financial stress and its impact on mental health can seek support from non-profit organizations, government agencies, online resources and apps, and mental health professionals. It is important to evaluate the credibility and qualifications of any resources or professionals before seeking their services.
3. Is money more important than mental health?
Without good mental health, it can be difficult to enjoy the benefits of financial stability, and financial stress can actually worsen mental health. Therefore, it is important to prioritize both mental health and financial well-being.
4. Is saving money good for your mental health?
Saving money can provide a sense of control and accomplishment, which can boost self-esteem and confidence. However, it is important to balance saving with other aspects of life, such as social connections and self-care, as neglecting these can also negatively impact mental health.
