Financial worries can be devastating to mental and physical health. They can also take a serious toll on relationships. In some cases, money worries lead to mental health problems that can cause poor decision-making that might make the financial problem worse.
However, the good news is that there are steps you can take towards feeling better about your finances:
1. Stop 'self medicating’ with spending:
Many people try to ‘treat’ low mood by buying things that they don’t need or indeed may not even be able to afford.
If your spending habits are tied to difficult feelings then it’s time to find a better way of dealing with those feeling than getting into debt.
When you are feeling anxious or low, instead of avoiding the issue and distracting yourself with shopping, speak to a friend or do something else that helps relax you - whether it's sporty or creative.
2. Avoid spending in ‘auto-pilot’:
Electronic payments have made spending easier, probably because when we use them we tend to focus on the benefits of spending as opposed to the costs.
Several studies have suggested that if you're handing over physical cash, you are more likely to reflect on what it took to get that cash. Indeed, Dun and Bradstreet, found that people spend 12-18% more when using credit cards instead of cash. But the fact is we are increasingly becoming a cashless society so it’s important to take account of what you are spending no matter how you pay.
Some banking apps, such as B, make it easy see how spending adds up across the month.
There are several simple steps you can also take: Don’t browse online when you’re tired or not concentrating, set up a regular on-line food shop to avoid impulse buying; give yourself a cooling off period so if you find something you want to buy think about it for 48 hours before pressing buy.
Keep a note of what you spend, even it’s just a coffee. Taking note will make you feel more aware and accountable of what you are spending.
3. Learn to budget:
While most of us know precisely what we earn, when it comes to spending many people don’t have a clear idea of where money goes.
Keeping clear, precise records of what you earn and what you spend, will allow you to make better decisions and will you a greater sense of control over your finances. Indeed, budgeting lets you to know what you really need and what’s just a fleeting want.
4. Get in the habit of saving:
Saving is key to making you feel more secure financially. It means having a buffer in case of an emergency but it also means you’re less likely to take on debt.
While it might be hard to start, eventually as you see those pennies adding up, you’ll get a real sense of accomplishment and it will become a habit that’s easier to do.
5. Don’t be afraid to ask for help if you need it:
We live in a world that makes us feel 'less than' when we don’t have enough money so many people feel ashamed to ask for help when they are in financial difficulty.
It’s because of this that they deny it, first to others and then to themselves. Ignoring reality is a handy defence mechanism, it’s a way to rationalise mistakes. The problem is that reality always sets in. The fact is, that like an any other area of life, be it health or fitness, sometimes we need professional support to get back on track.
Don’t avoid the problem - face it head on and get the help you need. You can speak to a financial advisor or take classes on basic money management that will help you plan out a budget and do the things you need to become more financially secure.
6. Take it day by day:
Change is hard. We are creatures of habit and it always easier to fall back into old ways of behaving. It’s important to see the changes that you are making not as quick fixes but rather as deep-rooted changes to the way that you think about spending.
Have realistic goals and don’t panic if you don’t manage to meet them once in a while. Remind yourself daily why it's important that you are making these changes keeping in mind the emotional and health benefits.
Like any healthy lifestyle change, the costs tend to be immediate and the benefits more long term, so being able to delay gratification is key – and, the thing is, while it may be hard to start with, the longer you stick at it the easier it will become.
The act of valuing yourself enough to make these positive changes will make you feel about your finances and your sense of wellbeing overall.
If you’re still not convinced about the value of getting to grips with your finances, many researchers have studied the subjects and shown how important it is.
According to recent research from the University of Nottingham, people who struggle with debt are more than twice as likely to suffer from depression, (Debt and Depression: Causal Links and Social Norm Effects: John Gathergood Volume 122, Issue 563 September 2012 -PG 1094–1114).
Indeed the emotional impact of debt worry can cause a ripple effect, affecting physical health and showing up in symptoms such as lack of sleep, increased blood pressure and even heart problems. Research also suggests that triggers such as constant worry about money, feelings of being overwhelmed, and feeling hopeless lead to severe anxiety with almost a third of people with high debt stress also reporting severe anxiety.
These findings have been replicated in several other studies, Social Science and Medicine looked at household financial debt and its impact on mental and physical health and, unsurprisingly, found that high amounts of debt were associated with higher rates of stress and depression (The High Price of Debt: Household financial debt and its impact on mental and physical health Soc Sci Med. 2013 Aug; 91: 94–100.Elizabeth Sweet, Arijit Nandi, Emma Adam and Thomas McDade).
And the Royal College of Psychiatrists examined the findings of more than 50 research papers and researchers found that men and women with higher poorer credit behaviour were more likely to report depressive symptoms (Mental Health What Do We Know? What Should We Do? Chris Fitch, Sarah Hamilton, Paul Basset and Ryan Davey).
Financial problems have even been found to deeply affect the choices that we make in our relationships, with Researchers at the University of Wisconsin suggesting that high levels of debt contributed to reduced marriage rates among young adults.
The impact of debt is particularly hard when it touches our relationships. A spouse or partner may become resentful as a way of coping with debt. It isn’t uncommon to blame your partner for coming into the relationship with more debt, losing a job, or even their spending habits. Indeed, according to Sonya Britt, assistant professor of family studies at Kansas State University, arguments about money are amongst the top predictors of divorce.
The relationship between the way we think about and manage our finances and our mental health is actually circular and can therefore lead to a vicious cycle.
The fact is worrying about debt and feeling insecure in our financial situation can lead to mental health problems such as anxiety and stress which can, in turn, contribute to poor decision-making around how we manage our finances.
Basically, the worse we feel, the less likely we are to make good fiscal choices and the poorer our choices, then, the worse we feel. To complicate things further, this will affect the other people in the household and can potentially flow over into the workplace.
Our sense of worth is often linked to feeling safe and secure and, given that our finances can easily disrupt those feelings, then it’s important to take some time to think about how we can deal with them in a way that gives us a sense of control and security.
A bit about the writer
Dr. Linda Papadopoulos is one of the most well-known and respected psychologists working in the UK today. Her 17 year career as a research scientist and practicing psychologist has led to her work being published in some of the most well-regarded academic journals and given rise to a high profile media-career.
Written by Dr Linda Papadopoulos
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