In America today, just about all of us face money problems or money related stress. Financial stress can deeply affect our mental health and financial health, sometimes leading to serious consequences for our overall well-being.

Coming out of a global pandemic, more and more people are having conversations about mental health.

Regardless of your financial situation or the specifics of your money problems, we want to help break down the link between money and mental health, then give some tips on how to manage stress and manage money.

Understanding how your financial situation ties into your mental health and physical health is step one, with step two being learning some effective strategies to manage stress and relieve stress about money.

What is Financial Health?

Your financial health refers to your financial well-being, defined by effectively managing your income, expenses, savings, and any investments.

It includes the ability to keep up with your everyday expenses and obligations, build savings, and plan for the future while managing debt, keeping it within manageable levels.

A financially healthy person has steady income to cover everyday expenses, uses a monthly budget to track spending habits, and prioritizes putting money into your bank account for emergencies and long-term goals.

Financial health also involves understanding and actively managing credit, making informed financial decisions, and having the knowledge and resources to navigate financial challenges with confidence and resilience.

Ultimately, financial health provides a sense of security, stability, and empowerment in all your financial matters.

What Does Financial Stress Mean?

Financial stress refers to the emotional strain and anxiety caused by financial problems or financial worries. These could be debt stress, lack of financial support, financial struggles or financial hardship, worries about the future, or just feeling overwhelmed by your financial situation.

Financial problems can lead to poor mental health and worse physical health, often manifesting in symptoms like insomnia, irritability, and difficulty concentrating.

Financial difficulties or financial worries are a common source of stress for individuals and families alike.

Whether it’s struggling to make ends meet, dealing with debt, or worrying about saving enough for retirement, these financial worries and money problems can take a toll on our overall well-being.

The impact of financial stress and money problems extends beyond our bank balance —it affects our relationships, work, social life, and overall quality of life.

The Link Between Financial Stress and Mental Health

The relationship between financial stress and mental health is complex. The bottom line though, is that money and mental health are linked.

Poor mental health can contribute to financial problems, and financial problems can lead to poor mental health.

Scientific studies have consistently shown that people experiencing financial stress are more likely to report mental health problems such as anxiety and depression.

When we experience financial stress, our stress levels rise, triggering responses in our bodies that can affect our mental and physical health.

Chronic stress (which financial stress can contribute to) has been linked to increased risk of heart disease and making mental health problems or mental illness worse.

Impact on Mental and Financial Health

The link between money and mental health is undeniable. Financial stress can make it harder to make decisions, lead to spending money impulsively, and cause you to avoid financial responsibilities, causing you to fall further into financial hardship.

On the other hand, individuals with existing mental health issues may find it challenging to manage their finances effectively, leading to worse financial problems down the road.

Financial stability and feeling like you have enough money is super important to your overall well-being. It provides a sense of security and control, which can positively impact your mental health. 

However, the absence of financial problems can make you feel hopelessness and helplessness, turning into a real mental health problem.

Tips For Managing Financial Stress and Mental Health Problems

Managing financial stress requires a thorough approach that deals with the practical and emotional aspects of financial difficulties. Here are some strategies to help ease financial stress and promote mental and financial health:

• Look at Your Financial Situation: Get a clear understanding of your finances. Review your income, expenses, debts, and savings. Identifying any big financial issues will help you plan and take action.
• Set a Budget: Develop a realistic monthly budget that prioritizes essential expenses while allowing for savings and debt repayment. A budget provides a roadmap for how you should spend money. Take a look at our articles on setting a budget for the first time and using the 50/30/20 budget rule.
• Seek Financial Support: Experts can help ease your money worries. Financial advisors, credit counselors, and community organizations offer different types of assistance based on your financial difficulties. Kikoff may be able to help too. Whatever your long term goals are, Kikoff provides fair, effective, and simple tools that empower you to meet your financial goals.

• Build an Emergency Fund: Save money regularly to build an emergency fund that can cover unexpected expenses. Having a financial cushion can reduce anxiety and financial worries.
• Practice Self-Care: Take care of your mental and physical health as much as you can through exercising regularly, sleeping enough, and eating a balanced diet. Setting yourself up for success can have a positive impact on stress levels.
• Explore Mental Health Resources: If money stress is impacting your mental health, consider seeking counseling services or therapy. Talking to a professional can help ease money and mental health worries.

Conclusion

Financial stress and worries about money affect millions of people all around the world.

Realizing the link between financial stress and mental health is the first step in effectively managing both things.

Break things down into bit-sized pieces and be practical. Improve your financial literacy, develop healthy money habits, and prioritize things that improve your mental health.

Seeking support is hard, but really valuable. Whether it’s reaching out to financial advisors, seeking counseling services, or simply talking to people you trust, seek out resources that can help you feel stressed less often.

Take a look and decide if Kikoff is one of those resources. Whatever your long term goals are, Kikoff provides fair, effective, and simple tools that empower you to meet your financial goals.

Small steps go a long way. If you’re being proactive about managing your financial stress and maintaining solid mental and physical health, you’re setting yourself up for long-term stability.