💸  Meet YML Plus: The AI-powered financial sidekick for employees. See the overview | Read the blog
Blog Post

Financial stress and mental health statistics: How connected is our money stress and our mental health really?

Money is no doubt, stressful. Not only is it stressful, and majority of people deal with financial stress, there is actual data linking financial stress to our mental health. Knowing how to deal with financial problems is essential not just for one's economic stability but also their mental health, as the alarming intersection between debt and mental health is becoming more evident each passing day. With financial stress symptoms manifesting in various forms – from anxiety to depression, insomnia to relationship strain – it's crucial to recognize how these challenges impact our daily lives and overall health.

A few statistics from a study done by the Money and Mental Health Policy Institute, shows the strong link between money and mental health: 

  • 46% of people with debt also have a mental health diagnosis
  • 86% of people with mental health issues and debt say their debt makes their mental health issues worse 
  • People with depression and debt are 4.2 more likely to still have debt at 18-months compared to their counterparts without debt

But how does financial stress affect your health exactly? The effects of financial stress can be physiological as well as emotional, encompassing everything from increased blood pressure and heart disease risk to feelings of hopelessness or even suicidal ideation. Additionally, chronic stress caused by financial insecurity has been linked to weakened immune systems, leading to a higher susceptibility to illness or infections. Understanding what causes financial stress is key in combating these distressing consequences; common culprits include job loss or reduced income, unexpected expenses such as medical bills or car repairs, escalating debt levels (e.g., student loans), poor financial management skills, or simply the societal pressure to maintain a certain standard of living.

The American Psychological Association found that 72% of adult report feeling stressed about money some of the time, with 22% reporting extreme stress related to financial concerns. This stress has also been linked to an increase in anxiety and depression. There is an urgent need for improved resources and education on managing personal finances effectively. 

So why does money cause stress in such large numbers? One explanation lies in the fact that our worth is often intrinsically tied to our bank accounts – we perceive ourselves as successful if we're financially stable (or better yet, wealthy), and thus feel inadequate when faced with monetary struggles. This mindset only exacerbates the psychological burden associated with monetary difficulties.

Money-related anxieties can significantly impact our mental health and quality of life. When finances feel out of control or overwhelming, it’s normal to experience heightened stress, anxiety, depression, and even physical symptoms like headaches, stomach troubles, and sleep disturbances. To mitigate the harsh toll financial concerns can take, it’s important to be proactive and intentional in implementing coping strategies. 

Creating a detailed budget is a foundational step to gain clarity and control over expenses and income. Track all sources of money coming in, along with fixed and variable costs. Look for areas where spending could be reduced without major lifestyle impacts. Setting up automatic transfers to savings is also wise for building an emergency fund. If debt repayment is a priority, consolidate loans for simplified payment plans at lower interest rates. 

Seeking outside support can provide guidance when financial challenges feel daunting. Certified financial planners and non-profit credit counseling agencies offer personalized advice and accountability. Debt management programs may negotiate alternate repayment plans or interest rate reductions with creditors.

Maintaining perspective is also key. Focus on accomplishing small financial goals each month, rather than getting overwhelmed by the big picture. Be patient with the process, as financial recovery takes time. Challenge unhelpful thoughts like catastrophizing the future or tying self-worth to net worth. 

Finally, prioritizing self-care and mental health bolsters resilience when financial problems arise. Physical activity, nutritious eating, sufficient sleep, and social connection replenish mental reserves needed to cope with stress. Mindfulness, meditation, journaling, or spiritual practices can also soothe emotions. Investing in overall wellbeing aids psychological stability during turbulent economic times.

Ultimately, the alarming financial stress and mental health statistics underscore the fundamental necessity for individuals and communities alike to prioritize not only fiscal responsibility but also emotional well-being. By taking proactive steps in managing our money and addressing the root causes of financial strain, we can work towards safeguarding our mental health in today's economically challenging world.