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5 Min Read

How can financial stresses affect our mental health?

27 Oct 2022
By
ieso

Did you know, a new Ipsos poll for the World Economic Forum in May revealed that as many as 1 in 4 people across 11 developed countries are struggling financially? We know the changing inflation rates have affected global and national economies, and McKinsey illustrates this here.

Some of us may find it stressful balancing our finances – especially so over the winter months, as we face rising energy bills – and if we start to feel like money worries are getting on top of us, this could have a wider impact on our mental wellbeing, leading to anxiety and low mood. In a survey carried out by Mind, 73% of people said that when their mental health is poor, they struggle more to manage their money, while 74% said that difficulty managing money then went on to affect their mental health.

The strain of experiencing financial difficulties can sometimes lead to avoidance behaviours. If we feel hopeless, we might struggle to summon up the motivation to deal with problems that seem unsolvable. We may start to avoid opening our mail or checking our bank balance, or skip taking necessary actions such as paying bills or making decisions. In the short-term this may bring relief – but the problem will just continue to loom, increasing the pressure and make us feel even more overwhelmed.

Others may do the opposite – perhaps taking on extra work to increase their income, or stop engaging in activities they enjoy to make sure there’s enough money available to cover living costs. Again, while this might bring short-term relief, the lack of rewarding or fulfilling activities in our life, combined with an increased workload, could have a negative impact on our mood.

There are steps we can take to manage how current financial circumstances might affect our feelings and our mental health. In this blog, we’ll look at two strategies: getting the ‘what ifs?’ out of our heads, and problem solving where we can.

Refocus on the present.

We probably all have hypothetical financial worries in our minds at the moment amidst the cost-of-living crisis. These are based on what might happen in the future – such as ‘what if the boiler breaks and I have no money to get it fixed?’. These worries can cause a lot of anxiety – and we can spend a lot of time trying to find a solution, and ruminating on the possible outcomes.

First, identify whether your worry is a current problem, which requires you to take action now, or a hypothetical ‘what if…?’ that may happen in future. Some people find that writing their worries down and setting aside a small amount of time each day to review them stops the thought from taking over.

We can’t problem-solve hypothetical worries, so we want to dismiss these and turn our minds back to the present. If you find yourself returning to those thoughts, try to focus your attention on the task at hand, and fully participate in it. For example, if you go for a walk, take notice of the sounds of the birds and the colour of the leaves on the trees.

Another technique to use if you continue to concentrate on hypothetical worries is the 54321 strategy. Identify 5 things you can see, 4 things you can hear, 3 things you can feel, 2 things you can smell and 1 thing you can taste. This brings your attention back into the present moment by focusing on the sensory information around you.  

Deal with any current problems.

If we take action to solve the problems and worries that do need tackling, we’ll feel more in control and things are less likely to spiral.

Step 1: Identify the problem. For example: The gas bill has arrived, and I don’t have enough money in the bank to pay it.

Step 2: Identify your goal. To avoid incurring any more costs or warnings from the gas company.

Step 3: Identify all possible solutions, no matter how unreasonable some may seem.  

Solution 1 – Use my credit card to pay the bill.

Solution 2 – Call the gas company and ask for a manageable payment schedule.

Solution 3 – Ignore it.

Solution 4 – Pay the bill in full now.

Solution 5 – Borrow money from a friend.

Step 4: Weigh up the advantages and disadvantages of each solution.

Step 5: Pick a solution and put it into action. Solution 2 – Call the gas company tomorrow morning.

Step 6: Review how it went – did you achieve your goal? Yes – the gas company has agreed to monthly repayments and gave me some tips that will help me keep future costs down.

Tap into some helpful resources.

The Mind website has a section that looks at the links between mental health and money, and the feelings and behaviours associated with financial struggles.

Mental Health & Money Advice provides guidance on maintaining our wellbeing during the cost-of-living crisis – including a downloadable Toolkit, and suggestions for affordable or free ways to de-stress.

Talk about it.

There’s still a certain amount of stigma around discussing money troubles with other people – but talking your worries through could help you to feel supported and less alone. There’s absolutely no reason to feel ashamed or embarrassed; what’s happening right now isn’t our fault, and there will be a lot of people in the same boat.

If you feel that money worries are leading towards further signs of stress, anxiety or depression, please seek professional support. Depending on where you live in the UK, you may be able to access text-based CBT with ieso through your GP. Find out if you are eligible here. Online cognitive behavioural therapy (CBT) can be very effective for managing those symptoms.  

If you live in the US, you can access further support by contacting your Primary Care Physician, or learn about alternate options here. You may also find this online survey from the Consumer Financial Protection Bureau helpful in suggesting steps you can take to improve your current financial well-being.

Follow us on LinkedIn and Twitter to join us on our journey.

ieso
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