How Finances Affect Your Mental Health

The complex relationship we have with money and the stress of being financially strained can lead to a vicious cycle that can make us  feel completely out of control. This is a universal experience, felt strongest by Black LGBTQ+ womxn and non-binary people who begin their financial journies on the back foot due to layered disparities in pay gaps and historical mistreatment by financial institutions.

Just as money impacts our behaviour, our mental health can impact how we handle our finances, creating the vicious cycle we mentioned earlier. While the cause may look different for all of us, some mental health conditions cause a spike in impulsive behaviour and can influence how we spend our money and our ability to plan for financial obligations rationally, it can also create spending shame cycles that seem impossible to break out of.

Financial wellbeing affects everyone, as shown in the Cost of Living Crisis: Financial Stress and Employee Wellbeing report, in which 37% of employees stated that financial pressure is the top cause of stress outside of work. The same report shows that Womxn-identifying employees are 33% more likely to experience stress than their male-identifying colleagues. Research conducted by Money and Mental Health Policy Institute shows that of the 5,500 people surveyed across the UK, 86% stated that their financial situation has worsened their mental health and that those experiencing mental health problems were three and half times more likely to be in debt than those without. 

To help get you started on your journey to better mental health relating to your finances, we’ve put together our tips to reduce the impact of financial strain:

• Pinpoint your financial stressors

Identifying your financial stressors is a crucial first step to managing your mental health better. While it may not seem important, understanding what about finances most affects your mental health can help you manage stressful moments. Does receiving a bill in the post spike your anxiety, or does the end-of-the-month crunch put you in a spin? Understanding where the stress comes from enables you to plan to manage it better. You could contact your utility providers and request that you receive electronic bills on prearranged dates to avoid a spike when one lands on your doorstep unannounced or put aside a set amount to ensure you aren't caught in the same situation at the end of every month.

• Create (and stick to) a budget

Setting goals is only possible if you know where you're starting from. Beginning your budget process with an honest audit of your finances will make the budgeting process a less stressful experience. Many budgeting approaches are available for free online, from simple Excel spreadsheet templates to mobile apps; there's an option for every need and comfort level. Spend time researching the different methods and finding one that makes sense for you before building your budget. It's a good idea to have an end goal for every month, whether contributing to a savings pocket or ensuring you have a set amount left to cover the end-of-month crunch, a clear goal helps keep you on track.

• Monitor your spending

This is a big one - and one that we all struggle with. It's important to know where your money is going. Much like sticking to your budget, having a clear idea of where you spend your money will help you cut costs where needed. Are you spending more than you'd like on delivery, or are your entertainment costs much higher than you thought? Understanding any anomalies will help you identify places to cut costs or dedicate more funds. 

• Make one decision at a time

Money can be overwhelming. When you're faced with making multiple decisions at once, you'll likely have a knee-jerk reaction and make decisions from a place of reactivity, forgetting your long-term goal of financial stability. As difficult as it can seem in the moment, take a moment to refocus and make one financial decision at a time. Being honest about your financial situation by listing your expenses, creating a budget and monitoring your spending will help you prevent becoming overwhelmed and keep you focused on your needs over your wants.

• Recognise the emotions you relate to money

Much like identifying your financial stressors, knowing the emotions you relate to money can help you understand how you relate to money in a healthy and unhealthy way. Journalling is a great way to get in touch with your emotional side, but if this practice isn’t for you, simply making a note of what emotions come up when faced with a financial decision or stressor can help you to gain a deeper understanding of how you relate to your financial situation.

• Develop a mental fitness plan

A mental fitness plan will look different for everyone and depends on your mental fitness needs. Psychologists have long recommended a combination of therapeutic practices and physical activity. This could be roller skating, yoga, twerking classes or a daily walk, whichever makes you feel most comfortable and happy.
Developing mental fitness in relation to finances can be difficult; that's why My Moon Landing offers Financial Fundamentals training courses in which you'll learn the fundamentals of managing your finances, building sustainable wealth and overcoming debt pressure. Be sure to sign up to join the programme here.

• Ask for help

Find a mental health professional who can help with your needs and within your budget. We know that mental health may sit at the bottom of your budget, but investing in your mental health is as important as your physical health. With the growth in digital access to mental health professionals, it is much easier to access someone who can support you within your budget. A Financial Advisor is another great resource for financial advice and to help you work through any stress around your finances. At My Moon Landing, we understand that finding a financial advisor as a queer or non-binary person can be difficult; if you need advice on how to get started, we've shared our guidance here.

• Be kind to yourself and those around you

When we're in a space of anxiety, it can be easy to slip into patterns of negative self-talk, especially expectations that make judgements of our progress and deem it too slow. In times like these, it's most important to be kind and gentle with ourselves, celebrate the small victories and encourage ourselves to keep going. This is true not only for ourselves but for those around us.

While financial stress and mental health can make you feel isolated and alone, it’s important to remember that we all struggle and that you are not alone. You can take control of your finances with the support that My Moon Landing can offer. If you’re interested in learning how to take control of your financial future and work through the stress of managing your finances, sign up for the My Moon Landing newsletter for event updates and join our community. Let's tackle this together!