How Money Issues Can Affect Your Mental Health

Mental health doesn't exist in a vacuum. Money concerns can often end up extracting a toll on our psychological well-being over time. Here is a look at the variety of ways that money issues can impact mental health and how it's possible to minimize the negative impact and risks by taking proactive steps.

People who are in debt are three times more likely to develop a mental health problem, according to Psychology Today. A 2010 review of 115 international studies found poverty was regularly associated with mental health issues like anxiety and depression, and that people living in poverty developed more severe mental illnesses which lasted longer and had worse outcomes.

According to the Money and Mental Health Policy Institute, 86 percent of respondents with mental illness reported their financial situation had made their psychological problems worse. Another study reviewing the health records of more than 34,000 patients who had been hospitalized for mental illness determined that poverty and related economic stressors were more likely to precede mental health issues, except in patients with schizophrenia.

Why do money troubles lead to mental health problems? Stress may be a factor. "People do all kinds of things to cope with stress," says counselor George T. Lynn, "but money is one of those things that strips a lot of those coping methods away." People living with severe debt may feel a sense of impending doom, and some studies' have found that people in poverty have higher levels the stress hormone cortisol.

Research has shown people living in poverty make worse financial decisions because it is harder to focus on anything but the short-term. "Planning for the future just stops because the person no longer feels expansive," counselor George T. Lynn says. "They don't feel they have the room."

Our fight-or-flight response may be helpful in the wild, but it can become debilitating when triggered by a situation we can't fight or outrun, like unemployment. Feelings of helplessness and fatalism have been linked to depression and anxiety.

People can experience feelings of shame and low self-esteem for believing their dire financial situation reflects poorly on them. Often they feel "less than" their more successful peers or even their former selves.

"When people are stressed," counselor George T. Lynn says, "they tend to have their public face, and then what I'd call their 'backup style,' which is usually anger or fear." When people are chronically stressed and worrying about money troubles, they have less patience for dealing with other matters. This can manifest as depression and avoidance or irritability.

Financial troubles have a way of bleeding over to affect other aspects of our lives, including personal relationships. Severe debt or unemployment can spark arguments or breed resentment. "If there are any deep-seated structural issues in a relationship, enough money pressure over a long enough time will expose and start cracking down on those," says George T. Lynn.

A lack of money can also limit one's ability to socialize. "People self-isolate when they're ashamed," counselor George T. Lynn explains. "They think, 'that person wouldn't want anything to do with me, because I'm a failure.'" Social isolation and loneliness can have significant negative impacts on mental and physical wellbeing.

Money trouble isn't just taxing to our mental health; it can also make us feel worse physically. A 2016 review of six separate studies found that economic insecurity produced higher rates of physical pain and lower pain tolerance.

Migraines are one of the physical symptoms that have been directly linked to financial stress. A study by the European College of Neuropsychopharmacology found that for predisposed participants, the odds of experiencing migraines jumped by 20 percent if suffering financial hardship.

Nearly two-thirds of Americans report losing sleep because they're worrying about finances, often relating to healthcare costs. Financial hardship is also one of the most common stressors contributing to insomnia, which can make sufferers more vulnerable to conditions like anxiety.

Money woes may be responsible for an increased likelihood of suicide. People who complete suicide are eight times more likely to be in debt than not, and about 16 percent of suicides occur in response to a financial problem.

For people with mental health issues, even finding treatment can become a source of financial hardship adding to their distress. "If mental health systems aren't well-funded, it can destroy a person's life to have to spend, say, $600 to $1000 for a monthly medication injection," counselor George T. Lynn explains. "When people can't afford that, they stop taking their meds."

Many mental illnesses make maintaining employment more difficult. While counselor George T. Lynn notes that sufferers of bipolar disorder can have more impulsive buying habits during manic phases, compulsive buying disorder, often co-occurs with other mood or anxiety disorders. "Any mental illness that impacts brain executive function — that is, the ability to plan and prioritize — is going to have an impact on money," Lynn says. "And when people are concerned about that, anxiety's going to go way up as well."

Rather than ruminate on past mistakes, pinpoint wasteful spending habits in your household and develop strategies to minimize them. This may require cutting out certain indulgences, but it'll be worth it to regain some measure of control over your finances.

One of the most practical ways to gain control over finances is by creating a budget to track household income and expenses on a weekly basis. As well as better visualizing problematic spending habits, this approach can enable people start planning and preparing for the future again.

Citing financial adviser Suze Orman's advice, counselor George T. Lynn recommends building up a "rainy-day fund" to cover eight months of expenses in case of financial emergencies. He also encourages members of the corporate workforce to be prepared for workplace shake-ups. "Things get tougher as you're getting older and your skillset is getting softer," he says.

Having supportive people around you is an important buffer for mental health in general. Look for friends or community members you can confide in to talk through your financial troubles, too. Also keep an eye out for institutional resources like unemployment insurance or utility rebates, which many government organizations and businesses offer specifically for people with low income.

According to counselor George T. Lynn, the best way to minimize feelings of shame associated with financial hardship is just to stop pinning one's sense of identity and self-worth to wealth. "In our culture of measurements and accomplishments, it can be hard to push back and say, 'I'm good and grateful for just the way I am,'" he explains. He advises families going through a financial rough spot to pull together, put aside digital devices and social media platforms that may foster feelings of inadequacy, and spend more time together.

Everyone has different concerns when it comes to money, so expressing and confronting those feelings sooner rather than later when can help you and your partner know what to expect and reach a consensus on how to respond to economic hardships. "Don't fight about it," urges counselor George T. Lynn, "problem-solve about it."