The link between money and mental health

Has money got you worrying? Has poor mental wellbeing got you neglecting your finances? The link between money and mental health is a complicated one. But, for most of us, it does exist.

More recently, the COVID-19 pandemic has intensified money worries for many people. It’s unsurprising that during such uncertain times making financial decisions can feel overwhelming. But for both your mental wellbeing and your finances, it’s important to take steps to understand the link and remain in control.

For example, you should keep up to date with what government support is available. The treasury has a dedicated page with information on things like income support payments and early release of superannuation. There are key financial assistance measurements to help Australians impacted by the COVID-19 virus.

Working out your relationship between money and wellbeing

You aren’t alone if you’re worrying about your financial wellbeing. CoreData reports that 81% of Australians are fearful about the potential impact of the pandemic on their personal finances and the broader economy. It’s an uncertain and scary time.

In general, poor mental health can make managing – or even earning – money more difficult than usual. And stressing or worrying about money can make us feel worse. These are both realities which have intensified because of COVID-19. It can just feel like a vicious cycle.

To start off, UK mental health charity Mind suggests working out your habits and thought patterns around money, reminding us that there are some common ways money and mental health can affect each other.

When do you spend or save money, and why? For example, spending may give you a brief high, so you might overspend to feel better.
What aspects of money management make you feel worse? For example, talking to your bank or opening envelopes might feel very anxious and uncomfortable.

You could start a diary recording your spending or saving, and your mood at the time. How were you feeling before? How did you feel after spending or saving? This could help you identify triggers or patterns. When you understand this a bit more, it will put you in control of making any appropriate changes.

If you discover you need to take action soon, you can contact your service providers to negotiate lower fees and extended payment terms. You can also ask your lender to pause your mortgage repayments, something which has become more commonplace during the pandemic, or speak to your leasing agent about rent relief.

Talking about money and mental health

Making any changes often involves talking to people. But as one guide explains, almost a third of Australians never talk about money – with anyone. Patrycja Slawuta, who conducted the study, explained that “money is more than just a number for most people. Our relationship with money is emotional, complex and personal and is influenced by many things.”

But if you’re serious about a secure financial future, it’s important to open up the conversation. Just remember that many emotions may be involved in a conversation about money, so always avoid judgements. As people talk and discover more about the link between money and mental health, these conversations will become easier. But you have to be brave to make the first step, to talk about finances, wellbeing and what can be done to make improvements.