It’s often difficult to talk about, but personal finances can have a significant impact on a person’s mental health and emotional well-being.
In fact, financial hardship has been linked to depression and suicide, according to Channing Marinari, LMHC, of Behavioral Health of the Palm Beaches. It can cause anxiety and stress, and people may begin to feel hopeless when they are faced with financial issues. But why is this, and what can we do to better address the problem?
“The burden of owing credit card debt, tax debt, student loans, and car loans can cause a sense of impending doom and confusion, especially for someone whose emotional regulation is tied to money,” Marinari explains.
Large amounts of debt and financial hardships (such as job loss, an unexpected medical expense, or a major car repair), can seem overwhelming, and when people don’t know where to turn it can cause a person to believe the problem is insurmountable.
“This can create a snowball effect,” says Marinari, “Worsening a person’s financial decisions even further.”
There are certain personality types that are more prone to experiencing a deterioration in mental health as a result of financial woes. These are the people who put their self-worth in finances. Those who experience elation and pride in expensive purchases, for example, conversely experience despair when their financial situations do not match their expectations.
“A person with existing mental health issues may also be predisposed to this type of distress,” states Marinari, “They may be more prone to making negative or impulsive financial decisions.”
Heavy periods of shopping and spending are often seen in those who struggle with bipolar disorder, depression, anxiety, symptoms of PTSD and strenuous life events in an attempt to cope with the negative feelings. Shopping addiction is an actual compulsive disorder where individuals spend uncontrollably, contributing to credit card debt. Gambling addiction is another serious issue that can lead to financial ruin, and there are treatment programs that are dedicated to specifically treat the issue.
“It’s the emotional and psychological needs that drive this behavior, versus a real practical need to spend,” Channing says.
In order to address these issues, underlying mental health conditions must be dealt with first and foremost. To assume that one will feel better only when their financial situation improves is to perpetuate the cycle, continuing to focus on monetary gains as a means of validation and happiness. If a person is spending because they are depressed and accumulating debt, the depression must be addressed before the financial aspects. It often takes months, or even years, of attentiveness and hard work to dig out of debt, and this is okay. Taking small steps in the right direction is important, but so is self-care and taking care of our mental health.
Professional help is available; not only can a person speak with a mental health counselor to address things like depression or PTSD, but there are financial counselors out there as well. Financial counselors can be extremely beneficial, sitting down with people who are struggling and making plans to address their issues. When things are broken down into small steps, with attainable goals, it can help people see a way out, in turn lessening the feelings of hopelessness that often come with financial stress.
“All of these things can be addressed with the right guidance and support,” assures Marinari, “And there are coping mechanisms people can utilize during difficult times.”
These include things like meditation, exercise, or spending time in nature. Taking time to yourself to relax and focus on the positive can help alleviate the high levels of stress that people feel. Most importantly, it’s crucial to avoid buying anything impulsively when a person feels they are struggling.