Money is an odd concept in the psychological world. Money is something that human beings created and gave value to, in order to allow for the exchange of goods and services. Unfortunately, it’s also something that causes us a significant amount of stress. We’re not born into this world worrying about debt and cashflow, but as we grow up, we become increasingly aware of the impact money has on our lives. The demand to put food on the table in any economy can be overwhelming. Increasingly, psychologists have discovered that money can lead to a lot of mental health issues, ranging from stress and anxiety disorders to severe depression. Money can even be at the heart of various compulsive disorders, particularly when people don’t learn how to manage their expenses and cash correctly.
The mental health and money cycle
The complex relationship between humanity and cash can make it difficult to know why certain people react differently to money. There are those out there who feel like they need to spend every penny they earn as soon as they earn it. There are also consumers who prefer to save as much money as possible, to the point where they hoard everything they have.
Provided that people don’t create mental health (or debt) issues with their financial behaviours, they’re often able to choose how they manage their money themselves. Unfortunately, a lack of financial education in the world means that many people develop negative cycles with money that can influence their quality of life, and even their relationships. It is important to simultaneously build better mental health while you are also building financial habits.
The mental health and money cycle can start with poor mental health. For instance, someone suffering from depression might purchase more to make themselves feel better. This leads to debt, which makes the person feel worse, and encourages them to take out loans to keep feeling better. Alternatively, your issues might start the other way around, with debt, followed by depression and stress. Either way, the key to successfully managing cash in a way that’s good for your mental and emotional health, is finding a way to break negative cycles.
Breaking negative financial cycles
Like many issues, breaking a negative cycle with money starts with recognizing that something needs to change. If you’re stressed that you never have enough money, you can sit down with your budget and start making small changes that add up to a big difference. Something simple, like refinancing student loans with a personal lender, can take serious pressure off your shoulders, and give you more money each month to put towards necessary expenses.
Even just following a budget on a monthly basis can get you into some good financial habits that you can use to remain safe throughout the years. However, a lot of people don’t know how to make the first step with their financial recovery. That’s why it’s so important to seek help when you need it. Speak to a professional, discuss your options with your family, or reach out to a friend for support if you feel you’re suffering from an issue connected to money and psychology.
Tommy Williamson did his degree in psychology at the University of Edinburgh. He has an ongoing interest in mental health and well-being.