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11 Ways Money and Mental Health Go Hand in Hand

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Your mental health and finances may seem like two separate things, but they actually go hand in hand. The state of your mental health can affect how you manage your finances, while financial stress can impact your mental well-being. 

Money and mental health issues are common in the modern world, and unfortunately one can lead to the other. Financial problems can cause a great deal of stress which, in turn, can take a toll on an individual’s mental health. A person struggling with their mental health may struggle to manage their finances effectively, leading to even more stress. It’s a vicious cycle that can be difficult to break, but it’s essential to recognize how these two factors impact each other so that you can take steps towards improving your financial and mental health.

In the modern age, ‘mental health’ is not merely the presence or absence of mental disorders; it holds a broader and more holistic outlook. It encapsulates our emotional, psychological, and social well-being, impacting how we think, feel, and behave. It involves our ability to handle stress, relate to others, and make choices. With the advent of technology and social media, mental health now also incorporates digital well-being, which involves navigating the virtual world in a healthy and balanced manner. Understanding mental health in this way is crucial, as it affects our overall health and quality of life.

Everyone should take proactive steps to protect and manage their mental health. This could encompass a variety of strategies, such as regular exercise, maintaining a balanced diet, ensuring adequate sleep, and practicing mindfulness or meditation. Furthermore, it is paramount to engage in activities that engender joy and fulfilment, maintaining a positive mindset, and fostering healthy relationships. It’s vital to acknowledge that seeking professional help when needed is also an essential part of mental health management. There’s no one-size-fits-all approach to mental health, but being proactive and self-aware can make a significant difference.

Money has emerged as a significant stressor in today’s society due to several factors. Economic instability and the rising cost of living have made financial management a difficult task for many individuals. The pressure to ‘keep up’ with societal expectations of success, often measured in terms of material wealth, further fuels financial anxiety. Lack of financial literacy also plays a role, as individuals may struggle to effectively budget, save, and invest their money, leading to feelings of inadequacy and stress. Therefore, promoting financial literacy and resilience is crucial in mitigating financial stress and its impact on mental health.

Here are 11 ways in which mental health and money are deeply interwoven.

1. Financial stress and anxiety

Debt, bills, and other financial obligations can all cause stress and anxiety that can affect your mental health.

2. Mental illness and overspending

People who are struggling with mental health issues may be more prone to spending money as a way to cope. This can lead to overspending and financial strain

3. Impulsive buying and insecurities

Impulsive buying can be a sign of feeling insecure or unhappy. If you’re struggling with your mental health, you may find that your impulse control is weaker than usual, leading to reckless spending.

4. Fear of investing

If you’re struggling with your mental health, you may also struggle with the confidence to invest your money. Investing in yourself or in physical assets can be a scary step. This fear can leave you financially unprepared for the future.

5. Loss of income and financial instability

Losing a job or experiencing a significant loss of income can take a toll on both your financial and mental health. This situation can cause stress, anxiety, and depression, which can lead to further financial struggles.

6. Financial abuse and mental health

Financial abuse is the manipulation or control of finances by another person. It can lead to feelings of helplessness, low self-worth, and anxiety, all of which can impact your mental health.

7. Poor credit and self-esteem

Poor credit can affect your self-esteem, leading to feelings of shame and guilt. These feelings can increase if you’re struggling with mental health issues such as depression or anxiety.

8. Lack of financial literacy and confidence

A lack of financial literacy and confidence can also make it difficult to manage your money effectively. If you lack the skills and knowledge to manage your finances, it can be challenging to make sound financial decisions.

9. Debt and depression

Debt can be a significant source of stress and lead to feelings of depression. Those coping with depression may struggle to find the motivation to manage their personal finances effectively.

10. Financial planning and anxiety

Planning for the future can be a difficult task for people coping with anxiety. Uncertainty about the future can lead to anxiety, which can make it hard to create a solid financial plan.

11. Money and relationship problems

Disagreements about money can create stress in relationships, leading to problems in mental health. This stress can then spill over into other areas of life.


Money and mental health are deeply intertwined, and it’s essential to recognize this connection to improve both aspects of your well-being. Stress and anxiety caused by financial issues can have a significant impact on mental health, while mental health problems can make it harder to manage finances effectively. However, there are many ways to improve your financial and mental health, such as seeking help, developing healthy financial habits and coping strategies, and building your knowledge and skills around handling money. Take small steps and be compassionate with yourself to achieve these changes. By recognising the connection between your mental health and your finances, you can start to develop habits and practices that produce a positive relationship between the two.

Tim Williamson, a psychology graduate from the University of Hertfordshire, has a keen interest in the fields of mental health, wellness, and lifestyle. 

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