Finances & Mental Health
This week’s blog post, addressing how finances can affect your mental health, has been contributed by Rebecca Robertson from Evolution Financial Planning. Rebecca has over 20 years experience within the financial sector and has been featured in Forbes Magazines and BBC Radio as well as being a Tedx Speaker! Among other awards, Rebecca has won Financial Adviser of the Year at the Women in Finance Awards. Since founding Evolution Financial Planning Ltd, Rebecca and her team have supported thousands of women and helped them to take control of their money and gain clarity on their finances.
The Link between Mental Health and Finances
According to Mind, your finances and mental health can become interwoven. Being stressed and worried about money can negatively impact your mental health. Alternatively, having poor mental health can mean it is more difficult to manage your finances, so this can become a vicious cycle. Lack of control over your finances can therefore be both; a factor which contributes towards poor mental health, and/ or the result of poor mental health.
Your finances and mental health can affect each other in a range of ways, including:
Low mood can result in a lack of motivation to manage and take control of your finances
Spending can give you a high, so overspending could be a coping mechanism used when you are feeling low
Being in debt or living off benefits can cause you to feel stressed
Stress surrounding money can result in a lack of sleep
Lack of money can affect your ability to socialise with friends and attend social events, which could leave you feeling isolated or lonely
Mental Health and Being in Control of your Finances
When you experience difficulties or emotional turbulence, this can result in feeling as though you are not in control. According to the Counselling Directory “Planning activities ahead is one of the most helpful strategies to tackle low mood”. You can feel more in control when you plan and can to some extent predict what the future looks like.
This principle of planning helping to address low mood and poor mental health, could also be applied to your finances, if lack of control over your finances is contributing towards your poor mental health. Organising your finances can be one of the most effective ways of regaining a feeling of control over your finances.
Tips for Regaining Control of your Finances
Mind provides the following tips for organising your finances and regaining a feeling of control:
Setting a budget (and sticking to it)
Managing any debts
Setting up direct debits so that your bills are paid on time automatically
Creating spending limits through paying for shopping with cash rather than credit/ debit cards and only taking the amount of cash that you can afford to spend, according to your budget
Filing your important documents together in one place
Finding a bank account that allows you to separate your money into different areas e.g. bills, food shopping, savings etc
Regularly checking your bank balance so that you know where your money is going
In addition to these tips, keeping a diary of your spending, savings and your mood can help you to identify patterns and work out where your money is coming from and going. Gaining this clarity on your incomings and outgoings and identifying any patterns between your spending habits and your mood can help you to feel more in control.
Sharing your worries and seeking advice and support can also help you to navigate both your finances and your mental health. Whether you choose to confide in a trusted friend or family member, a Counsellor or Health Professional, a Financial Adviser or service such as Mind or the Samaritans, sharing your worries can provide you with some relief.
Planning for Financial Confidence and Security
Psychologist Robert Epstein in a survey with 3000 participants found that 25% of our happiness is based upon how well we can manage stress. The survey also found that one of the most effective ways to mitigate stress is planning, therefore preventing stress before it occurs. Additionally, planning tasks, goals and life events rather than just letting them happen can help you to feel in control and mitigate stress.
In relation to the link between your finances and mental health, having a financial plan could help you to learn how to manage and gain control over your finances. Your financial plan can help you to reach your financial goals and save for retirement, as well as life the lifestyle you desire in the present. Having a financial plan can also help you to navigate emergency or unexpected situations financially, if you have accounted for such emergencies within your financial plan. This can mean that during an emergency, you remain in control of your finances and you don’t need to worry about money, instead you can focus your energy wherever it is needed.
If you are searching for consistency and control within your money and finances and are looking to grow your savings and investments with a personalised financial plan, then you could find a Wealth Accelerator Planner beneficial. The planner will help you to break your finances down into six manageable sections which will help you to put together your wealth acceleration plan. As well as looking forward, deciding on your weekly and monthly financial goals, you will also reflect on the previous years finances, so that you can learn lessons from the past that will help you in the future.