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money worries and mental health

money worries and mental health

financial stress can negatively affect mental wellbeing leading to isolation, guilt and shame, while poor mental health can impact financial stability

Money worries can leave you feeling isolated and burdened by guilt, shame and embarrassment. These emotions can take a toll on your mental health, making it hard to be open about your financial concerns. Nobody wants to feel vulnerable or judged because of their money troubles.

It is important to know that you are not alone. The cost-of-living crisis has left one in five (20%) working Scots dealing with money-related sleep disturbances and worries. 

There is a clear connection between financial difficulties and mental wellbeing. Not being able to keep up with your friends due to low self-esteem and a tight budget can make you feel left out. When you cannot afford the essentials or enjoy some leisure time, it can also make you feel lonely.

Recent events, like the pandemic and cost-of-living crisis, have made money worries even more overwhelming. With inflation at an all-time high, money concerns might be on your mind more than ever. But there are several reasons behind financial anxiety and figuring out what is causing it can make it easier to get help. 

Myths about money and mental health

‘people with mental illness are incompetent with money’

Even though mental health can affect decision-making, it does not automatically make someone bad with money. With the right support, resources and coping strategies, people with mental health conditions can effectively manage their finances and make informed decisions.

‘talking about money worsens mental health’

Some believe that discussing financial issues can exacerbate mental health problems. However, open communication about money struggles can lead to better emotional wellbeing and support. 

being poor is a personal failure

Economic difficulties can result from a range of factors, including personal emergencies (healthcare, home repairs etc.) and they do not inherently signify financial irresponsibility. It is crucial to address poverty with empathy, recognising that many individuals are navigating challenging circumstances. 

‘money guarantees good mental health and happiness’

While financial stability is important for meeting basic needs and reducing stress, research demonstrates that beyond a certain point, increased income does not guarantee happiness or improved mental health.

‘seeking financial help means you’re weak’

Asking for financial help shows responsibility and strength. Seeking guidance is a proactive step towards managing financial wellbeing and ensuring a secure future.

Knowing when to ask for help is a sign of intelligence and self-awareness.

Triggers of money worries

Common factors that can trigger money anxiety include: 

  • Losing your job 
  • Inflation and economic changes 
  • Dealing with debt 
  • Unexpected expenses 
  • Overspending 

How do money worries affect my mental health?

Money worries can manifest in various ways, impacting a person’s thoughts, emotions, behaviours and overall wellbeing. Those could include:


One of the most common manifestations is anxiety and stress, stemming from a persistent concern about not having enough money to cover bills, debt repayments or daily expenses. This constant worry can lead to feeling overwhelmed, especially when faced with the uncertainty of financial circumstances in the future.

Depression and a low mood

Ongoing financial struggles can lead to depression, causing persistent sadness, hopelessness or helplessness. These emotions can, in turn, disrupt sleep patterns, appetite and energy levels, further contributing to despair.

Relationship strain

Financial difficulties can strain relationships, creating conflict and tension. Disagreements over financial decisions and the burdens of financial obligations can escalate, causing increased stress within relationships. 

Social isolation 

People may withdraw from social interactions or avoid events due to concerns about affordability. Financial struggles may lead to feelings of embarrassment or judgment, fostering a sense of isolation from their social circles.

Substance abuse or excessive spending

Substance abuse provides temporary relief and an escape from financial anxieties, but it can lead to addiction and worsen mental and physical health. Excessive spending, on the other hand, offers momentary pleasure and a sense of control but often results in increased debt, hindering financial recovery. 

Sleep disturbances

Financial worries often disrupt sleep patterns, causing insomnia or fragmented sleep due to anxiety about financial problems and future financial stability. Racing thoughts about money worries can prevent a restful night’s sleep, contributing to overall fatigue and mental strain.

What mental health conditions are related to money worries? 

Anxiety can significantly impact your financial wellbeing, often exacerbating money-related concerns. The constant worry and stress associated with anxiety can lead to various financial challenges, including: 

  • Financial neglect: Putting off essential financial tasks, which can lead to monetary troubles, such as late bill payments.
  • Impaired decision-making: Struggling to make sound financial choices such as saving, often resulting in poor decisions.
  • Social withdrawal: Isolating oneself from social interactions and the outside world, which can hinder access to support and opportunities.

Borderline personality disorder (BPD) and schizophrenia can also make handling money more challenging. The emotional difficulties associated with BPD and schizophrenia can lead to impulsive spending and other financial issues. These include: 

  • Impulse buying: Making unplanned purchases without thinking.
  • Coping with substances: Turning to alcohol or drugs for comfort.
  • Accumulating debt: Relying heavily on credit cards or loans.

I am struggling with money.
What are my options?

It is advisable to explore potential eligibility for additional benefits. You can read more on the Scottish Government website. However, here are some benefits that are worth looking into:

Universal Credit

Universal Credit (UC) is financial support designed to assist individuals with their everyday expenses. To apply for Universal Credit, you must meet the following criteria:  

  • Be a UK resident  
  • Be 18 years old or older (with some exceptions for those aged 16 to 17)  
  • Be below the State Pension age  
  • Possess money, savings and investments totalling less than a specified amount (changes per year) 

The amount you will receive from Universal Credit will depend on several factors. You can read more about it here.

Cost-of-Living Payments  

If you are on an eligible low-income benefit, you may be able to claim a cost-of-living payment. The values change per year, so it is important to keep informed on how much you would be eligible for. In general, the cost-of-living payments increase per year based on inflation rates. 

You can check how much you are eligible for here. 

I’m struggling to provide care for someone.
Any tips?

Caring for someone with a mental illness can be tough, affecting you emotionally, physically and financially. Find tips for self-care that benefit both you and your loved ones here. 

I’m dealing with debt.
What do I do?

Dealing with debt can be an overwhelming experience. When you find yourself facing financial obligations, it is crucial to initiate a proactive approach to regain control of your financial wellbeing. The initial steps to take include: 

  • Assess your debt: Begin by evaluating your outstanding debts.
  • Create a budget: Develop a budget to manage your income and expenses effectively.
  • Prioritise repayments: Identify and prioritise your debt repayments.

Should your debt become unmanageable, consider seeking professional assistance. It is important to refrain from accumulating additional debt while working on your financial recovery. Keep in mind that managing debt is a gradual process, requiring patience and self-compassion. Do not hesitate to seek practical or emotional support from friends and family during this journey. 


Advice for frontline staff

In partnership with the Scottish Government, we’ve put together a helpful advice package that includes information, assistance and training resources for frontline staff who support individuals affected by poor mental health and money worries.

Resources to help you

If you or anyone you know is struggling with money, you can consult the following resources from the Mental Health and Money Advice service for support:  

If you would like to speak with one of our specialist advisers at our Advice and Support Service, call our line for free on 0808 8010 515. We are open Monday to Friday, 10 am to 4pm, or email us at 

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