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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
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Money problems 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. 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. 

Events like the Covid-19 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, particularly during Christmas. But there are several reasons behind financial anxiety. Figuring out what is causing it can make it easier to get help. 

common myths about money worries and mental health

people with mental health issues are bad with money

It is not accurate to assume that individuals with mental health challenges are irresponsible with finances. Mental health can affect decision-making, but it does not make someone bad with money. 

talking about money worsens mental health

Some believe that discussing financial issues can exacerbate mental health problems. However, open communication about money struggles can often 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 (e.g. healthcare, home repairs) but this doesn’t equate to financial irresponsibility. It is crucial to address poverty with empathy, recognising that many individuals are navigating challenging circumstances. 

the connection between money worries and mental health 

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

Stress and anxiety 

One of the most common manifestations are 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 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. 

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 judgement, fostering a sense of isolation from their social circles. 

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. 

Substance use or excessive spending 

Substance use 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. 

Borderline personality disorder (BPD) and schizophrenia  

Borderline personality disorder (BPD) and schizophrenia can also make handling money more challenging. The emotional difficulties associated with these conditions can lead to impulsive spending and other financial issues. Some triggers could include losing your job, dealing with debt or overspending.  

I am struggling with money.
What are my options? 

There are multiple ways you can deal with money problems, starting from budgeting to applying for benefits and dealing with debt. 

Plan your finances

Getting a clear picture of your income and spending habits is a powerful step towards improving your overall wellbeing. A budget is a plan for balancing money coming in and going out, which can make you feel more in control and help manage money worries.  

While setting up a budget might feel daunting, it can help you to: 

  • Feel more confident managing your money 
  • Spot where your income is coming from 
  • Understand your spending patterns 
  • Tackle debt more effectively 
  • Put money aside for unexpected expenses.  

Tools like the MoneyHelper Budget Planner can support you to get started in a simple, structured way. 

Benefits 

It is advisable to explore potential eligibility for additional benefits. You can read more about available benefits on the Scotland 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.

Debt 

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. 

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. 

support

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.

download

Resources to help you

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

Our Advice and Support Service is open Monday to Friday, 10am to 4pm (closed for lunch between 12.30pm and 1.30pm), where advisers can signpost you to local support that most fits your needs, including our Change Mental Health services. We offer initial advice on money worries and help to deal with emergencies.  

Contact 0808 8010 515, email us at advice@changemh.org or fill out the enquiry form on the Advice and Support Service page.  

Other resources: 

MoneyHelper – offers practical guidance on a range of financial matters, including debt, pensions, savings and budgeting. They also have a community group and offer free advice on debt and pensions.  

National Debtline – You can call 0808 808 4000 9am-8pm Monday to Friday to get free advice and support from debt experts.Â