The wealth and mental health connection

Published on Apr 17, 2023

The wealth and mental health connection

Study after study has shown that our relationship to wealth impacts not only our current money situation and future financial plans, but also our overall mental wellbeing. For example, most studies from the past two decades find a positive correlation between financial stress and symptoms of anxiety and depression. Another study found that 86% of people with mental health problems and debt say that their debt makes their mental health issues worse.

Investing in your health and overall wellbeing — in every aspect — should always be a priority. When it comes to both our mental and financial health, taking even one small step can make a big impact. Luckily, there are plenty of things that we can do to help decrease our financial stress and, hopefully, improve our mental health at the same time. Here are a few:

Practice some self-care

According to the American Psychological Association’s latest Stress in America survey, 72 percent of Americans reported feeling stressed about money at least some time in the prior month. Fortunately, engaging in self-care routines — including things like exercising outdoors (where you’ll enjoy the two-for-one benefits of both being outside and drumming up some exercise-induced endorphins) or enjoying an at-home spa ritual  — have been clinically proven to reduce or eliminate anxiety and stress. Meanwhile, another national survey found that 64% of Americans also believe self-care boosts self-confidence, 67% report that it increases productivity and 71% say it makes them happier.

Mindfulness—or the practice of purposefully bringing your attention to a present-moment experience—is another version of self-care that just might help when it comes to our finances. Although mindfulness studies are still in the early stages, inaugural work in this area has shown that mindfulness helps people unhook from unhealthy habits and addictions. This could be especially helpful when it comes to ridding ourselves of unwelcome spending and saving habits.

Get organized

Decluttering your surroundings can be helpful on several levels. To start, studies have found that organized environments can have a direct positive effect on mental health. Getting organized in your financial life — figuring out a way to track your income and expenses, making payments automatic and shredding any old credit cards and documents with financial information on them, for example — is also a good way to get motivated, avoid fraud and stay on track with your money goals.

Educate yourself

Finances can feel scary if you haven’t explored the topic before. Like most things, though, the more you learn about money, the less scary it seems. Working on your financial wellness provides you with a sense of financial security that you can not only take care of any surprises that might occur in the present (like an unexpected medical bill, or the leak in your ceiling), but that you’re also keeping the future in mind.

If big topics (retirement, deciding if you can afford to start a family, saving for college) feel overwhelming, start with the basics: Creating a budget. By gathering all your finances in one place, you’ll have a better idea how much you can spend monthly on “fun” things (like entertainment and clothing), while also working to accomplish your long-term financial goals (like putting money in an emergency account, saving for a down payment on your first home or opening a retirement account).

If that’s not enough to get you started, consider this: 85% of people who budget say that doing so got them out of debt, or has helped keep them out of it. This piece walks you through seven easy steps for creating a family budget, while this one discusses how to build an environmentally conscious budget.

Seek outside support

Anxiety and stress from financial worries feels cyclical for many people — like there is no way out. That’s not the case. If what you’re currently doing to deal with your mental health or wealth worries isn’t working, get help. (For example, if you spend money when you’re feeling low, you probably won’t feel better. New research shows that people derive less ‘purchase happiness’ from buying new things when they feel financial stress.)

As an alternative, consider leaning on a trusted friend, family member or professional to help. The American Psychological Association and American Psychiatric Association are good resources for mental health professionals, or consider contacting a Certified Financial Planner (CFP ®) or checking out resources from the Consumer Financial Protection Bureau for financial help.

Wealth, mental health and our financial situations are more intertwined than we tend to think. By taking care of one, the other may also benefit. Using the above steps is a good start. For more financial help, check out our Managing Your Money Center for advice on specific topics. 

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