Mental health and finance

Monday 25th July 2022

What's it all about?

This article's designed to help you:

Understand the two-way connection between your finances and your mental health.
Learn simple, practical ways to take better care of your money and yourself.
Make the best use of the resources on offer to help you.

The link between your money situation and your state of mind is a two-way street. If you’re not looking after your mental health, it’s a lot harder to stop your money problems mounting up – and vice versa.

How your mental health affect your finances – and the other way around

It probably sounds obvious, but it’s worth spelling it out: when you’re not looking after your mental health, your ability to earn money can be put under pressure. Stress and depression can throw obstacles in your way that stop you thinking your way around a financial problem. You might find yourself avoiding talking to your bank or even checking your balance. You might start leaving bills unopened or even throwing them out – anything to avoid tackling your financial troubles head-on. Meanwhile, those problems just keep stacking up – and not just in the obvious ways. Yes, unpaid debts will only increase with time, but poor mental health can also have an impact on things you might not immediately think of – like ramping up your insurance premiums, for instance.

Looking at it from the other side, your finances can have a real effect on your mental health, too. In fact, money pressures are some of the main causes of anxiety and other mental health issues. When you’re facing serious financial trouble, opening an envelope, going to a benefits assessment or even just reaching out for help can be incredibly difficult. You might find yourself losing sleep or pulling away from friends and family, both of which will only make it harder to dig your way out of an emotional hole.

Meanwhile, a really tight money situation can make it more difficult to afford the basic necessities it takes to look after yourself. For some people, that might mean they can’t get the therapy or medication they need. For others, it could even leave them struggling to pay for essentials like food, heating and water.

Getting the conversation started

All of this can leave people who are dealing with mental health and money issues isolated and suffering alone. They feel guilty buying the things they can actually afford, and depressed about the things they can’t. At the same time, those feelings can stop them from asking for help, support or even advice.

That last point’s one of the most important. It can be incredibly hard to start conversations about money and mental health, whether you’re suffering yourself or seeing the signs in someone else. The critical thing to understand is that it’s not a failure to ask for help or accept the support that’s offered. Everyone has a right to have their essential needs met – and there are resources out there dedicated to making sure that right is respected.

The longer you leave it before speaking up, the more of a habit it becomes to try and “tough it out”. Just like financial trouble, not every mental health problem comes at you in a big rush. Sometimes, it’s the slow build-up of pressure that weighs you down most over time, particularly if it’s not just yourself you’re looking after.

Changing your relationship with your money

For pretty much anyone, struggles with money in the past can mould the way we think about our finances. Those influences aren’t always on the surface, though, so it’s worth putting some thought into your whole attitude toward your cash. Ask yourself a few simple questions and see if the answers shed any light on your problems. For example, are there any particular times when you seem to spend more than you can really afford? On the other hand, are there specific times when you tend to have more cash on hand to save? If you can spot a pattern, you can use that information to plan ahead and get a firmer grip on your finances.

Now for the tougher questions: how does splashing out actually make you feel? How about saving? When you think about money in general, what kind of emotions does it stir up? Is there anything in particular about handling your finances that feels stressful or depressing? If it’s helpful, try keeping notes about your spending and how you feel about it, both before and after. These can be pretty challenging questions for anyone to answer, but understanding the push and pull between your money and your mental health is a big step toward building better habits for both.

Read our guide: Budgeting for beginners

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Never be afraid to ask for help

There are more resources out there to help with both money and mental problems than most people realise. They don’t all involve waiting on phone helplines or sitting through benefits assessments, either. In fact, some of the most effective resources could already be right on your doorstep.

The first step you take is always the most important, so reaching out to family or close friends can set you on the right path from the start. From there, once you’ve broken the silence and opened up the conversation, you could start looking a little further – like talking to your GP or a support worker. The most important thing to understand is that you’re not alone in this. For instance, there are peer support networks online where people share their experiences and the solutions they’ve found or tried. If your mental health load is becoming too much to carry, there are experts at the Samaritans (call 116 123) who can offer confidential support with no judgement or strings attached.

Read our guide on tax debt & mental health

Find help with debt

When your debts are getting out of control, it’s critical that you take full advantage of the help on offer. For basic, practical and effective guidance, you could do a lot worse than the Citizens Advice Bureau or National Debtline. Another option is Stepchange, a charity dedicated to helping people conquer their debt problems. They help 650,000 people a year, with specialised services for people with mental health issues and a free advocacy system.

For local help, you can find a list of nearby debt services at the Christians Against Poverty website. Just enter your post code to get started. There’s also a fantastic list of helplines and support groups for mental health issues on the NHS website, covering everything from stress and depression through to panic attacks and bipolar disorder. There’s even a specialist charity called The Lighthouse Club for the construction industry, where mental health is a serious issue. They have a dedicated helpline and even a construction worker mental health app.

Help with urgent bills

If you find yourself making tough choices between heating your home and feeding your family, no amount of mental health support will solve your immediate crisis. That’s when you need to fall back on emergency resources like food banks and “Community Fridges”. A food bank will generally need you to have a voucher to use, but Community Fridges usually don’t. They’re also good resources for learning new skills and ways to reduce household food waste.

Help with council tax debt

As for the benefits you should be claiming, you might be surprised by what you qualify for. Benefits like free social care and Disabled Facilities Grants can be a genuine lifeline for many. Your local council might also have a range of schemes and services available for people on lower incomes. If you’re suffering from mental health problems yourself, there may be extra benefits you should be claiming.

Energy bills are a massive worry all across the UK, and the industry regulator Ofgem can offer advice and information on how to get help with rising costs. If you’re struggling, it’s also worth getting in touch with your energy supplier directly. Many of them have options for people facing unmanageable bills.

6 ways to save on gas & electric

Tackling your own finances

Once you’ve made sure you’re claiming all the help available to you, it’s time to get your money organised. Start by collecting up all the important documents you’ll need. We’re talking about bills, statements, receipts, payslips and so on – anything that’ll help you pinpoint exactly where your money’s coming from and where it’s going. Keep an eye on your bank balance throughout the month so you’re never caught by surprise by an automatic payment that leaves you shorter than you’d realised.

It’s worth being systematic about this. For instance, you might find it helpful to set some time aside each week to look through your finances, pay any outstanding bills and check how you stand. You’ve already noted down any particular times when you’re likely to overspend, so this is where you start using that information to make your financial planning easier and more effective.

Before you know it, you’ve already made your first real budget. Now it’s time to get into the real details. Look at your regular costs, and sort out the essential ones from the ones you can actually control. Essential costs would include things like your rent or mortgage payments, energy and phone bills and your Council Tax. If you’ve got debts racking up interest, remember that they’ll almost always mount up faster than the interest on any savings, so it’s a smart move to pay them down first before you start socking extra cash away.

If you need to get a tighter grip on your spending, ditch the plastic and try going cash-only for a while. We overspend so often because it’s being made easier to splash out all the time. At the start of the week, take out the amount of money you can afford to spend in cash, and stick to the limit. At any time, a quick glance through your wallet will give you an instant running total of what you have left to spend. For your essential costs, setting up Direct Debit payments will help make sure they don’t stack up. If you’re still struggling, get some of the debt advice we suggested earlier – and take a look at the government’s Breathing Space service to see if it can help. Speaking of breathing space, while you’re doing all this, make sure to give yourself a moment to take stock of how you’re feeling. Track how your mood changes as your finances improve. You might be surprised how much tackling one can improve the other.

Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.