It’s Mental Health Awareness Month: Understanding the Correlation Between Mental & Financial Health
About the author: Lamar Watson, CFP®, is a Fee-Only Financial Advisor in the Washington, D.C. area that works with clients virtually across the country. Lamar's work with his clients focuses on budgeting, employee benefits, paying down debt, buying their first home, and investing. Lamar is the Founder of Dream Financial Planning, a virtual Fiduciary Financial Planning firm specifically designed to help young professionals and minorities take control of their finances and fulfill their dreams. Feel free to schedule a complimentary consultation to learn how we use the DREAM Financial Planning Process ™ to help our clients achieve their goals.
Approximately 20 percent of adults are impacted by mental illness.1 For around 70 years, May has been recognized as Mental Health Awareness Month, meaning this is an opportune time for us to advocate, empower and listen.
If you, or someone you know, is struggling with their mental health, you may find financial health suffers as well. Why? Because there’s a direct correlation between mental wellness and financial wellness. In fact, a recent study found that individuals with depression and anxiety were three times more likely to be in debt.2 In recognition of Mental Health Awareness Month, here’s an explanation of how health and wealth can often go hand-in-hand.
Avoidance of Problems
Money is the second most common source of stress amongst adults.3 Therefore, it makes sense that dealing with bills, debt and budgeting is stressful. If you’re already feeling unwell, avoiding additional stress is understandable.
The problem is, avoiding your financial obligations won’t make them go away. And in many cases, it can actually make them worse. The temptation to push aside bill paying or phone calls to the credit card company is strong, but tackling these tasks on time or right away can create long-term relief.
Feelings of Hopelessness
When your mental health is struggling, it can be hard to think long-term. If you feel as though you’re losing control of the things around you today, what’s the point in trying to work toward future goals? Feelings of hopelessness can occur, and they can make long-term financial decision-making really tough.
Impulsive Spending
Going hand-in-hand with loss of control is the urge to spend. When everything else seems to be spiraling, making a purchase can feel like something you actually have control over. The problem is, of course, this can lead to impulse buying - which can wreak havoc on your budget and increase debt. And with a lack of focus on facing your financial situation head-on, could create a harmful cycle of spending more than you have while neglecting to address the accruing debt.
Decreased Energy
If your mental health is suffering, you’ll notice your energy levels decreasing as well. Fatigue, trouble sleeping, and lack of focus can all be common symptoms of declining mental health or stress. With what energy you do have, it’s likely you don’t want to spend it on your financial obligations. But your financial wellbeing requires action and focus, especially if you are faced with a large amount of debt or a substantial long-term savings goal.
Hard to Think Clearly
When you’re not feeling your best, making sound, rational decisions can be challenging. Your judgment may be clouded by how you’re feeling right now, meaning it’s tough to try to think about your future - especially your financial future.
It’s likely the events of this past year have challenged your mental health in some way, and it’s okay to not always be okay. If you’ve found that your financial wellness may be suffering as a result of your mental health, reach out to your trusted financial partner. They can help keep your spending and saving on track today while encouraging healthy financial habits that keep your long-term goals a priority.
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