The hidden cost of money stress on your health
The conversation about mental health often overlooks one of the largest contributors to health and well-being - your relationship with money. Money isn’t about the money itself but what money enables - to cover your needs, to have a standard of living, to participate in life, and perhaps at the core of it, to feel safe and calm. Money is also often a taboo topic we avoid discussing due to feelings of shame or vulnerability and so can be a hidden and lonely source of stress.
I realise writing this, that I’ve never actually written a word about money and mental health before. However, it’s something that I think about a lot currently, in the context of our ‘cost of living’ crisis here in New Zealand. There is so much strain out there for so many and a bit of mindfulness and encouragement to do your wellbeing practices falls short - if you can afford to access therapy at all. Many of my clients report growing up with economic hardship and this experience can translate into a lifelong mental struggle with money - including intrusive negative thoughts and even flashbacks and anxiety - with many daily triggers.
This article unpacks chronic financial stress and what this entails, how this can intersect with your well-being, and what can realistically be done to help break the vicious cycle if you - like many right now - are experiencing chronic stress, or even anxiety or depression, due to current or imminent financial concerns. This article won’t cover financial advice or the role of public policy in creating and addressing economic stress (that’s out of my scope) but will encourage you to think about what is within your control to change.
What is financial stress?
We can possibly all relate to times when money affected our stress levels or mood, to differing extents. A 2022 review study found that experiencing financial stress was associated with depression, and unsurprisingly, the association was strongest in populations with lower income or wealth.
Financial stress can be broken down into 1) objective stressors and 2) subjective feelings of sufficiency. Objective stressors are facts about your financial situation while subjective feelings about these facts depend on your individual self, your perception of the stressor, and your perceived ability to cope and access resources or support.
Examples of objective stressors are:
level of debt,
unemployment,
low income,
lack of education,
poor housing,
low socioeconomic status,
lack of assets,
being unable to meet essential needs (e.g., paying for food, clothing, bills, and medical care)
inability to meet fixed payments (e.g., mortgage, creditors).
In contrast, subjective feelings of sufficiency include:
subjective stress,
perception of your financial situation,
financial dissatisfaction (between where you are and where you want to be)
psychological experiences of anxiety and depression and emotional responses to financial experiences - for example feeling fearful of having debt or experiencing shame and embarrassment after defaulting on bills or debt repayment.
How can financial stress impact your mental health?
There are three main theories explaining the relationship between finances and mental health:
Financial stress causes mental health problems like depression, through malnutrition, unhealthy lifestyles, isolation, and limited resources to cope with adversity (social causation theory).
Different people will perceive the same financial situation in different ways, resulting in different stress responses. They may also have different abilities to manage financial resources, different aspirations, and different perceptions of what “sufficiency” means for them. Long-term subjective financial stress can tip you into an endurance stage of stress which can erode good mental health and well-being via the gut-brain-axis (psychological stress theory)
Poor mental health can negatively impact your finances and create a worse financial situation. For example, certain mental health conditions can result in increased healthcare expenses, reduced productivity, more risk of unemployment, lower income, plus the potential for social stigma (social selection theory).
All three theories have validity and contribute to a vicious cycle where it can be challenging to get out of financial stress once there. This is because health and well-being can erode through a perpetual fight-or-flight response where the capacity to use your brain and body to respond to stress effectively diminishes. Unhelpful coping can also result, including eating, sleeping, and moving less or turning towards addictions to numb or distract but do not solve the problem long-term. Learnt helplessness can eventually result after too much unresolved stress and inadequate support or resources - where it feels like no matter what you do or try the situation will not change.
Get back to the present
If you’ve been experiencing chronic financial stress and you have been in fight-or-flight mode for long enough you may even tip into a numb freeze response. Because finances are tied to feeling safe at a primal level (i.e., money represents being able to feed, house, and care for yourself or your family) you can experience financial trauma if you are repeatedly unable to achieve this or have a history of financial insecurity.
Getting present involves strategies to calm your nervous system such as diaphragmatic breathing which is a specific type of breathing that slows down your exhalation to shift you out of stress and into the relaxation response. A second type of strategy is to ground yourself using your senses to shift out of stress and bring you back into your body and be aware of being present in your surroundings.
“Grounding invites you to sense your body, notice your tension patterns, and surrender the weight of your physical body into gravity to feel the support of the earth. As a resource for trauma recovery, grounding can help you reclaim a sense of safety, feel rooted in the present moment, and strengthen your resilience.”
Dr. Arielle Schwartz
Once you feel more calm or present, you have an opportunity to use your logical mind to problem solve and create some boundaries around your money behaviours which may tip you back into fight-flight-freeze.
For example:
Are you spending a lot of time worrying about the worst potential future scenarios but with nothing useful coming from it AKA catastrophic thinking which is a “self-perpetuating downward spiral”?
Are you constantly checking your bank accounts and being triggered by looking at debt, bank balances, or upcoming bills you can’t meet?
Do you engage in consumer culture and impulsive spending on unnecessary items as a way to feel happy in the moment but know that this worsens your situation and creates further anxiety?
Alternatively, do you avoid looking at your finances at all but know they are not getting any better from pathologically avoiding them?
Or do you not allow yourself to spend at all, engaging in obsessive frugalness as a way to try and feel safe and avoid anxiety?
Do you have the capacity for acceptance AND change? To acknowledge the full reality of your current financial position and every decision and event that has contributed to it up until this point? Or, do you struggle to accept your circumstances which keeps you from being able to get on and work on changing things?
Activate yourself
The antidote to learned helplessness is to take effective action. Psychologists call this behavioural activation. This is designed to help you out of being stuck and immobilised as it communicates to your brain that you are doing something about the problem. Action breeds further action and step-by-step things can change.
This is a good approach towards objective financial stressors that need addressing so that solutions can be sought and found.
In the review study, they found that the largest contributing objective financial stressor to developing depression was unsecured debt (e.g., credit card’s accruing interest, missed mortgage payments) rather than secured debt (e.g., having a mortgage itself). To address these or other objective financial stressors, you might like to get independent financial advice and budget support so you can then create a plan that you can enact over time to solve the problem.
Taking action also relates to the concept of an internal vs. external locus of control. Taking action helps to feel that there are some things that are within your control (internal locus), no matter how small, and this helps to feel less vulnerable to the situation or that there’s nothing you can do about it (external locus).
Taking action also helps to close the gap between where you are now and where you want to be and can help alleviate frustration or despair by creating hope for change.
Taking action can also apply to doing health-promoting behaviours that are threatened by being under long-term stress but that are vital to offset it. These behaviours will help your mind and body to work their very best so that you can solve the problems you need to and survive:
Optimal regular nutrition that includes protein, vegetables, and healthy fats - one pot wonders with mince, beans and frozen veggies will always trump cheap takeaways and can be consumed over many days or stored in the freezer.
Reduce coffee/caffeine, refined sugar (processed junk foods) and alcohol which won’t serve you and may increase stress in the long run.
Drink enough water - being dehydrated contributes to feeling stressed.
Move your body - getting outside for a walk, doing some at-home yoga stretches, and finding a way to release tension from your body will clear stress hormones, help with managing anxiety or depression symptoms, and prevent declining health.
Practice a calm-down routine at night to create the best possible sleep and to support healing and immune function - don’t look at your finances in the evening as this can create stress when you need to be relaxing. Get off your screen, have a cup of relaxing tea, find some pleasant distractions such as reading, drawing, music, and connection, and practice relaxation strategies to calm your nervous system down.
If you can't sleep or wake overnight use breathing and unhooking from your thoughts to go back to sleep rather than lie there ruminating or worrying about future scenarios. There are many helpful mindfulness Apps including my favourite, Smiling Mind (which happens to be free).
Find support from a mentor, peers who relate, or a support group - this enables you to safely share your concerns without being judged so you feel less alone and can find or share solutions.
If there isn't any room in the budget to pay for fun activities, do you make the most of the “little things” to prevent feeling deprived and to cultivate joy? These can be free, cheap, found in nature, experienced by being truly present with people you feel connected to, and we often take them for granted. Notice these and practice being grateful for them.
If you don’t already have one, create a buffer account so you have access to emergency money for anything urgent and unexpected, this helps to feel less vulnerable as your brain knows that there is a safety net if needed.
Create space on a regular basis to look at your financial situation and how your plan to solve your problem is progressing - and re-evaluate if any changes or additional support are needed.
Change your perception
There is a big difference between perceiving you don’t have sufficient money as you are not able to pay for your essential needs and bills or perceiving that you’d like to have a lot more money than you do but are objectively financially stable.
One insidious factor in this is that we now live in a consumer culture which can impact our perceived sufficiency. This culture drives a feeling of insufficiency, and that we don’t have enough or as much as other people. This focuses on desire rather than need and our world is set to cue and trigger feelings of not enough and needing more. The opposite of this consumer culture is an essentialism approach. An essentialist approach to money means purchasing only the things that really add value to your life for the right reasons. Reflect on whether you are being sucked into consumer culture yourself and if there is any flexibility on how you view what you truly need or value.
The most important part of surviving financial stress is to hold hope for the future.
No matter how bleak it might seem today - and I fully appreciate and empathise that this may be the case for many people reading this - look for your own creative way to see some light at the end of the tunnel or get some support to help you find it.
Believing that you can change your circumstances - or the circumstances for your children should you have them - comes from getting out of fight-flight-freeze so you can create a plan and take care of yourself through financial stress. An effective plan includes acknowledging your current financial situation and accepting it, then exploring both what you can change about the objective reality of the situation and the subjective experience you have of it. Through knowing that you are doing all that you can, your mind and body can best support you to stay healthy and improve your financial prospects.
