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Mental health problems can be the cause or result of unmanageable debt, and resulting stress and depression only makes matters worse. We explore the link between money and mental health.

The Link Between Money and Mental Health


  • While occasional shopping can be a mood booster, this pricey coping mechanism can quickly become a problem.
  • The cyclical link between mental health conditions and money issues, and how to deal with both.

Everybody worries about money, and though most people are likely to find themselves in a sticky financial situation at some point or another, those with mental health concerns may  be more susceptible to getting themselves into crushing debt. Of course, as debt mounts and finances become increasingly strained, mental health problems are likely to worsen.

In many cases, mental health issues can be the direct cause of debt. According to a study of over 5,000 people by The Money and Mental Health Policy Institute, 93 per cent of people with a self-identified mental health issue said they spend more cash when unwell, and 88 percent said they could not keep up with their bills.

On the other side of the coin, a build-up of debt can result in the beginnings or exacerbation of a mental health problem. Debt can trigger unsettling emotional responses including anger, stress, denial, fear and depression. Unfortunately, those symptoms can result in further irresponsible spending as sufferers lose track of their finances or find certain transactions to be meaningless.

Money isn’t everything, true, but it is an important component of a balanced life.  The feeling of a lack of control over one’s finances can be profoundly destabilising, even leading to issues such as alcohol or gambling addiction. Let us take a look at how mental health can result in financial hardships, the ways in which finances can affect mental health and why both money and mental health are so interconnected.

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How Does Mental Health Affect Money Management?

Our mood and emotional responses can lead us to spend money in ways we normally would not, and this does not always necessarily stem from negative feelings. Of course, some people may splash out to lift their mood then they are feeling down, but feeling ‘high’ can also lead to unnecessary spending.

Those with bipolar disorder are more likely to spend impulsively during periods of mania or hypomania, potentially resulting in serious debt. Remember the last time you felt great about life and felt like rewarding yourself?  Manic periods can lead some people to go on huge shopping sprees, spending irrationally and racking up large credit card bills.  While it may seem harmless at the time, reality sets in once interest starts to compound.

On the flip side, people struggling with depression or anxiety often self-medicate with ‘retail therapy’.  While treating yourself occasionally can be a mood booster, this pricey coping mechanism becomes a problem when spending gets out of control.

How Do Finances Impact Mental Wellness?

Financial wellbeing is strongly linked to psychological wellbeing.  Debt and financial concerns can be profoundly destabilising, having an impact on people’s stress levels, self-confidence and relationships.  This can spur mental health issues, or exacerbate existing ones.  Further spending and substance abuse, potentially leading to addiction, are common responses.

The level of anxiety associated with significant debt can result in serious mental health problems if left untreated, often causing debt problems to worsen. Money issues can adversely affect your ability to socialise or engage with your support network as usual, further impacting mental health.  Those whose mental health is suffering as a result of debt may have to take time off work, and the resulting loss of income only makes matters worse.

Unfortunately, people in denial may continue to deny their debt and spend compulsively, perpetuating the cycle.

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The Cyclical Link Between Financial and Mental Wellness

Mental health problems are far from uncommon – one in four adults will experience mental health issues at some point during their lives, and one in two adults in debt has an existing mental illness. The connection between financial and mental deterioration is undeniable according to most studies, and sufferers are often reluctant to reach out for help.

Unfortunately, mental health and money issues are cyclically linked, with mental health conditions affecting our finances and vice versa.  Ultimately, those who find themselves caught in the debt cycle may lose the motivation to manage their finances and address the problems they are facing.

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If this sounds familiar to you, it is a good idea to speak to both a mental wellness professional and financial advisor.  There are many online resources for money management, as well as charities that offer free resources for those seeking to get their finances under control or get out of debt.

At The Cabin Dhaka, we understand the impact that all areas of life can have on mental health.  Our holistic treatment approach takes your lifestyle into account, and we employ experienced clinical counsellors and psychologists who have extensive experience in dealing with an array of disorders.  If you feel that you are struggling with issues that keep you from functioning at your full potential, contact us today to arrange a confidential assessment.