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Managing Your Mental Health and Finances

Managing Your Mental Health and Finances

June 06, 2024

Mental health and finances are often intertwined. Financial challenges can trigger anxiety and depression, which when left untreated, can morph into severe mood disorders. Mood disorders can lead to overspending or impulsive spending, a maladaptive disorder that offers temporary relief by activating the reward pathway.

Unfortunately, the short-term 'high' plunges you deeper into depression or anxiety once it wears off. It’s crucial to recognize the emotional and psychological aspects of financial management to avoid irrational decision-making.

Recognizing the Emotional Connection

Many people fall prey to emotional spending to cope with negative feelings or, sometimes, boredom. It’s easy to impulse buy when stressed, sad, lonely, afraid of missing out or bored. Owning new things, the sudden urge to spend, and the associated status quo release feel-good molecules in the brain that activate the reward pathway associated with feelings of pleasure, satisfaction, and motivation.

This boost of positivity lasts a short while, evoking overwhelming despair in its wake without solving the underlying problem. It also increases the insatiable craving to spend to maintain the 'high' long-term, creating a dependence that eventually becomes an addition. This destructive cycle accumulates your debt and reduces your savings.

Persistent concern about bills, debt, and financial insecurity can trigger chronic stress and anxiety. This ongoing financial strain, coupled with difficulties meeting essential needs, may foster feelings of hopelessness and helplessness, possibly leading to depression. Moreover, financial stress can strain personal and professional relationships, causing conflicts and adding to emotional distress.

Strategies for Managing Financial Stress

Create a budget to monitor your spending and stay within the confines of your income. Use budgeting and tracking apps or spreadsheets to track your income and expenses and gain awareness of your spending habits. Set realistic goals within a defined timeframe to avoid stretching your finances too thin and the pressure, stress, and anxiety to keep up. Celebrate small wins and progress as motivation to stay the cause. 

Prioritize self-care to build emotional resilience. Exercise daily. A physical workout releases endorphins, which activate the reward pathway, helping you to feel good even during tough economic times. Ensure you get at least eight hours of sleep daily to revitalize your mind and improve your mood.

Practice relaxation using techniques like mindfulness, meditation, and breathing exercises to stay calm during stressful situations or anxious times. Talk to trusted friends and family or seek help from a mental health professional for support, accountability, and healing.

Building Financial Resilience

Life always throws unexpected curve balls. Developing financial resilience is essential for handling money-related challenges. Financial resilience is the ability to withstand and recover from financial setbacks, unexpected expenses, or periods of income disruption. You can achieve this by:

  • Setting up an emergency fund covering at least three to six months' worth of your expenses to prevent depleting your savings or going for high-interest loans
  • Create a debt management strategy like debt consolidation or snowball/avalanche methods to reduce your debt burden. Prioritize high-interest loans and make consistent payments to keep interest rates low.
  • Diversify your income streams by investing, taking on freelance work, and other side hustles.
  • Set up automatic transfers to your savings account and investment accounts.
  • Surround yourself with supportive friends and family who encourage healthy financial habits.

Recognizing the Need for Professional Help

Are you feeling overwhelmed by your financial obligations? Are your financial worries interfering with your everyday living? Perhaps it’s time to seek professional help. A counseling psychologist can help you develop healthy stress management techniques and develop mental resilience over life stress. They will help you identify the source, triggers, and maladaptive behavior of choice and tailor solutions to empower you mentally.

A therapist has the training, resources, and experience to dismantle complex moods and emotions. Their professional support is necessary to develop a healthy mindset regarding your finances.

Begin Your Journey to Mental Wellness Today

Your financial and mental well-being have a complex correlation. Upholding financial management strategies can improve your mental health and life satisfaction. It’s possible to overcome your financial challenges and the mental distress they invoke with financial literacy, strategies, and support.

Here are resources that may help you get started on this journey to financial and mental health.

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