When Financial Health Meets Mental Health
As many Americans have come to learn in 2020, financial stress is inextricable from mental stress. A decline in our financial lives can lead to problems with our emotional health – and vice versa. The two are intertwined to the point where it can be hard to tell which is causing which.
It should be no surprise that mental health issues can lead to financial difficulty. Nearly three quarters of the respondents to a 2019 Money and Mental Health survey said that their mental health problems had made their financial situation worse.
On the other side of the coin, financial stress can have profound negative effects on our mental health. According to Dr. Brad Klontz, the founder of the Financial Psychology Institute, money is the number one source of stress for 75% of Americans, and those money troubles can lead to a higher risk of anxiety, depression and relationship conflicts. There’s even evidence that financial issues can lead to physical ailments, such as high blood pressure.
So if your 2020 has left you in a stressful place, you’re not alone. For a more calming 2021, here are some resolutions to keep in mind:
Don’t blame yourself for wearing down under the strain. Money causes stress for everyone. In a 2014 study by the American Psychological Association, 72% of adults reported feeling financially stressed “at least some of the time,” and nearly a quarter reported feeling “extreme stress.”
Track your spending. Just being conscious of how your spending your money each day, and each month, can help you put a brake on it.
Recognize how you deal with stress. Many people relieve stress through unhealthy activities such as smoking, drinking, gambling or stress eating. Others might pick fights with those close to them. Recognize that it’s the stress causing you to do this, and…
Find things that help you to cope. Physical activity has been shown to reduce depression, even something simple like a morning walk. Other people reduce stress by spending time with family or taking on charitable activities.
Don’t be afraid to talk about it. It’s not easy to do this, especially since for many people encountering financial problems is equated with failure. But once you start talking about it, you realize that everyone goes through these issues at some point and is likely to sympathize with you.
Plan for hard times. And of course, it helps to make financial plans, particularly one that acknowledges the possibility of some down times. A good financial plan will have you prepared in case of devastating news like a market crash or a lost job, so as to minimize the impact.
A forward-looking plan that protects you in hard times may be the best way to avoid both financial and mental stress over the long term. Your Baird Financial Advisor can help you figure out how to keep your financial resources – and your mental well-being – on track.
With a little planning, your HSA can do a lot more than fund short-term healthcare expenses.
In the latest installment of our Women Talking Wealth series, Associate Branch Manager Ana Geller discusses her own financial journey and her advice for aspiring leaders.