Money and mental health

Poor mental health and money worries can become a vicious cycle. When you’re struggling with your mental health, you may find it more difficult to earn and manage money. And equally, worrying about money can have a negative impact on your mental health.

Person looking after their mental health

How money worries can impact your mental health

Money worries can cause anxiety and affect your quality of life in a number of ways. They can:

make you feel isolated or lonely. Not having enough money can stop you doing things with friends and family, reducing your social interaction
affect your physical health if you’re unable to afford the things you need to stay well e.g. adequate housing, heating, medicine, food etc. This can have a knock-on effect on your mental health
disturb your sleep
make seemingly trivial, everyday occurrences stressful. For example, if lenders are chasing you for money, you may experience feeling of panic or anxiety when you receive letters, emails and text messages

Person looking concerned at their piggy bank

How poor mental health can lead to money worries

Just as money worries can lead to feelings of stress and anxiety, poor mental health can make it a struggle to earn and manage money. You may:

overspend in a bid to make yourself feel better
be more impulsive when it comes to spending money, as a result of mania or hypomania
lack the motivation to manage your money, or you might try to avoid thinking about money altogether
find it hard/impossible to work, which may have a knock-on effect on your earnings
have to pay more for insurance due to a mental health condition

If you’re looking for local mental-health support, you can search for help in your area on the ReThink Mental Illness website.

Tips to help you manage your money

If you find a mental health problem is affecting the way you manage your money, or financial worries are increasing your stress levels, there are a number of things you can try that may help.

Explore your relationship with money

Some people find it useful to keep a diary to monitor their financial habits – both good and bad. This means making a note of what you spend and what you save, and how these transactions make you feel. When it comes to spending, it can be useful to note down how you feel both before and after making a purchase.

This exercise can help you understand how your mood and emotions affect how you manage money. Once you have a better understanding of your decision-making process when it comes to money matters, you may find it easier to cut down on bad habits and increase how often you practise good ones.

Tips to stop overspending

If you know you’re prone to overspend, there are steps you can take that may help you stop:

Get someone you trust to look after your bank cards to make overspending more difficult.
Give yourself time to think before spending. It can be a good idea to tell yourself ‘I’ll wait until tomorrow to see if I still want it’. Having this time to reflect may help you cut down on unnecessary purchases.
Think about how long it would take you to earn the amount needed to buy something – this may make you think twice about whether you really need that item.
If you find online ads are encouraging you to spend, cut down the amount of time you spend browsing the web.
Delete apps that encourage you to spend.
Don’t save card details online.
Find an alternative to spending that makes you feel good e.g. exercise, spending time in nature, ringing a friend.
If overspending is a serious problem, you could let your bank know you have a mental health issue so they can be alert to unusual activity on your account.
You may decide it’s best to avoid credit cards altogether.

Get organised

Being organised can make it easier to manage your money when your mental health isn’t at its best.

You could try:

making sure all your important documents are filed logically in one place. This might include bills, payslips, receipts, statements and letters
create a budget. Get in touch if you’d like us to go through your budget with you. Or you can use our budgeting tool
make a note in your diary of when all regular bills and payments are due, so they don’t take you by surprise
make sure you’re claiming all the benefits and financial support you’re entitled to. Again, get in touch if you’d like help with this. Or you can use our calculator
set aside time each week to deal with money-related tasks such as paying bills
pay by Direct Debit where possible, so bills don’t pile up or get forgotten
If you’re struggling to manage your debts, get help. We’ll be happy to talk you through your options if you need free advice

Make a plan in case your mental health gets worse

If you think there’s a chance your mental health could get worse, meaning you might have to go into hospital or need someone else to manage your money, it might be a good idea to plan ahead.

Mental Health & Money Advice have a guide on managing your money if you have to go into hospital.

And if you think someone else might need to manage your money for you, Mind have a guide that covers setting up a lasting power of attorney.

Tips to reduce stress caused by money worries

If money worries are making you anxious, we’ve got a few ideas for things you can try that might reduce your stress levels:

Build your support network – having people to confide in about money worries can ease the burden, whether that be family and friends or a sympathetic manager at work or tutor at college/university. You may also find it helpful to talk to someone in a similar position. Mind have a useful guide on peer support and online communities like Clic allow you to connect with other people who have experienced mental health issues.
Spend time doing things you enjoy. Taking time out for hobbies and interests can be a useful distraction from money worries.
Build relaxation time into your day. Taking regular short breaks from dealing with stressful situations can make them easier to manage.
Take care of your physical health. Eating well, staying active and getting enough sleep make it easier to manage stress.
Go outside! Spending time in nature is another way to boost feelings of wellbeing. See Mind’s guide on nature and mental health.

If debt is the root of your stress

If debt worries are damaging your mental health, you don’t have to manage alone. Customers tell us it feels like a weight’s been lifted off their shoulders after speaking to us, so why not get in touch and see how we can help.

Debt and mental health evidence form

And if a mental health condition has contributed to your debt problems, you can use a debt and mental health evidence form (DMHEF) to ask a health-and-social-care professional for information on your situation. This makes it easier to share that information with your lenders. Some lenders may write off debt based on mental health conditions. This can’t be guaranteed and each lender will look at requests on a case-by-case basis.

Go to moneyadvicetrust.org/advice-services/dmhef/#members-of-the-public for more information and a copy of the DMHEF. Health professionals can’t charge for filling in the form.