Heather Arranie 
Have you ever scrolled through your favorite online store late at night, impulsively added to your cart and continued to check out?
According to The Financial Health Network, people with the lowest incomes in a given area are 1.5 to 3 times as likely to experience mental health issues–like depression and anxiety–as high-income people in the same area.
How is money and mental health connected? This article will delve into the side effects of having a bigger bank account–or no savings at all–and why this can affect our choices.
Studies Showcasing Money and Mental Health
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As stated in this report by the National Library of Medicine, there is a strong relationship between financial worries and psychological distress among U.S. adults.
Using a sample from nationally represented NHIS data in 2018, these associations were different by socio-economic characteristics such as marriage status, employment status, household income, and home ownership.
With this in mind, how does the psychology of wealth change behavior?
Alcohol and Substance Abuse Among Wealthy Teens
Children in wealthier families suffer anxiety higher than families with lower incomes, and this includes being prone to substance abuse.
Possibilities for this can be a lack of boundaries, isolation from parents and family, high pressure and expectations, preoccupation with material wealth, inhibited development of friendship or intimacy or their lives being mapped out with constant activities and little free time.
Owing Debts Causes Stresses
According to the Financial Health Network, a large meta-analysis of 65 papers found that the majority of studies were about the relationship between debt and mental health issues such as mental disorders. Additionally, a paper in the Journal of Clinical Psychiatry found that debt burden is also associated with an increase in suicide attempts.
Individuals may take on debt with less agency or choice–such as credit card debt to pay monthly bills–rather than mortgage debt, which is viewed as an investment. The Financial Health Pulse 2023 U.S. Trends Report stated that 29% of Americans reported having “unmanageable” levels of debt in 2023.
Causes Mental Health Conditions
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Many young adults under 25 have reported that financial worries have negatively affected their mental health. What kind of mental health challenges can money matters cause?
- Sleep disturbance and insomnia: If you lay awake at night wondering how you’re going to pay bills or afford your next vacation, you’re not alone.
- Physical health problems: Chronic stress due to financial worries can cause headaches, digestive issues, gut health, and even a weakened immune system.
- Relationship strain: Money financially strains friendships, family and intimate relationships.
- Self-esteem: Money can be tied to value and worth, so zero money in your bank account can impact self-confidence.
- Reduced work performance: Lack of finances can decrease focus and productivity at work, affecting overall job performance.
Household Wealth Affects Mental Health
This report on household wealth and individuals’ mental health (2012 to 2018) resulted in household wealth having a greater impact on the mental well-being of low-educated groups and individuals in the Western region.
After all, wealth can provide a sense of security, basic living security, and medical insurance. Likewise, the causal effects of exogenous changes in housing wealth on the health and drug crisis in the US have contributed to “deaths of despair”.
Housing wealth shows an improvement in self-reported mental health by 1.0 (1.10) percentage points and decreasing the drug mortality rate by 4.3%.
Affects Ability to Save Money
Less money means poorer mental health, so you’re spending more than you should to feel better, and you feel sad about not saving money. Mental health affects our finances, and finances impact our mental health: it’s a non-stop cycle.
With increased impulsiveness and memory issues, this makes it harder for you to manage your finances. Your spending patterns and general financial decisions change when in poor health.
According to this Bankrate survey, 47% of Americans say money is negatively impacting their mental health and causing stress, anxiety, depression, loss of sleep, and other side effects.
Money and Mental Health: Recognizing Spending Habits
Image Source: The Relationship Between Financial Worries and Psychological Distress Among U.S. Adults
With the findings we have access to, this offers insight to policymakers to develop public health and financial educational programs for individuals struggling with money-making decisions, especially vulnerable populations, who can be more at risk. How can you recognise your spending patterns?
- Consider how you feel when you make a purchase.
- How do you feel when committing to a bigger purchase?
- Think about if there are moments where you’re less likely to spend.
- Consider how comfortable you are discussing money matters with friends and family.
- If you check your bank account often, how does it make you feel?
Money and Health: Support is Available
Money and mental health impact us often daily, although we might not subconsciously realize it. Whether you have a large sum of money in your bank or none at all, it’s important to understand the side effects of finances and what you can do to be more responsible.
If you’re finishing high school or considering pursuing new qualifications for a better salary, there’s much to consider. If you’re wondering how much nurse practitioners make, teachers, engineers, social workers, or animal attendants, don’t be afraid to reach out to a financial advisor, counsellor, or a close friend for support. Money is important, but always put yourself and your needs first.
