Wealth and Wellness: How Your Money Affects Mental Health

While society makes us believe we need a big salary to be content, financial success doesn’t equal happiness. However, if we experience financial instability or struggle to make ends meet, our mental health can severely suffer. So, how exactly are wealth and wellness related? Learn the signs of money anxiety and how to dig yourself out of debt.

Financial stress effects on mental health

Without a sense of security, feelings of anxiety and depression tend to rise. Constantly worrying about money can chip away at your sense of self-worth and make you doubt your capabilities. A loss in stability or confidence can make it harder to find joy in the simple things, and that heightened state of anxiety can lead to a persistent sense of worry.


You might find it harder to do even the smallest things every day, which could throw you off your routine or make you lack the energy to make changes. Obviously, this can make things worse and make it harder to get ahead financially.


We experience financial anxiety when we feel a lack of support, instability, or that money is scarce. For example, people who work freelance or for themselves often experience more stress since their workload is unpredictable.

Financial stress can even start at a young age if we grow up with a history of deprivation. Whether or not you grew up in poverty, financial stress at home can seep into your mind. The lack and fear mentality can be learned, and watching how our caregivers handled money can affect how we cope as adults.

Currently, one of the biggest causes is the rising inflation rate. A 2022 Stress in America survey found that nearly three-quarters of adults reported feeling stressed about money. About half of Americans claim that basic housing costs are now a major stressor.


Some signs that you’re struggling with anxiety or depression due to money stress could include:

  • Rumination. Worrying about having money for bills might be on your mind all day long.
  • Avoidance. You might feel too afraid to find out the extent of your debt and avoid taking action as a coping mechanism for the stress.
  • Difficulty making decisions. Even the smallest of decisions become hard to make when stressed.
  • Guilt. Buying a new sweater or even a coffee might bring enormous amounts of guilt and frustration.
  • Little work-life balance. You might feel like you have to constantly work overtime and have little time for taking care of yourself.
  • Physical symptoms. It’s common to experience emotional eating, difficulty sleeping, digestive issues, headaches, or general aches and pains when stressed. Immune function can also lower and you might notice yourself getting sick more often.

Up to a certain point, an increase in income can improve your quality of life and mental well-being. This is especially true when coming from a place of poverty or financial instability. The ability to afford the necessities of life without stress can improve your mental health.

However, beyond meeting basic needs, there isn’t as strong a correlation between wealth and happiness. Depending on where you live, once you reach a certain income level, extra money has a much smaller impact on your overall satisfaction.

For some, increased wealth can lead to more stress.The responsibility of managing it or any extra pressure or workload, and the fear of losing it, can diminish its worth.

Ultimately, whether or not money brings you happiness depends on whether your basic needs are met, how you spend it, and your life goals and values. For many, relationships become the most important factor in happiness once needs are met.

How to cope with financial stress

Money management feels overwhelming to most people, but there are practical steps you can take to regain control.

1. Look at your debt

It sounds scary (or terrifying), but it has to be done. Not knowing the numbers and avoiding bills only leads to more stress. Once you bite the bullet and learn exactly where you stand, you empower yourself to take charge and try different resolution techniques. Even if it feels like there’s nothing you can do, taking action and trying helps remove the feeling of helplessness.

2. Ask to lower your interest rates


Many people don’t realize they can ask credit card companies and banks for reductions in their interest rates. Banks might even allow you to take out a small loan at a lower interest rate than your credit card to pay the card off with a lower fee. You can also ask for payment plans or a few months of hold before starting repayment.

Re-negotiating debt is possible; don’t be afraid to call and ask.

3. Create a clear budget

Once you know how much you owe and make every effort possible to reduce fees, you can start budgeting. As boring as it sounds, it’s an empowering task. You get to see exactly where your money goes and what you can do to make ends meet.

While switching to cheaper groceries or fewer nights out might feel disappointing, look at it as taking charge of your life. Recognize the self-esteem you can build by sticking to your goals and looking out for yourself, no matter what.

4. Take action to earn more

It sounds easier than it is, but earning more may be within your reach. Some people don’t ask for as much of a raise as they should. The fear of rejection and not being "good enough" can take over. Many don’t even apply to jobs they could be a good fit for if they don’t feel they meet all the requirements.

The truth is, you have to fight for your worth. Be bold. Ask for a raise or promotion, and apply to jobs you don’t have all the skills for. No matter how busy you are, schedule a certain amount of time per week to apply for better-paying work.

You can also do something on the side, like selling homemade items or offering services online. Even if it’s not your dream job, knowing that you’re taking action to pull yourself out of a debt cycle and that it’s temporary can drastically reduce your stress.

5. Manage stress daily


Solving all our money issues doesn’t usually happen overnight. So to help soothe the ongoing stress, we need to make sure we’re also having some fun. Mindfulness, a balanced diet, and movement can all help to reduce stress, but so can seeing friends.

Science shows that socializing is one of the best things we can do for our mental health. So even if you’re strapped for cash, don’t let yourself become a hermit. Get creative and invite friends to do things you wouldn’t normally do, like having a potluck, going out for a hike or picnic, or having a board game night.

Money is important for keeping things stable and comfortable, but relationships will help pull you through the tough times. Take care of yourself and lean on others to find the strength to take action toward improving your finances. Remember that no matter how hard it is, taking action can empower you and improve your mental health.


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