How improving mental health can boost financial wellbeing

Effectively managing money can be challenging, even if your mental health is fine. If, however, you’re prone to anxiety, depression, or any other psychological disorder, sound financial decisions can be more difficult to achieve.

By addressing any underlying mental health issues, you can also set yourself on the path to financial wellness. We consider how to achieve this. 

Tip: Planning your finances can bring relief from anxiety. Use our handy budget calculator to get started.

The link between mental and financial health

Mental health problems affect our ability to manage our everyday affairs effectively. Danielle Reynolds, the founder of Upright, an online therapy platform, likens the link between emotional and cognitive capacity to cutlery in a drawer.

“According to the ‘spoon theory’, each ‘unit’ of energy we spend on a given task can be represented by spoons in a drawer,” she explains. “We may start the day with a full drawer, but those who struggle with mood disorders may experience an empty drawer early in the day.

Feeling thus depleted is likely to affect how we manage money; and, notes Reynolds, “A good night’s rest alone won’t address the deficit.

“If you’re mentally exhausted, you don’t have the capacity to budget or save, especially if you’re depressed and feel the future doesn’t matter,” she says.

“Alternatively, if you overspend to achieve a ‘happy high’ in the moment, you’re unlikely to develop healthy spending habits. If you don’t have a functional budget to help you keep track of your money, you may get into debt, which will prevent you from achieving financial stability.”

How to regain control

If you have mental health challenges, it’s imperative to seek assistance, says Reynolds. If the cost of therapy is a concern, it’s worth reaching out to LifeLine or the South African Depression and Anxiety Group, both of which can assist with free counselling. Alternatively, a range of therapists offering a variety of rates can be found on the Upright website. 

“Discussing treatment options - such as specific medications or therapy to manage the symptoms of a mood disorder - with a healthcare provider, can be a step towards making positive changes to your financial situation,” says Reynolds. “This will positively affect your mental health and reinforce healthy habits.” 

On the flip side of the issue, says Psychologist Quinton Williams, poor money management can reinforce poor self-esteem, which compounds a sense of shame or guilt, or a feeling of failure.

He recommends focusing on what you’re able to control and being realistic about your problems.

“It may take you longer than you’d like to get on top of your finances. However, it’s how you learn to deal with financial woes that helps to build ‘personal hardiness’ – that is, the ability to bounce back from setbacks,” he says.

Steps towards mental- and financial wellbeing

Williams and Reynolds make the following recommendations:

• Don’t try to solve problems alone – seek support for your mental health and financial wellbeing.
• Feelings of guilt and shame may prevent you from seeking the help you need, but they are often alleviated once you take steps to remedy a situation.
• Don’t allow yourself to be defined by transient financial problems. Your value is much more than your financial situation.
• Connect with your family, exercise, eat healthily, get enough sleep, and meet your religious or spiritual needs for a sense of purpose and much-needed support.  
• Look out for free financial advice from reputable sources. This may help you achieve small financial wins and boost your self-esteem. 
• Ask your family and friends to support your lifestyle changes, such as cutting costs by visiting people at home rather than going out, or declining invitations to expensive restaurants.
• Understand that healing takes time – be patient with yourself as you work towards better mental and financial health. 

Tip: Debt consolidation can help you if you’re struggling to manage your debt.