Stress is a normal part of life. However, prolonged and relentless stress can start to chip away at your mental stamina over time.Â
Personally, I’ve found that financial struggles can be some of the most unrelenting forms of stress in existence. They hamstring your ability to do things and can impact your sleep, your schedule, and your overall state of mind.
Here are a few thoughts and discoveries that I’ve made over time about how finances and mental health are connected — along with some advice I’ve found to be helpful in managing the relationship between the two.
The Link Between Financial Stress and Mental Health
Countless findings from various research and studies have shown a distinct connection between financial wellness and overall health. For example, finances have been reported as the number one source of stress regardless of age. The worry about paying bills, defaulting on loans, and simply having enough cash on hand to put food on the table can be debilitating at times.
Even worse, it can have a chain reaction of symptoms. For instance, worrying about money matters can lead to:Â
- Sleep loss;
- High blood pressure;
- Depression;
- Anxiety.
To make things even worse, many of these mental and physical challenges can lead to medical bills that only exacerbate the stressful situation.
The Mental Health Benefits of Good Finances
There’s no doubt that poor finances can lead to an unhealthy mental state. However, I’ve also discovered that if you can keep your finances in good order, it doesn’t just get rid of the negative aspects — it can also help you tap into a world of positive mental health benefits, too.
For instance, if you can shift your credit score from bad credit to good credit, it can help you gain access to things like:
- A better chance of being approved for a loan
- Higher credit limits;
- Lower interest rates and security deposits.
These financial capabilities can help you manage your expenses, naturally reducing the stress associated with them in the process. Additionally, healthy credit and good finances can help you get approved for critical things like housing and employment.
Along with better stress levels, healthy finances can also free you up to pay attention to other areas of your life. Rather than having everything that you do revolve around the need to make enough money to live paycheck to paycheck, good finances can help you focus on things like eating well, exercising, and otherwise making the most of each day. In the same way that bad finances can lead to more medical bills, this ability to have a more holistic view of life can help you stay healthier — and reduce your costs in the process.
Tips to Overcome Financial Stress
Acknowledging the connection between finances and mental health is a great first step. However, you shouldn’t stop there. If you’re aware of the fact that your monetary responsibilities are feeding your mental health struggles, here are a few basic steps to help you orient your finances in a direction that will help calm your mind and improve your life.
- Create a budget and stick to it: Adjusting your lifestyle to live within your means isn’t just something you should do in response to the COVID crisis. You should also create, update, and stick to your budget at all times to avoid overspending and perpetually adding to your debt. A budget can also help you discover, forgive, and heal any money wounds that you may have received in the past.
- Manage your credit and debt: Credit and debt play an undeniable part in financial health (or stress). It’s important to pay as much of your debt down as possible and avoid taking out more loans unless you have to. However, it’s also wise to continue using revolving lines of credit, like your credit cards, consistently and then paying them off every month.
- Build a long-term financial plan: One of the best ways to let go and trust life as it happens is to create a long-term financial plan. This gives you guidelines to work towards without stressing out as you go. It also helps you make sound decisions for the future, such as saving up a downpayment for a mortgage or transitioning to a backdoor Roth IRA to increase your retirement savings.
Keep in mind that these aren’t quick fixes. They require patience, thoughtfulness, and commitment. If you can seriously begin to implement things like sticking to a budget and managing your debt, it can develop healthy financial habits that can positively impact the state of your mind.
Finding Mental Peace Through Good Finances
Money should never be the end goal in life. If that’s the case, you’re going to find yourself in an unhealthy state of mind, no matter how successful you are.
Nevertheless, proper management of your finances — regardless of how much money you have — can have a profound impact on your mental health. I’ve found that maintaining good credit, keeping a sound budget, and creating long-term financial plans have all freed me from the terrifying specter of chronic financial stress.Â
At this point, there’s no doubt in my mind that putting an up-front effort into your personal money management today is well worth the amount of financial stress and mental anguish that it can save you from tomorrow.