Mental Health & Money
Money and Mental Illness
Money is intersected with our various identities and experiences, including diagnoses, race, gender, and other risk factors. It’s no wonder that there is a relationship between our money and our mental health. Contrary to what many in the personal finance space will have you believe, having more money doesn’t automatically mean a person’s relationship with money or mental health will improve.
While it is true that there is a relationship between earning more and happiness, that relationship flattens out around $90k/annually (originally $75k, but the number has been adjusted for inflation since the study was conducted). What does this mean? I interpret it to mean that having enough money to cover a person’s needs with a cushion left over to pay for things like travel, saving, or other hobbies can generally improve a person’s mental health. However, once there is a nice cushion of income over that number, more money doesn’t correlate to better mental health.
Debt & Mental Health
Debt and mental health and intertwined in the United States. 72% of Americans cite debt as being a source of stress. There is a negative stigma in the U.S. associated with debt. Because of our narrative of relying on meritocracy, or the idea that someone gets where they are in life based on how hard they work, it can be easy for a person with debt to internalize that they somehow “deserved” their debt. This can lead to feeling bad about themselves emotionally. There is sobering data from a 2013 Clinical Psychology Review study that found those who died by suicide were eight times more likely to have debt. Melanie Lockert, who wrote the book Dear Debt hypothesized that having debt that feels impossible to pay down can increase a person’s sense of hopelessness.
There is a two-way relationship between debt and depression. Adults in debt are three times more likely to experience common mental health disorders, including depression. On the other hand, carrying a diagnosis of depression can put a person at higher risk for having financial issues. The cycle is complicated: depressive symptoms include fatigue, difficulty sleeping, trouble concentrating, irritability, and sadness. As you can imagine, a person experiencing those symptoms may find it difficult to pay attention at work, complete tasks, or get along with others, putting them at a higher risk of losing their job. Another way depression can impact finances is due to the common symptom of a lack of caring about tasks--a person suffering from depression could struggle to prioritize paying their bills on time, or canceling services they no longer need, possibly leading to an increase in their debt load.
In the United States, there is a stronger emphasis on individualism and people “pulling themselves up by their bootstraps.” After the 2008 financial crisis, countries in Europe did a survey of their countries citizens’ mental health and wellness. What they found was that the more a country provided support services, like access to free food, healthcare, and childcare assistance, the better off their respective citizens’ mental health was. Specifically, social programs that helped individuals find new employment, assist with child care, reduce accessibility to alcohol, and debt relief programs supported people at risk and likely prevented a larger mental health crisis. This also indicates a relationship between having a person’s basic needs met and a person’s mental health.
Over the past few years, there’s been an increase in dialogue on student debt and mental health. The increased cost of college education, coupled with stagnant wages is a recipe for increased mental stress. A Bank Rate article looked into the ways in which student debt and mental health impact one another. They interviewed a few experts that said that having so much student loan debt prevents young adults from being able to achieve certain financial goals, like investing in retirement, taking a vacation, or buying a home.
How to Talk About Money
When it comes to talking about money when it’s related to mental health, the reality is that it might feel uncomfortable, but it is necessary. If you are struggling with your mental health and money, ask yourself which one needs support the quickest. If you are having a hard time getting out of bed, finishing daily tasks at home, work or school, then getting mental health support might be the best first step. You can text the word HOME to 741-741 to chat with someone right away. Alternatively, you can start searching for a therapist or support group who could help you with your mental health.
If money is the bigger stressor, then learning more about personal finances can be helpful. If you feel like you understand the basics, but don’t know how to get organized and started, working with a financial coach might be a good fit.
If you have a loved one struggling with their finances or mental health, try approaching them from a place of compassion and kindness. Don’t ambush them, blame them, or make them feel guilty. Express that you’ve noticed a change around their behaviors (e.g. skipping work, missing bills, or not paying you back for money you lent) and it seems out of the ordinary for them. Ask what you can do to support them, focusing on helping connect them to a resource or professional if it feels outside of your abilities.
Here are a few examples of how to talk about money with someone who you think is also struggling with their mental health:
“I noticed you’ve been more interested in a variety of hobbies lately, and you’ve shared you’ve spent quite a bit of money on them. I know sometimes when people overspend on many different things, something else could be going on. I’m wondering if everything is ok?”
“We don’t have to talk about this right now, but in the coming weeks, it’d be important for me to talk to you about your debt. You’ve mentioned as a joke several times that you’re pretty hopeless about paying it off, and that frightened me. When is a good time to talk about a plan for your debt?”
“I had a friend recently tell me that they were let go at work because their mood had really been impacted by the pandemic, and they just couldn’t find the energy or motivation to get to work regularly or on time. You texted a few times that your boss had mentioned you were on thin ice because you overslept. Would it be ok to talk about your sleep and being late to work soon?”
Professional Development For Therapists
Money is a common cause of stress for therapy clients and a risk factor associated with many mental health diagnoses. If you are a marriage and family therapist, social worker, psychologist, or mental health counselor, there is professional development and continuing education available to help you learn more about the intersection of money and mental health. Mental health clinicians are trained to help clients with a variety of stressors, but rarely is money covered in our professional training. As shared above, there is a need for mental health clinicians to understand how money and mental health are related.
In my Simple Practice Learning course “Money and Mental Health,” I teach participants how to describe at least four mental health risk factors directly related to money, describe at least four differences between a finance professional and financial therapist, describe at least three benefits of including money in therapeutic work as a mental health clinician and how to apply at least three interventions related to money in the therapeutic setting. To get access to the on-demand course, click here.