Money and mental health matters
How can our personal finances impact our mental health?
Did you know the way you manage your money has a direct link to your mental health?
In 2022, The Australian Securities and Investment Commission (ASIC), in collaboration with Beyond Blue examined the relationship between financial wellbeing and mental health. What they found was that there is substantial evidence that financial wellbeing and mental health are connected. Unsurprisingly, “people experiencing financial challenges are at least twice as likely to encounter mental health issues than those who aren’t.”
At different times in life, finances can cause stress or anxiety. Every single day, from pocket change to paychecks and big purchases, the choices you make with your money add up. Taking control of your finances can be a game-changer for your mental health.
“People experiencing financial challenges are at least twice as likely to encounter mental health issues than those who aren’t.”
That’s where financial wellbeing comes in.
Taking care of your financial wellness is just as important as looking after your mental and physical health, and they work hand-in-hand. It’s important you feel secure and in control of your money so that you have the financial freedom to make positive choices. This means knowing you can cover your bills, save for the future to cope with the rising cost of living, and even have some fun along the way.
But money struggles and mental health challenges aren’t one-size-fits-all. Several factors influence how we deal with them, such as:
- Feeling ashamed or judged: Stigma can make it hard to seek help for financial or mental health challenges.
- Social connections: The pressure to keep up financially with your peers can be isolating without having strong support networks in place.
Ignoring money problems can worsen your financial situation, leading to stress and anxiety. In turn, poor mental health can make it harder to manage your finances effectively. For instance, stressing over bills might keep you up at night or cause feelings of panic. On the other hand, feeling depressed can zap your motivation to manage your finances, leading to a snowball effect of money troubles.
So how can you spot poor financial wellbeing?
Poor financial wellbeing can manifest in subtle ways, but some tell-tale signs are avoidance, secrecy and unhealthy coping mechanisms. One red flag is ignoring financial responsibilities, such as ignoring bank statements or letting bills pile up unopened. Those struggling may also delay seeking help from friends, family, or professionals, even when they recognise the need.
Another sign is clinging to unhealthy behaviours that exacerbate financial strain in the long run, such as excessive spending. Relying on services like Buy Now Pay Later or payday loans to manage finances instead of asking for support from loved ones can quickly lead to large debts due to their excessive interest rates and fees for late payments. This secrecy and isolation can extend to social withdrawal, with individuals distancing themselves from friends and colleagues.
If you notice any of these behaviours in yourself or someone you care about, it’s important to reach out for support. Remember, you’re not alone, and resources are available to help get you back on track. Reaching out is the first step towards a healthier financial future.
How can you improve financial wellbeing?
Do money worries ever keep you up at night or cause anxiety? Taking charge of your finances can significantly improve your overall wellbeing. The good news is, there are steps you can take to regain control and achieve financial peace of mind.
1. Track Your Spending
This is where the magic begins! Set a goal to track your income and expenses for a month. Use a budgeting app or simply keep a daily log of your bank balance. You might be surprised where your money goes. Hidden expenses like daily coffees or unused subscriptions can add up quickly, and you may start noticing areas where you can cut back on spending.
2. Tackle Your Debt
Debt can be a heavy burden, but you can lighten the load. Make a list of all your debts, including interest rates and loan terms. Focus on paying down the debt with the highest interest rate first. This will save you money in the long run and give you a sense of accomplishment as you see your debt shrink.
3. Budget and Save Like a Pro
Even dedicating 30 minutes a week to budgeting can make a significant difference. Understanding your income and expenses will help you allocate funds effectively. Don’t forget to factor in some “fun money” to keep yourself motivated. Over time, you’ll watch your savings grow, giving you a safety net for emergencies or unexpected needs and peace of mind.
4. Don’t Forget Your Super
Superannuation, also known as “super,” is a retirement savings plan funded by your employer, with the option for additional contributions. This money grows over time to support you in your golden years and has tax advantages so it’s a good idea to learn about how it works early. Super is a great way to ensure your long-term financial security.
Remember, taking control of your finances is a journey, not a destination. Celebrate each milestone, big or small, and know that you’re well on your way to a healthier, happier you. With discipline and perseverance, you can achieve financial freedom and overall wellbeing.
If I need help, what financial support is available?
It can be hard to talk about money problems but there are lots of places you can turn to for support for yourself or a loved one. Ensuring you have a strong support network set up on YourCrew means you have your trusted people to turn to when you need assistance. If you aren’t comfortable with reaching out to your Crew and need support with your mental health, finances, or both, these resources are a great place to start.
YourCrew’s A-Z Mental Health Guide
The A-Z Information Hub – Finances on YourCrew has a range of factsheets* that provide quick and easy tips to understand your financial options and where to seek support regarding topics like debt, tax, superannuation, scams and more.
MoneySmart
Moneysmart is a reliable online resource developed by the Australian Securities & Investments Commission. It provides up-to-date information and online tools to help people make better financial decisions. If you are looking for advice on money-related matters, this is a great place to start.
YourCrew’s Pathways to Help
It can be difficult to know what to do if you are supporting a friend through a tough period. Our Pathways to Help guide will help you identify what support to provide and where to go to seek help. It’s also a great tool for self-help.
Professional and Urgent Help
If you or a friend are in danger and need urgent help, a list of professional helplines is available here or you can contact the National Debt Helpline on 1800 007 007.
Debt
National Debt Helpline: https://ndh.org.au/
Chat: weekdays 9:00 am to 8:00 pm
Phone: 1800 007 007 weekdays 9:30 am to 4:30 pm
Gambling Help Online: https://www.gamblinghelponline.org.au/
Ph: 1800 858 858 free, confidential, 24/7
Gamblers Help: https://gamblershelp.com.au/ Ph: 1800 858 858 free, confidential, 24/7
*These factsheets have been made possible by the generous support of Libuska Prochazka and her family in loving memory of her son, Ben Fahy.