Did 2020 affect you at all mentally? I can't imagine it didn't in some way.
May has been recognized as Mental Health Awareness Month, meaning this is an opportune time for us to advocate, empower and listen.
If you, or someone you know, is struggling with their mental health, you may find financial health suffers as well. Why? Because there’s a direct correlation between mental wellness and financial wellness. In fact, a recent study found that individuals with depression and anxiety were three times more likely to be in debt.1 My work with Dana Farber patients over the years has only reinforced the correlation between financial well being and physical health.
In recognition of Mental Health Awareness Month, here’s an explanation of how health and wealth can often go hand-in-hand.
Avoidance of Problems
Money is the second most common source of stress amongst adults.2 Therefore, it makes sense that dealing with bills, debt and budgeting is stressful. If you’re already feeling unwell, avoiding additional stress is understandable.
The problem is, avoiding your financial obligations won’t make them go away. And in many cases, it can actually make them worse. The temptation to push aside bill paying or phone calls to the credit card company is strong, but tackling these tasks on time or right away can create long-term relief.
Feelings of Hopelessness
When your mental health is struggling, it can be hard to think long-term. If you feel as though you’re losing control of the things around you today, what’s the point in trying to work toward future goals? Feelings of hopelessness can occur, and they can make long-term financial decision-making really tough.
Going hand-in-hand with loss of control is the urge to spend. When everything else seems to be spiraling, making a purchase can feel like something you actually have control over. The problem is, of course, this can lead to impulse buying - which can wreak havoc on your budget and increase debt. And with a lack of focus on facing your financial situation head-on, this could create a harmful cycle of spending more than you have while neglecting to address the accruing debt.
If your mental health is suffering, you’ll notice your energy levels decreasing as well. Fatigue, trouble sleeping and lack of focus can all be common symptoms of declining mental health or stress. With what energy you do have, it’s likely you don’t want to spend it on your financial obligations. Hmm. Binge watch Netflix or work on my budget. But your financial wellbeing requires action and focus, especially if you are faced with a large amount of debt or a substantial long-term savings goal.
Hard to Think Clearly
When you’re not feeling your best, making sound, rational decisions can be challenging. Your judgment may be clouded by how you’re feeling right now, meaning it’s tough to try to think about your future - especially your financial future.
It’s likely the events of this past year have challenged your mental health in some way, and it’s okay to not always be okay. If you’ve found that your financial wellness may be suffering as a result of your mental health, reach out to your trusted Certified Financial Planner® practitioner. They can help keep your spending and saving on track today while encouraging healthy financial habits that keep your long-term goals a priority.
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In good health.
All the best.
Rick Fingerman, CFP®
Financial Planning Solutions, LLC (FPS) is a Registered Investment Advisor. Financial Planning Solutions, LLC (FPS) provides this blog for informational and educational purposes only. Nothing in this blog should be considered investment, tax, or legal advice. FPS only renders personalized advice to each client. Information herein includes opinions and source information that is believed to be reliable. However, such information may not be independently verified by FPS. Please see important disclosures link at the bottom of this page.