Mental health is a hot topic in today’s culture. From hearing about it in the news to our Twitter feeds, it seems there is no longer such a stigma attached to being open about struggles. Perhaps this means that it’s also a good time to talk about how mental health ties into other areas of our lives, such as finance. What is the relationship between mental health and money? The answer may lie in the way we handle financial stress.
The connection between financial stress and mental health
A U.K. study showed that 46% of people in what they call “problem debt” also have a mental health problem, and those with mental health problems are 3.5 times more likely to be in problem debt than those without mental health problems. Did the debt cause the stress? Or was it the other way around?
While it’s hard to present hard data on how the two are related, one can definitely influence the other. Some have explained it more like a chicken-and-egg situation, where it’s difficult to determine which one started first.
It’s likely that having some mental health obstacles could lead to poor money-making decisions. There is even a term for compulsive shopping called buying-shopping disorder or BSD. Psychologists have learned more about BSD since online shopping has made it easier for people to buy things they don’t need — usually in an effort to ease symptoms of mental health disorders. This condition alone shows that mental health challenges can lead to debt and financial insecurity.
It goes further, however. Not making enough money to feel secure and accumulating debt are both reasons for people to feel stressed. While this stress can be normal (not all stress is bad), it can be too much to some.
Reducing stress can help
Tackling specific causes of financial stress can help you to reduce some controllable stress and bring more balance to your life. Here are some things you can do now to get started:
Pay your bills on time
Schedule your bills to be handled well before the due date, or sign up for automatic payments. Not having to worry about bill deadlines or late fees is important and can save you money in the long run. It can also help when it comes time to ask for a credit card rate reduction or loan refinancing, since your credit score is influenced greatly by your history of on-time payments. With a higher credit score, more affordable credit opportunities will become available.
Join a personal finance support group
Whether you meet with a money coach or pop into a free online seminar, you may find some much-needed perspective on the ways you can handle money better. There’s also another way to get help. Personal finance support groups come in all forms, from community meet-ups at a local church or nonprofit to online-only Facebook groups that allow people to share their wins and challenges from the previous week. If you can, asking someone who is successful with their money to be your accountability partner may also provide you with the added support you need.
Set a budget
Another way to feel better about your money situation is to track where it is going. For example, simply knowing how much you spend on recurring monthly subscriptions can empower you to make changes. Sign up1 for a Western Union® Netspend® Prepaid Mastercard to start saving through the Optional Savings Account2! Making a budget based on your past spending and future goals can be incredibly effective for creating a positive, new money mindset.
Put aside an emergency fund
Many people experience stress simply from worrying about what they will do if something bad happens. While we can’t control the future, we can make plans for affording the unknown. By simply putting away $50 or more a month (the cost of a nice dinner out for two), you’ll have some cushion saved for an unexpected car repair or medical bill.
Positive change is possible
Finally, it can be hard to know if your stress is normal or at levels that may need some extra help. If you’re unsure how much stress is “too much” stress, seek out the advice of an expert. While there are mental health care providers with expertise in many areas (such as finance), any licensed professional should be able to help you assess your next steps and provide you with tools to help you reduce stress and get back on track.
In the meantime, you can continually check in on your budget, set goals, and assess how your attitude toward money is becoming healthier. You have the power to reduce your own stress. Are you ready to get started?
1 IMPORTANT INFORMATION FOR OPENING A CARD ACCOUNT: To help the federal government fight the funding of terrorism and money laundering activities, the USA PATRIOT Act requires us to obtain, verify, and record information that identifies each person who opens a Card Account. WHAT THIS MEANS FOR YOU: When you open a Card Account, we will ask for your name, address, date of birth, and your government ID number. We may also ask to see your driver’s license or other identifying information. Card activation and identity verification required before you can use the Card Account. If your identity is partially verified, full use of the Card Account will be restricted, but you may be able to use the Card for in-store purchase transactions. Restrictions include: no ATM withdrawals, international transactions, account-to-account transfers and additional loads. Use of Card Account also subject to fraud prevention restrictions at any time, with or without notice. Residents of Vermont are ineligible to open a Card Account.
2 The Optional Savings Account is made available to Cardholders through MetaBank®; Member FDIC. To participate in the Savings Account program, Cardholder must consent to and continue receiving communications from us in electronic form. If Cardholder is subject to Internal Revenue Service backup withholding at the time of the request to open a Savings Account, the request will be declined. Interest is calculated on the Average Daily Balance(s) of the Savings Account and is paid quarterly.
If the Average Daily Balance is $1,000.00 or less, the interest rate paid on the entire balance will be 4.91% with an Annual Percentage Yield (APY) of 5.00%.
If the Average Daily Balance is more than $1,000.00, the interest rate paid on the portion of the Average Daily Balance which exceeds $1,000.00 will be 0.49% with an APY of 0.50%, and the interest paid on the portion of the Average Daily Balance which is $1,000.00 or less will be 4.91%. The APY for this tier will range from 5.00% to 0.54%, depending on the balance in the account.
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