Achieving Financial Wellness – the Connection Between Money Management and Mental Health

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Connection Between Money Management and Mental Health

This post was developed via a partnership with BetterHelp.

It should come as no surprise that stressful situations trigger our fight-or-flight response, which often can cause us to overreact to modern sources of stress. And it should also come as no surprise that managing money is one of humankind’s most stressful activities. So it stands to reason that getting to a healthy relationship with money is one of the most important things we can do to support our own mental health and overall well-being. If reaching financial wellness is of interest to you, you’ve come to the right place. We’ll look at some of the small steps you can take toward developing an approach to managing money that supports good habits and good mental health.

The Link Between Financial Health and Mental Health

It’s impossible to deny that financial health and mental health are closely linked. In fact, according to the Money and Mental Health Policy Institute, 86 percent of nearly 5,500 survey respondents who had experienced a mental health issue reported that their financial situation made their mental health conditions more intense. In addition, 72 percent of respondents to the same survey reported that the reverse was true – the mental health issues they experienced made their financial situation worse.

If you really think about it, this makes a lot of sense. The stress in our lives sometimes can cause us to take unreasonable actions – it weakens our judgment and lowers inhibitions. Sometimes in a state of stress, we make financial decisions that are detrimental to our bottom line. And when our bottom line suffers, our sense of stress rises. It’s a vicious cycle. That’s why self-care is so important, and not just for your mental health. It’s also good for your financial health. When we take care of ourselves and keep our mental health in a state of equilibrium, we’re more likely to make financial decisions that are more sound and in our own best interests. Here are some tips to help you figure out how to reduce the financial stress in your life.

Automate Everything You Can

One of the smartest things you can do to reduce financial stress is to pay your bills automatically. Set up regular payments to be drafted from your checking account on a monthly or bi-weekly basis – that way, you won’t have to worry about remembering to schedule everything each month, and you can rest easy knowing that your bills will be paid on time since you don’t have to depend on your memory for which bills are due when. You can also automate withdrawals to a savings, retirement or other investment account so that you make sure your savings continue to grow. 

Start an Emergency Fund

When you think, “emergency fund,” you might think of a large safety net – which is great if you can make it happen. But even setting aside small amounts of money on a regular basis adds up over time, and it can help you feel more empowered when it comes to taking control of your money. Even a small savings account can help you replace a broken appliance or make a minor repair to your car. And not only will your savings grow over time, but you also can make larger savings deposits as your finances continue to improve.

Budget and Plan

Many people cringe at the idea of a budget, and although the thought can be stressful, it’s also empowering to find out exactly where your money is going. In addition, the act of creating a budget may help you identify the source(s) of your financial stress. Today, you can find a wide range of budget tracking software and budget tracking apps that do a lot of the heavy lifting for you, but seeing where your money is headed can help you course-correct where necessary and tweak changes to your financial lifestyle based on information rather than fear. Ultimately, how you spend your money should reflect your values, and seeing all of your income and expenses clearly organized and expressed can help you ensure that this is actually happening for you.

Participate in Talk Therapy

Talk therapy, including mobile options like BetterHelp online therapy, is one of the best tools in your toolbox for dealing with the stress of your life, including your financial stress. And while a qualified counselor isn’t necessarily a financial advisor, they may offer valuable perspective that helps you process your feelings around money. In addition, a qualified therapist may be able to help you improve your money communication style so that you and your partner – or anyone else you share financial decisions with – can be in alignment around goals and expected behaviors.

Connect with a Financial Professional

A financial professional can help you establish healthier habits around managing your money. For example, a financial professional could help you establish a monthly budget, make investment decisions, set financial goals and also help hold you accountable for meeting those goals. Financial professionals are trained to help their clients make sound financial decisions that are in their best interests over the long term.

Conclusion

Financial health and mental health often go hand in hand – you can’t really have one without the other. Overall, it benefits you to make the investment in both your mental and financial health, which supports your total sense of well-being. And remember – you don’t have to do this alone. With a professional perspective, you can tackle some of the approaches presented here and take meaningful steps toward improving both your financial and your mental health.

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