Welcome to the Good Money Vibes podcast to help you feel good about money. My name is Emilie. I’m a Money Confidence Coach and financial expert, and it’s my job to help you feel like you’re on top of things like you’re in control, and that you can achieve your financial goals. This week, I mean, it’s the third episode of the podcast, and I feel like I can’t go any further into talking about money without addressing a very important part of money, which is the effect that mental health has on our finances and in turn the effect our finances have on our mental health. In this episode, I am going to be utilising data and research done by the Money and Mental Health Organisation, which is a charity funded or started by Martin Lewis, we all know as the king of money saving. So, some of these statistics might seem a bit dramatic, but it’s so important to address mental health and the effects on money and vice versa because we have to allow ourselves kindness. A lot of people nowadays suffer from some sort of mental health condition. I suffer from anxiety and depression, and currently in a pretty, pretty bad period, but we’re okay, so I just thought I didn’t want to continue talking about money, continue talking about bringing in more money, managing our money without kind of addressing this first.
My personal experience with mental health is like I said, I have anxiety and depression, I was only diagnosed in, I want to say 2020, 2021, I think. I’m pretty sure it was 2021, in the summer when I kind of realised that I was imagining like the worst thing possible but like all the time, like I would, I lived in like a top floor flat with really steep, curved stairs, like I mean anyone that went to my flat test that they were terrifying, but since moving into that flat, which was a massive trigger for my anxiety, I just imagined myself falling down them all the time or not just me, but like my partner as well, like I would imagine him falling down them and like breaking an arm or like you know landing on his neck and like this, this is the sort of thing my brain just constantly did, like I would walk down the road and think that a lorry was going to like mount the curb and hit me or I would like trip off the side of the road and get hit by a bus, like it was, yeah, anyway, that caused me to get diagnosed with anxiety, actually the, the trigger point for me contacting the GP was actually low mood and then I was like oh by the way I also have these really weird thoughts and they were like yeah okay.
I’ve been managing well up until recently, where just things have gone to pot again, but more so from, I’m not having like the irrational thoughts anymore, just everything feels very very overwhelming and I just, yeah, so I’ve recently had an increase of my meds so I just, yeah, I, I don’t know why I’m sharing this, it’s mostly to be like look not only am I coming at this from like a financial expert, a money point of view, but also from the point of view of someone that does suffer with mental health issues and understands how that affects your ability to like live day-to-day life, like obviously my condition isn’t that bad like I can still function day-to-day just about, but to some people, it can, it can be, um, like immobilising and affect their day-to-day living.
Money has a massive part to play in all of this, and if you’re watching the video recording of this podcast, hi, but also I just want to apologise in advance because where I am referring to studies because I want to make sure that my like data is correct, um, I will not be looking at the camera, I will be kind of looking this, there, and everywhere, and doing stuff on my computer, just because I want to make sure that I get everything right, and I don’t want to like, I want to turn any lies.
The research that I’m going to be talking about, has been done by the Money and Mental Health Policy Institute, again this is a charity that was set up by Martin Lewis, and there was a study, this is back in June 2016, 16, of 5,000, around 5,500 people, on the effects of mental health and money, and vice versa. So, money and mental health are intrinsically linked, mental health problems make it harder to manage your finances, and living with financial stress can harm your mental health. The report I am going to be referencing sets out a detailed analysis of how and why this happens, based on the experience of nearly 5,500 people who have lived with mental health problems.
So, to kind of summarise the study with some data, is that 86% of respondents said that their financial situation had made their mental health problems worse, and 72% of respondents said that their mental health problems had made their financial situation worse. So, you can kind of see how sometimes it can be a bit of a cycle. More than half of the sample had fallen behind with bills in the last year, and when asked to explain the main reasons, mental health problems were 67, 67% of responses, after that, difficulties managing money 60%, living on a low-income 55%, job loss or drop in wages or benefits of 36%.
So, what can we do, what is the issue? So, what happens when we have poor mental health, typically we can see that there are altered financial behaviours during those periods of poor mental health. A very high proportion of respondents reported changes in their spending patterns and ability to make financial decisions during periods of poor mental health. Respondents said that during periods of poor mental health, they had spent more than usual, found it harder to make financial decisions, put off paying bills, avoided dealing with creditors, and taken out a loan that they wouldn’t otherwise have taken out. In line with the criteria of the Mental Capacity Act 2005, respondents were asked to consider how their mental health problems had affected their decision-making in credit applications that they had made in the last 12 months. 24% of people said that they were unable to understand the terms and conditions, 38% said they were unable to remember what they had been told about the loan, and 48% said they were unable to weigh up the advantages and disadvantages of the loan, and 34% said they were unable to communicate their decision, ask questions, or discuss the loan with the organisation that they had applied to. These findings demonstrate that mental capacity at the time of applying for credit is a significant issue and one that needs further exploration.
Financial difficulties can lead directly to mental distress, many of those in financial difficulty report anxiety, worry, and depression directly attributed to their financial position. Insomnia and suicidal ideation are also prevalent. There are also indirect causes of mental distress, demands on our time or mental energy, creditor action, social, and financial exclusion from activities and support networks, going without essentials, and relationship difficulties. Respondents described that, alongside unmanageable debt, a wide variety of financial difficulties were experienced, including running down their life savings, being dependent on others, becoming financially excluded, and relationship difficulties. Mental health problems were described as contributing to relationship breakdowns by some respondents, resulting in income shock or of some kind.
Two pathways from mental health problems into debt that relate to income were identified, persistent low income due to an un or underemployment, and income shocks as a result of mental health crisis or relationship breakdown. Some respondents explained that their mental health problems had triggered or been triggered by physical health conditions like disabilities, leading to loss or further loss of income and or higher costs. Respondents noted side effects of treatments affecting men’s physical health and cognitive capacity, thus leading to employment loss or financial mismanagement. And many respondents said that their mental health problems had impaired their cognitive function, making it harder for them to manage their finances. This included problems with budgeting, paperwork, judgment, memory, and timekeeping. Many respondents describe themselves as in a state of denial, phobic about their finances, or disengaging completely from contact with creditors or the financial situation.
And one of the most important parts that I want to talk about, and that I want to bring to your attention, so that you can give yourself some kind of I guess forgiveness, if you suffer from mental health issues and have struggled to manage your finances either presently or in the past, is highest spending. Seven different drivers for increased spending, six of them psychological or cognitive, were identified in this study. So, that’s manic spending, spending during a high or a period of mania, nihilistic spending, where the transaction or life itself is considered meaningless, comfort spending, to boost low mood, social value spending, to boost status or self-worth, or by giving money or gifts to others, impulsive spending, where respondents couldn’t recollect or attribute purpose to the transaction, and addictive spending, to feed an addiction. In addition, some people reported that they had spent because of higher costs, and another group reported restricting their expenditure beyond what they would consider rational, as a result of anxiety.
I just want to make a point there that it can go either way, some people with mental health problems can overspend, and some people can underspend for the need to have some numbers in the bank account, and that would usually be anxiety-driven. The link between mental health problems and financial difficulties has been widely acknowledged for many years and is well documented in academic literature. Living with mental health problems can lead people to financial difficulty, and it is equally clear that living under financial stress can trigger episodes of poor mental health, and these are things that we already know. One in two adults with a debt problem has a mental health problem, and one in four adults with a mental health problem has problem debt. Debt problems increase the chances of poor mental health, people with debt problems are twice as likely to develop major depression. The more debt a person has, the more likely they will have a mental health problem. Debt can make recovering from a mental health problem harder, people with depression and problem debt are four times more likely to still be depressed when contacted 18 months later, compared to those with depression but no problem debt. Mental health problems can make financial recovery harder, due to their association with subsequent unemployment, reduced hours, salary, benefit reduction or delays, hospital admission, or side effects from medication, or people becoming anxious or unwell when contacted by creditors or finding it difficult to communicate with debt collection or debt advice staff. Finally, a relationship exists between debt and suicide, poor physical health, fuel poverty, and alcohol and drug dependence.
I’ve said quite a lot, and I’ve read quite a lot from that study, so I think I should take some time to summarise. So, in summary, mental health can affect the way that you deal with money. If you’re feeling low or depressed, you may lack motivation to manage your finances, and it might not even feel worth trying to do so, or spending might give you a brief high, so you might overspend to feel better. You might make impulsive financial decisions when you’re experiencing mania or hyper-mania, and if your mental health affects your ability to work or study, this might reduce your income. Additionally, you might avoid doing things to stay on top of your money, like opening bills or checking your bank account, you might try to avoid thinking about money completely. And having a mental health problem might even affect your insurance, and you can end up paying more.
And from the other side, money problems can affect your mental health. Certain situations might trigger feelings of anxiety and panic, like opening envelopes or attending benefit assessments. Worrying about money can lead to sleep problems, you might not be able to afford the things that you need to stay well, including housing, food, water, heating, or treatments like medication or therapy. And money problems can affect your social life and relationships, you might feel lonely or isolated, or like you can’t afford to do the things you want to.
This also ties into kind of what I talk about a lot, which is our emotions and our feelings associated with money. I’ve spoken in previous episodes, I know this is only episode three, so in the last two episodes, I’ve spoken about how emotions and money are so intrinsically linked, and how almost every financial decision has some sort of feeling behind it. And I always talk about when starting any kind of financial journey, or trying to get on top of your finances, to look into doing a financial journal, and that is journaling on your thoughts and feelings around money. So, here are some examples, kind of from a negative point of view unfortunately, again because this is how it can affect your mental health, of how money and feelings are so deeply powerful. You might feel guilty for spending money, even if you know you can afford it, or you might feel guilty for seeking support, even if you know you need it. You might be afraid of looking at your bank balance or speaking to your bank, you might feel ashamed for needing support, you might feel stressed, and you might feel tired or worn down.
It’s important to understand your money and mood patterns. So, again, this is going back into financial journaling. So, it’s helpful to take some time to think about the way you think, and feel about money, and why. For example, if you struggled with money in the past, or didn’t have much money growing up, this might affect the way you feel about money today. So, there are some questions that you can try answering, you can press pause, write them down, or I will include them in the show notes as well. So, are there certain times when you’re more likely to spend money? On the flip side, are there certain times when you’re more likely to save money? How does it feel when you spend money? Do you feel differently when you’re spending and saving? What are the emotions and feelings you think of when you think about money? And which aspects of dealing with money make your mental health worse?
As I said, it’s a really good idea to journal your thoughts and feelings about money. I recommend at least a week, if not a month, um, and if not longer. It’ll help you not only get a better understanding of your triggers around money, but also get, help you get more intentional, start to notice and recognise the patterns and understand when you might be feeling a certain way, you might spend in a certain way, and you can start to understand the connection potentially between your mental health and how you utilise money.
I want you to know that if you ever do feel like you’re struggling with your finances, you feel that maybe your mental health is getting bad, and it is having an effect on your finances, or your finances are having an effect on your mental health, like, there is free advice and help out there. Firstly, if you feel like your mental health is suffering, then please, please go speak to your GP, there’s potential for a referral to talking therapies, there’s medication, there’s, there’s all sorts of help that they might be able to signpost you to. There are also organisations such as Money Helper and National Deadline, and there are charities such as StepChange or Christians Against Poverty. There are lots of different places that you can go to get help, they’ll either signpost you somewhere, or they might be able to offer you with more kind of one-on-one help. I know that StepChange is good for those who are in debt, they can help you kind of build a debt management plan and understand how to best pay off your debt and get on top of things again. I am always more than welcome, more, more than welcome, more than happy to help, if you’re struggling, please do just be open and honest, like in my DMs, that you’re struggling, and we can have a chat. I am not a counsellor or therapist, but what I can do is kind of look at your financial situation from an outsider’s point of view and help you maybe get control, or signpost you to places where you can get more help.
What I want your main takeaway from this episode to be is to be kind to yourself. I want you to recognise that finances and mental health, how we feel, it’s so linked, like, the link is undeniable, so I want you to go away and when you’re having a, a bad day, or having a bad time financially, I want you to be aware of that fact, because I think most of being able to stay on top of things is being able to have awareness of these issues. After all, if you’re aware of them, you can identify the issues when they come up, and hopefully prevent getting stuck into any kind of cycle, or prevent kind of making financial mistakes because of where your mental health is at.
I also want you to be forgiving of past mistakes, and where you are currently financially, if you’re not, not currently where you want to be, you can see that that’s maybe because of decisions you made in the past when your mental health wasn’t great, I want you to for, I want you to forgive and forget, that it’s fine, it happened, it’s gone, there’s no point dwelling on the past. What we can do is learn from those experiences, we can learn from the fact that okay when I was going through this episode, this feeling, where you know, this thing happened in my life, this is how it manifested with my finances, maybe I got into lots of debt, maybe I utilised savings that weren’t meant for that purpose, like, it is fine.
I also want to talk to those who might be coming at this from an anxiety point of view, where maybe there’s a lot of feeling of anxiety around spending any money. I want again, you to be kind to yourself, I want you to recognise what you need as an absolute bare minimum to survive, add on what you need to be happy, and make sure that you are spending money on your happiness if you can afford to, or want you to be able to spend things, spend money on the things that bring you joy.
This episode isn’t, I don’t know, I like kind of being quite happy most of the time, but I did think it was really important to do an episode like this, to talk about the connection between them, you know, mental health and your finances, because I want you to realise, going like, this is, this is real life, money, like, this is just how our brains work, and it is fine, it’s fine that you know, life happens, okay. My job is, is to help you get back on track, to help you get in control, help you recognise where these stumbling blocks are, and help you build other coping mechanisms, but also to make sure that your financial goals are so exciting that you can’t help but achieve them. So, next week we’ll talk about something a lot more jollier, I promise, um, if you listened then amazing, I hope you gained something from this, hope you’re able to be kind to yourself today, and do let me know on in Instagram or wherever, email, like if you listened, what resonated with you, if anything, and please do let me know if there’s anything you want me to talk about. This podcast is here for you, this is free content for you to consume to improve your financial situation, improve your money mindset, and just improve your life in general, so please do let me know if you want me to cover anything. I love talking about money, I can talk about money all day so yeah, I will speak soon, I promise next time we’ll do something jolly, I tried to dress the part if you’re watching the video you can see I’m wearing a very colourful t-shirt, I tried to just the part to make this a little bit happier, but yeah, thank you for being here, thank you for listening, and I will be to you all soon.
0 Comments