Countless studies suggest that there is a link between our mental health and financial life.
- United Kingdom-based non-profit Mental Health Foundation reports that some mental health problems like dementia can make it hard, if not downright impossible, for people to make sound decisions about their money. If we’re not in the right headspace, we might make decisions that are detrimental to our financial life.
- A study from the Royal College of Psychiatrists also found that half of the adult respondents who have an unmanageable debt problem are also struggling with poor mental health.
- One of the symptoms of bipolar disorder is the compulsive urge to spend money, so people who have been diagnosed with this condition must be made aware of their compulsions, so they can have safeguards in place.
Our financial life can greatly affect our mental health, and vice versa. Here are some pointers for improving and protecting one’s finances if one is struggling with their mental health.
Explore every resource available to you
While no government is perfect in its approach to helping people who are struggling, there are still some resources that are available to us, especially if our condition is hindering us from keeping a job or a steady income. One thing you can explore is disability claims, which can provide you with just enough money to help lift your financial burdens. Those with mental health disorders qualify for benefits, especially when it disrupts their day-to-day performance and ability to function, so do not hesitate to explore this available option.
Assess your current situation
If your diagnosis is fairly recent and you are only just now seeing the connection between your mental health and financial life, now is the time to sit down and assess your current financial situation. Here are some things you can do:
- Check your digital receipts to see where your money goes every month, and categorize your spending according to needs and wants.
- Make a spreadsheet of your monthly essential and non-essential expenses, and identify which monthly payments you can let go of. This includes streaming subscriptions and other in-app purchases.
Establish a new budget in light of your current knowledge
Now that you’re more aware of your mental health condition and how it influences your spending habits, now is the time to establish a new budget or spending plan in light of your tendencies and new routines. Here are some ways to create a budget that helps facilitate your healing:
- Set aside an exact amount for your food, rent, utilities, and other essential monthly expenses. Consider opting for auto payments for these necessities so that you can ensure that your paycheck or income goes directly to these essential expenses.
- If it’s possible, consider saving 1/3 of your monthly income. You need to have enough money saved for a rainy day, especially if you’re struggling with your mental health.
- Invest in a budget diary or an app that will help you keep track of your finances. Many of these apps also include a free version that has all the basic features like syncing your bank accounts and credit cards, customizable spending categories, and transparency about their security features. These apps also have auto-updates, so if you are someone who has a hard time doing these things manually, an app might be your best bet.
Set boundaries with your spending
Another thing you need to do to protect your finances while struggling with your mental health is to set boundaries with your spending. Here are some practical steps you can take to minimize your spending during this difficult time:
- Place a daily or monthly spending limit on yourself. This means restricting how much you can withdraw or pay online at a given time.
- Consider enlisting the help of someone you can trust. If you find that you’re still able to manage and you don’t necessarily need financial guardianship, then having a close friend or family member who can help keep you accountable might be a big help. You don’t necessarily have to hand over control, but they can also help provide you with structure and keep you disciplined in terms of keeping track of your spending.
Having mental health struggles can make daily tasks seem like an impenetrable wall and even neurotypical people have a hard time keeping their financial life healthy. But with the right boundaries, safeguards, and resources, it’s possible for people who have a mental health condition to keep their finances in order. You are not alone; don’t be afraid to reach out to people who love you.
