When I was growing up, I remember my parents encouraging me not to center my thoughts and goals around money. They warned me with the old adage, “money can’t buy happiness”.
As I became an adult and gained financial independence, I started to understand the truth is a little more nuanced than that. Money can’t exactly buy happiness… but it sure can help.
Additionally (and more urgently), having money means avoiding the mental health struggles that often come with financial challenges.
How financial stress impacts mental health
Studies show that people without adequate and stable financial resources are more prone to mental health challenges such as depression and anxiety. In severe instances, particularly situations involving insurmountable debt, financial stress increases the risk of suicide.
Economic challenges greatly impact a person’s autonomy and sense of mastery over their own life. This lack of control is detrimental to self-esteem and mental wellbeing.
Choices like picking up an extra job, moving out of the family neighborhood, and skipping indulgences for your children start to be made out of necessity, not desire. Those who receive public assistance or support from non-profit organizations are compelled to “follow the rules” in order to be eligible for help, losing the dignity of making the small everyday decisions in their lives that other people enjoy.
Long-term or lifelong financial stress is a chronic traumatic experience. Like other traumas, it can cause you to get stuck in the reactive modes of fight, flight, freeze, and collapse, limiting your mental and emotional flexibility.
A vicious cycle
Many of the ways that money impacts mental health are self-reinforcing. For example, if you are forced to spend virtually all your time earning money to try to make ends meet and solving financial crises, you don’t have the time or energy to grow in other areas of your life – there’s nothing left of you to spend on hobbies, relationships, or frivolities. Without those sources of joy, you are at even more risk of becoming depressed.
Constant hustling is also hard on the body – financial difficulties often cause you to sleep less, get less nutrition, and endure more physical strain. These physical stressors also impact mental health, as they can increase anxiety and other emotional difficulties.
Lacking financial resources carries a lot of stigma, and discrimination against people who are poor or low income is rampant in society. This can create social isolation and unfair loss of opportunity, adding on more mental and emotional stress.
Serious mental health crises that involve hospitalization or a period of time where you are unable to work can be very financially costly, due to medical bills and loss of income. Without adequate financial resources to cushion you, your recovery might stall or even be interrupted by relapse because you push yourself to go back to work too soon or get stressed out from being harassed by debt collectors.
Navigating money and mental health
The challenges that financial strain puts on mental health is ultimately a societal problem. Structural issues create artificial resource scarcity and allow only the privileged to gain and maintain true financial wealth.
But like my parents said, money can’t buy happiness – nor can it guarantee good mental health. Studies show that the effect of income on emotional wellness eventually plateaus, and past that point, more and more riches cease having an impact.
If you’ve been looking at your relationship with money or have been wondering why success and spending aren’t making you happy, therapy can guide you in digging deeper into those questions. Click the button below to set up a consultation, and we can chat more about your journey so far and how I might be able to help you go further.