How Financial Planning and Mental Health Are Linked

There are many reasons why financial planning and wellbeing are linked. The impact of physical illness is clear as it can mean the individual is physically unable to work or care for themselves.

But what about mental illness? Given that one in four of us will suffer from a mental illness at some point in our lives, the link between mental wellbeing and financial health needs to be discussed.

Most people don’t find it easy to talk about their mental health and it is estimated that around two thirds of people with a mental health condition are not seeking treatment. This is worsened by the fact that those with mental health difficulties often still face doubt, discrimination and blame for their problems.

Those with money concerns face many of the same issues, so it is no surprise that financial planning and mental health are interlinked.

How Your Finances Can Affect Your Mental Health

Financial stress can be a major contributor to mental health problems. For example:

Worrying about debt or running out of money.

Money worries can impact on self-esteem.

Having to stay in a toxic workplace because you need the money.

Remaining in a difficult or abusive relationship due to financial dependence.

Being unable to take time off work even if you really need to.

Avoiding socialising and becoming more isolated.

The stress of dealing with banks, debt collectors and the benefits system.

Being unable to make beneficial lifestyle changes due to a lack of time or resources.

All of these factors can be stressful at the best of times. They can be devastating for someone already struggling.

How Your Mental Health Can Impact Your Finances

The relationship between finances and mental wellbeing is cyclical. Those having difficulties with their mental health often find there are financial consequences. For example:

Not opening bills or dealing with issues as they arise. This can lead to further anxiety and worsen the problem.

Compulsive overspending as a distraction or comfort.

Feeling unable to cope with financial matters and letting things spiral out of control.

All of these factors can be stressful at the best of times. They can be devastating for someone already struggling.

How Financial Planning Can Help

While financial planning doesn’t have all the answers, it can help you take control of your life and address some of your anxieties.

Talking Things Through

The process of creating a financial plan involves a great deal of discussion about our clients’ lives, families, jobs, and their aspirations for the future. We learn to understand what they value most and what they fear losing. We aim to bring clarity and peace of mind into what can sometimes be a complex financial situation.

Simply talking about your problems and worries can be extremely beneficial. A good financial planner is always ready to listen, but it’s also worth discussing any problems you have with your friends or family. You never know, they may be facing similar issues, or even better, have overcome them, and can share their knowledge.

Planning for the Worst

When you think about money, what is the worst thing that you envision happening? Bereavement, ill-health and redundancy can all have a catastrophic impact, both personally and financially.

Contingency planning is a vital part of financial planning. For example:

Everyone should have an emergency fund. Even if you can only save a small amount each month, or if you need to sell some of your belongings, it is worth trying to build up a nest egg. This can give you one less thing to worry about if something unexpected does happen.
Financial protection is also important. This can pay out a lump sum or income in the event of death, serious illness or long-term ill-health. While it cannot compensate for the loss of a loved one or a devastating life change, it can help to make things a little easier at a very difficult time.

Setting Goals

Thinking about the life you would like to have in the future can be an excellent incentive to improve your financial situation. Without a clear goal, it is easy to lose your way.

Start with small, easily achievable goals that you can attain in a matter of months. They do not even need to involve money. Learning a new skill or trying a hobby for the first time can be just as beneficial for your mental health. Over time, you will build on your self-esteem and can start to envision the longer term future.

Eventually, the goals that once seemed insurmountable (like planning for retirement) will look much more realistic.

Clearing Debt

Remember, clearing debt is not a goal, it is a means to an end. Debt may have allowed you to buy a house or a car, or simply to keep your family fed for a month. Whether the money was used for pleasure or necessities, it is not shameful to be in debt and it should not be stigmatised.

Create a realistic plan to clear your debt (there is help available for this – see the links below), treat it as a regular bill and forget about it.

Where to Find Help

Below are some links to organisations who may be able to help:

Citizens Advice

MoneyHelper

Help with Benefits:

Help with Debt:

Emotional Support:

The best investment you can make in your financial future is yourself. Taking care of your health, both physical and mental, is the first step towards achieving your goals.

Please don’t hesitate to contact a member of the team if you would like to find out more.

Source – www.clientplus.co.uk - Client+ is a monthly client content service and exclusive online content library by the team at CreativeAdviser.

Speak to a member of our team on 020 7388 7000

Please don’t hesitate to contact a member of the team to find out more about financial planning.

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How Financial Planning and Mental Health Are Linked

How Your Finances Can Affect Your Mental Health

How Your Mental Health Can Impact Your Finances

How Financial Planning Can Help

Where to Find Help

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