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5 Practical Tips for Financial Health and Mental Wellbeing

Family and Social

Boost financial health and mental wellbeing with 5 practical tips. Learn how to manage your financial and mental health to build a plan for better money habits.

Financial stress is on the rise in Australia, and it’s leading to an increase in anxiety, depression, and other mental health challenges.

Join us as we explore practical tips and strategies to help you improve your financial health and mental wellbeing. Whether you’re dealing with debt, struggling to make ends meet, or just want to manage your money better, we want to help you find the information you need.

Understanding the Link Between Financial Stress and Mental Health

How does financial stress impact your mental wellbeing?

Financial stress is more than just being worried about money. With the pressures of the rising cost of living, increased daily expenses, and unexpected financial emergencies, this stress can have long-lasting effects on your mental health.

When you’re experiencing financial stress, you’re twice as likely to experience mental health challenges. This can make it difficult to focus, make decisions, and maintain healthy relationships. While it affects your mental wellbeing, it can also bring on physical symptoms like headaches, sleep disturbances, and high blood pressure.

The relationship between money management and mental health is a two-way street. Financial stress can impact your wellbeing, just as existing mental health conditions can affect your financial stability.

Examples of common financial issues could include:

  • Living week to week

  • Struggling with debt

  • Experiencing job loss or a reduced income

  • Unexpected expenses such as medical emergencies or home repairs

Financial issues can arise for various reasons, including economic downturns, personal crises, living beyond your means, a lack of budgeting, and rising living costs.

The Effects of Financial Stress on Mental Health

Money plays a serious role in mental health, as financial stressors can make the symptoms of depression and anxiety worse. The constant worry about money can create a never-ending cycle of anxiety and hopelessness, making managing everyday life harder.

A common question is: Can financial stress cause depression? Yes, it can contribute to the development or worsening of depression. When you’ve got ongoing financial difficulties with money management, such as struggling to pay bills or dealing with job loss, it can take a toll on your mental wellbeing.

Money anxiety disorder can also be brought on by financial stress. When you’re in a constant state of anxiety, it not only affects your daily life but can also bring on feelings of financial shame. Financial shame can be isolating as we become embarrassed about our debt, lack of control over money, and comparing ourselves to others.

5 Tips for Living with Better Financial and Mental Health

Financial challenges, including debt, and mental health issues often go hand in hand. According to statistics from HILDA data, 14% of Australian adults experienced both financial hardship and mental health symptoms at some point between 2014 and 2019. The good news is that there are resources out there for you if you are struggling.

Let’s also look at some simple ways you can improve your financial health and wellbeing.

Tip 1: Create a Budget

Creating a budget is the first step towards taking control of your finances. A clear budget helps you see where your money is going and where you can make changes.

You can learn more about creating a budget in our article here.

Having a budget reduces financial stress because you know exactly where your money is going. It gives you more control and confidence to manage your finances better. Plus, it can help you set aside money for savings and emergencies, adding an extra layer of financial security.

A budget isn’t just about restricting spending; it’s about making your money work for you. It empowers you to make informed decisions, reduces financial stress, and promotes better mental health.

Tip 2: Build an Emergency Fund

Building an emergency fund is an important step for financial stability and peace of mind.

Start small. Aim to save a small amount regularly, even if it’s just a few dollars a week. Over time, these small contributions will add up. Set a goal to save at least three to six months’ worth of living expenses. This may sound a lot, but remember, it’s about progress, not perfection.

To make saving easier, open a separate savings account specifically for your emergency fund.

Automate your savings if possible. Set up a direct transfer from your regular account to your emergency fund each payday.

An emergency fund provides a safety net, giving you the confidence to handle unexpected situations without stress. Knowing you have money set aside can reduce anxiety, allowing you to focus on other aspects of your life.

Tip 3: Avoid Unnecessary Debt

Dealing with debt can be incredibly stressful, especially when you’re also managing mental health issues.

With the rapid rise of buy now, pay later and salary in advance options, it has become all too easy to fall into the trap of overspending and the promise of ‘easy money’. These options are also unregulated, which means the risks to you can be higher due to the lack of official standards and protections. Short-term financing can quickly spiral out of control, often resulting in high interest rates and a cycle of never-ending debt.

Be mindful of your spending. It’s easy to tap a credit card without thinking, but it’s those small purchases that can quickly add up. Ask yourself if each purchase is necessary. Can you afford it without borrowing? If not, perhaps it’s better to wait.

Living within your means. This might mean adjusting your lifestyle and spending habits but knowing you can be debt-free is worth it.

Tip 4: Seek Professional Advice

When you’re struggling with personal finance, remember that it’s okay to ask for help.

Recognising the symptoms of your mental health and financial stress early on can help you seek support and resources. The National Debt Helpline and Financial Counselling Australia both offer valuable support and guidance for financial support for mental health.

Are you experiencing financial hardship?

Perhaps you’re struggling to pay for basics like housing, food, and bills.

If you’re in this situation, know that you’re not alone. Many low-income families, single parents, and people with a lot of debt go through this too. Especially if you’ve lost a job, faced unexpected medical bills, or just aren’t earning enough.

Tip 5: Take Care of Your Mental Health

Prioritising your mental wellbeing is a step in the right direction for looking after your financial health.

Practising self-care in the forms of exercise, meditation, and spending time with loved ones is a great way to reduce stress and improve your mood.

Focus on being present and appreciating the things you have, rather than dwelling on what you don’t.

By practising mindfulness, challenging negative beliefs, setting boundaries, and focusing on values, you can have a positive effect on any obsessions with money and your mental health.

If you find yourself asking, ‘How to stop being depressed about money?’ consider taking steps to regain a sense of control. Reframing your thoughts about money, focusing on gratitude for what you have, and seeking support from trusted friends, family, and professionals can be helpful.

Debt and Mental Health: Breaking Free from the Cycle

Managing money and mental health can be worrying. But it’s important to remember that you’re not alone.

At Fair Go Finance, we understand the complexities of these challenges, and we’re with you on this journey.

Let’s break free from the cycle together.

The content provided in this article is intended for general informational purposes only. It is not intended to serve as medical, financial, or professional advice. The tips and advice shared are based on general knowledge and are not tailored to the specific circumstances of any individual reader. Always seek professional advice with any questions you may have regarding your health, mental wellbeing, or financial situation.