How Financial Struggles Can Affect Your Mental Well-Being: 4 Tips to Cope

28 Sep ‘22
7 min
Stress and anxiety
Arianna Freni
Reviewed by psychologist Madelief Falkmann
financial struggles
It might come as a surprise, but mental well-being issues and financial struggles are frequently intertwined. While most of us stress about money from time to time, financial tension can become a concern if it disrupts our everyday life and affects our overall well-being.  


Sorting out money issues might feel like an overwhelming task, but the sooner you begin to think about it and take action, the easier it will be to regain control of your life. 


The link between financial struggles & mental well-being issues 


According to Forbes, financial wellness is essential to our overall well-being and peace of mind. If you’re experiencing difficulties, understanding the link between financial struggles and mental well-being issues might be helpful.


 “You can see our cognitive resources as a battery filled with energy specifically there for cognitive usage”, explains psychologist Paul Hessels. “However, like every other battery, the energy is limited and needs recharging. People who are stressed often have less energy to use. And the more financial struggles they have, the less time and space they have to do the things needed to recharge that battery. This will make it even more difficult to work on their issues and creates a vicious cycle”.  


Financial stress is a form of emotional discomfort that is closely related to money. It can result from a low income that does not allow you to meet your needs or support yourself. When your financial stress becomes (more) intense, you might experience negative consequences on your mental and physical health. 


From financial difficulties to stress and anxiety…


Financial difficulties are a common cause of stress and anxiety. This is a natural response when you are not able to afford the things you really need in your life, including housing, food, heating, or treatments such as medication or therapy. Money problems can also affect social life and relationships. You might feel lonely, ashamed, or guilty for needing support. 


When our viability feels endangered, our brain is wired to get into ‘action mode’ to preserve our well-being. Back in the day, this was great. This alertness prepared our bodies to fight or flee (for example, running away from a bear) in order to ensure our own and our beloved’s safety. 


Nowadays, we get the same activating trigger. However, the actions needed to get out of financial struggles require a different commitment from escaping a bear. This form of chronic activation often leads to behavioural changes and physical symptoms such as anxiety and depression, headaches, sleep issues, and other stress-related problems.


…from stress and anxiety to financial difficulties


Common symptoms of mental well-being challenges, such as increased impulsivity, difficulty paying attention, and memory deficits, make it harder to keep on top of financial management. For instance, you might find it harder to take budgeting and spending decisions, increasing the likelihood of financial difficulties.


In addition, once your cognitive resources are depleted, it becomes way more difficult to say no to temptation. You might buy things you don’t need in an effort to make yourself feel better, only to come to regret it later. 


“Just think about a very long day at work where you had to use all your brainpower”, points out Paul. “Aren’t you way more likely to order some food instead of making your own healthy meal after a day like that, compared to a day where you had time to relax?”


Often, if we are already stressed and not in great financial shape, we are prone to make financial decisions that aren’t necessarily beneficial for us. 


How to best cope with financial struggles?


To feel more in charge of your life and create a more stable situation, it is important to learn to manage your finances and deal with financial tension. However, in order for you to have the right cognitive resources and mindset to tackle this challenge, it helps to try and lower your stress levels.


Below are some tips you can practice to mentally cope with financial struggles and take a step back from your worries:


1. Reach out for support


When facing financial issues, you may be tempted to try and handle your problems on your own. Perhaps you want to avoid bothering others or rather keep your situation private. While disclosing your salary or addressing financial concerns can feel uncomfortable, holding things up will only contribute to your stress. Communicating your worries with someone you trust, such as friends and family, can ease your burden and make it seem far less daunting. 


👉 You might like: The Energy Crisis Is Putting Employees Under Financial Stress: Here’s How HR Professionals Can Help


In addition, speaking to an expert adviser about your financial situation helps you put things in perspective and identify possible solutions. Many organisations provide free financial counselling, whether it is debt management, budgeting, or financial assistance (see the section below for links). 


Reaching out for support to help you out is an act of strength and care, both for yourself and your loved ones. 

Who can I reach out to?

If you’re struggling because of money issues and related stress, talking to a professional or an advice service can be of great benefit. We listed below some free financial support institutions that are available across the UK and can help you in your specific situation, offering guidance and financial assistance for the next steps.


2. Block in a rumination time slot


When we are worried, rumination is a very natural human behaviour. It is our brain’s way of making sure we’re actually thinking of a solution. However, not every single aspect of our life is under our control.


If you are struggling with financial issues, it can help to dissect them in:

  • Things I can directly influence
  • Things I can indirectly influence
  • Things I have no control over


For this exercise, have a look at the circle of concern: 

circle of

Our brain is hardwired to fix even the things that we can’t control. This form of rumination, however, is draining if we get stuck on it.


Try to consciously choose for yourself a specific moment in the day where you are allowed to ruminate, as hard as you can, on those aspects over which you have no control. Keep it to a maximum of fifteen minutes. 


If you notice your thoughts returning to those uncontrollable matters later in the day, you just tell yourself: “Not now, I’ve already had my rumination moment. I’m now allowed to put my attention on other things.”


3. Adapt a healthy lifestyle


As we just discussed, it’s much harder to keep healthy habits when you’re cognitively and emotionally overwhelmed. However, maintaining a good routine for your well-being really pays off. Try to: 


  • Keep a healthy diet
  • Get enough exercise
  • Structure your days
  • Maintain a good sleep rhythm
  • Avoid alcohol/drugs
  • Relax and engage in stress-relieving activities


Nevertheless, don’t be too hard on yourself. If you had a long day and you just crave staying on the couch and catching up on binge-watching Netflix for that night, just indulge in it. The world won’t fall apart if you give yourself a break. Just make sure it doesn’t become a habit.


🖊 Also interesting to read: Been Laid Off? How to Handle the Emotional Impact of Losing Your Job


4. Practice or try mindfulness


Stress often arises from thoughts of things that could go wrong. By using stress-reduction techniques and implementing other low-stress measures, you improve the quality of your lifestyle, mentally and physically. 


Mindfulness techniques like deep breathing and meditation help in easing any anxiety. Try our guided breathing meditation to calm down your nervous system. 


To sum up 


If you feel that the stress of your financial situation is becoming too overwhelming, it’s important to reach out for support. Sharing your concerns with trusted friends and family helps you reduce stress and feel less isolated. 


You might also try attending a support group for people who are struggling with financial stress. If you’re still feeling worried, anxious, or low after a few weeks, get professional help. Talking to a psychologist helps you identify concrete strategies for feeling better.


💡 Looking for a deeper dive into how to effectively deal with financial struggles? Join our masterclass “How to cope with financial stress”, live on October 26.