Money and your mental health

By Finbar Garcia LUTCF, FSS, MFA

In January, I wrote about money mindset (CN, Jan 5-11) where I focused on the different generations and how they think, spend, save and so on. In this column, I’m sharing with you how money, or the lack of it, can cause mental health issues. The main culprit to this condition is the lack of financial education or as some would say, financial literacy. Financial stress is the feeling of worry and anxiety in not fulfilling your daily financial duties, not having enough money to cover your basic needs, and not being able to manage debt or even achieve your personal goals.

While we may all have some personal health issues that we can deal with financially, there are persons out there who cannot deal with these current issues. This is further compounded with the lack of finances or support which will have some effect on their mental health.

For young adults, it’s important to develop a healthy relationship with money. I don’t mean having plenty money but mastering personal finance concepts that can avoid financial strain and improve your well-being.

Persons may have different types of financial stress depending on their life stage. Some in their mid-40s to 50s might be concerned about not having enough income for retirement, while those much younger will be concerned about the things happening now in their life.

Through financial education and your personal efforts with your day-to-day spending, you can attain a balanced financial well-being. These are done by taking control over your spending, putting protection in place to have that financial security, while still working towards those goals and enjoying life.

Many young career individuals suffer from “money mental health” due to major financial responsibilities and other expenses that they may not have catered for so early in their careers.

Carolyn Mc Clanahan, MD, CFP, and founder of Life Planning Partners says, “Money is one of the biggest stressors in life, and when you are stressed over anything, that causes physical issues within your body, like those stress hormones that make you not sleep or bring down your sense of well-being overall.”

Those young adults having to navigate through life challenges, regardless of financial stability, and the major changes in such short periods of time, carry more financial health issues than others. There are a lot of unknowns to them, like having to change living accommodation, new jobs, finding their independence, while trying to secure some level of savings and peace of mind.

Some effects on your health include but not limited to sleep disturbance and insomnia, physical health problems, relationship strains, reduced working hours and negative impact on self-esteem.

Now, here is the good news. For those dealing with financial stress, turning things around is within your power. It’s all about educating yourself about money matters that include budgeting, saving, understanding basic financial concepts, and getting the correct insurance protection and investments.

All these are your building blocks to you maintaining good financial health to reduce the effects of money-related stress.

Get to know your money habits: Before you budget, see where you are currently as to income and expenses. Is your job stable or are you on contract? Do you spend on unnecessary items and an impulsive buyer?

Create a monthly budget: Check your numbers, list your income on one side of your budget sheet, and all expenses on the other side. These expenses should be broken down in 3 groupings. {A} Fixed Expenses, e.g. pay bills. {B} Expenses that you can control and {C} Discretionary Expenses, these that you can do without at certain months.

Build and maintain an Emergency Fund: This savings investment should be in your Fixed Expenses section of your budget and the amount should not vary every month. This will buffer any unforeseen expenses at any time, reducing any financial stress. Make sure any money taken out is for an emergency.

Find an extra source of income: Many persons can remove these financial stress by seeking additional income. This doesn’t have to be a strenuous job, but an income-generating hobby or some extra lessons, depending on your abilities.

Financial Education: Again, by seeking information and attending financial seminars, will help you gain knowledge and demystify anything that once seemed complicated. Using education to reduce your stress will make you more competent in dealing with your money.

Seek professional help: If you are struggling to cope with your finances, it is advisable to seek help with a professional adviser. While this may incur a cost, it will be worth it, as you will be on the road to reducing your money-related stress.

Financial well-being is an important component for your overall mental health. By taking these steps to address your current financial position, you will be taking charge of your money and health, rather than stressing and reducing your life’s expectancy.

Feel free to contact me to host financial seminars or individual advice if needed, which can be in person or virtual. I’m also available to companies or groups at no cost.

“Sharing my Knowledge is Free….Accept it with an open Heart.”

Call me for more information on planning your financial future. Send your questions to myfinancialadvisor2020@gmail.com or call 620-1185.