Your money and your mental health

Monday 15 May marks the beginning of Mental Health Week, which this year has the theme of ‘anxiety’. Given that a recent survey from the Mental Health Foundation found that more than a third of us are feeling anxious about money1, taking positive steps with our finances is an excellent way to improve our mental health.

However, we also know that those with poor mental health are more likely to struggle financially, with the percentage of people who are unable to work because of a mental health condition rising sharply year on year.

The vicious cycle linking money to poor mental health can be a hard one to break, particularly during the current Cost of Living crisis, but here are some ways to get started.

Recognise your triggers

It might be an envelope from the taxman, or a notification on your phone stating that you have gone overdrawn. Recognising the triggers that can set off money anxiety can help you to manage them.

Feelings of anxiety or stress might also cause you to spend more money.

Money charity Mind says that it might be helpful to keep a diary of your spending and your mood, to help you master and understand your feelings towards money, to help you to plan ahead for difficult times.2

Make a plan

Knowing how money is affecting your mental health means you can put plans in place to mitigate it and put yourself back in control. For example, if you find it hard to look at a bank statement, you could set a text message that sends you your balance every day if you find this easier or use an Open Banking app such as Money Dashboard or Emma that categorises your spending.

If you know that, when you are feeling low or anxious, you start spending impulsively or find it hard to pay bills, you could set up direct debits to ensure that bills are getting paid. Another option would be to freeze credit cards using your banking apps so that you have to unblock them and take time to think about what you are doing.

If you are in debt, you could speak to an expert at a charity such as, which understands the link between your money and your mental health. There’s more on this on the charity website, here. The charity can help you to formulate a plan to get out of debt.

Practise money habits that will improve your mental health

Here are some easy ways that you can improve your mental health and your finances

Use a mental health toolkit
This free toolkit from Mental Health and Money Advice can help you to think about how you manage money and how it makes you feel.

Break tasks down into steps
If you have a money task you are anxious about, breaking it into smaller steps can help. For example, if you need to fill in your tax return, breaking it in to steps such as ‘find my online details’ and ‘gather important documents’ before tackling the task as a whole can help you to feel in control and get the job done.

Set achievable goals
Studies show that setting achievable goals makes us happier , and this is certainly true of financial goals. Setting a goal to pay down a certain debt or build up savings to a certain point can increase satisfaction as well as improving your financial resilience. Just ensure that your budget is realistic – making small payments that you can afford will be more satisfying than trying and failing to make larger ones that you cannot afford.

Make a fund for the unexpected
Life throws us all curveballs, so having a readily accessible emergency fund to replace a broken car, boiler or other unexpected expense can help to ensure that you do not experience financial stress when an expense comes up. Make sure this money is in an easy access account so that you can get it easily when needed.

Consider greater protection if you have family to provide for
If you are worried about how you or your family would pay your mortgage or provide for children if the worst should happen, you might want to consider life or critical illness cover. These insurances pay out if the worst happens, with some policies paying a lump sum and others a regular income. Speak to a financial adviser if you think that paying a monthly fee for these policies might improve your financial wellbeing. They can help to find the right policy for you.

17 May 2023