How Financial Stress Can Impact Our Mental Health—and Steps to Help Cope

On this Mental Health Day, let's take a moment to recognize the relationship between our finances & mental wellbeing.

Worrying about money can affect our mental wellbeing and our ability to manage money can be affected by our mental health.

Many people experience financial stress at some point in their lives regardless of their economic status. According to FP Canada 2024 Financial Stress Index, 38% of Canadians say financial stress has caused anxiety, depression and/or mental health challenges.

It can stem from various sources such as debt, unexpected expenses, rising cost of living, job uncertainity, or layoffs. This stress can have a profound impact on your mental health. 

The Impact of Financial Stress on Mental Health

Financial stress does not only affect your wallet; it can take a toll on your mental and overall well-being. Anxiety and depression are common among those experiencing financial difficulties. These conditions can make it harder to focus, work, and maintain relationships.

Moreover, financial stress can create a cycle of poor mental health and financial decisions. When you are stressed, you are more likely to make impulsive purchases or avoid dealing with financial problems, which can worsen your situation.

Signs of Financial Stress

Recognizing the signs of financial stress is the first step in managing it. Common signs include:

Anxiety and Depression
Financial stress can cause racing thoughts or even panic attacks about paying the next bill, fear of unexpected expenses, or dread of checking your bank account or thinking about the future. 

Difficulty Sleeping
According to FP Canada 2024 Financial Stress Index, 49% of Canadians have lost sleep due to financial worries. 

Feeling Overwhelmed & Avoiding Financial Matters
Feeling like you can't keep up with your finances or you don't know where to start. You choose not to check bills or bank accounts, avoid talking about finances or making a financial plan. 

Social Withdrawal
As financial stress develops, you might start withdrawing from social activities. Whether it's because you don't want to spend money, don't have the energy to participate, or don't want be around others who are 

Unhealthy Coping Methods, such as drinking too much, abusing prescription or illegal drugs, gambling, or overeating. 

By recognizing the signs and effects of financial stress, you can take informed steps toward improving both your financial situation and your overall health.

Strategies to Manage Financial Stress

There are several strategies you can use to manage financial stress. Here are a few steps you can take:

1. Open Conversations. 

Sharing your financial concerns or talking about your money goals with trusted friends, family can provide emotional support and reduce feelings of isolation & anxiety. You may prefer to speak confidentially to a financial advisor or coach to work out how you feel and get practical advice. 

Remember, you’re not alone.

2. Intentional Spending.

Reflect on your spending habits. Are they aligned with your values? Practicing intentional spending can create a healthier relationship with money, leading to less guilt and more fulfillment. One practical step to managing your finances with greater intentionality is to create a budget/intentional plan for your money.

3. Mindfulness.

Consider starting a gratitude practice, journaling or finding practical techniques that fit into your daily routine that help you to be present & reduce stress. By being aware of our thoughts and emotions, we can avoid being overcome by them and can manage them more effectively

4. Movement. 

Our physical health often affects how we feel emotionally and mentally. Incorporating physical activity helps to reduce stress, regulate our nervous system, increase focus, & boost energy levels. Walking is the most underrated form of exercise for our mental health!

5. Education.

Many of us did not learn about finances growing up (at least in the formal education system). So, we’re left to rely on ourselves, family and friends to put the pieces together.

Educating yourself about budgeting, saving, and investing can empower you and reduce feelings of helplessness. Knowledge is a key tool for improving both your finances and your mental health.

If you feel under informed when making financial decisions, you’re certainly not alone. 

Check out some of our Free Resources & Guides to as a starting point learn more and feel financially confident!

Let's work together to create a safe space where everyone has access to resources & support for managing their financial & mental wellbeing.

Book a Free Discovery Call to work out how you feel and get practical personalized advice and support. 

Let's break the taboo! Share this with a friend who would benefit from a judgement free space to talk and learn about financial wellness.

Remember, your mental health matters and you are not alone.