Is Financial Stress Impacting Your Mental Health?

Updated: Jul 28, 2021

Financial stress from too much debt is a significant contributing factor to poor mental health. We take a look at the warnings signs that you are suffering financial stress and look at some of the ways you can manage it.

Have you laid in bed awake all night thinking about your money troubles or a bill you can't afford to pay? Perhaps worrying about school fees, or unexpected repair work that has to be done on your car that you simply can't afford? If the answer is yes, then you have a small insight into how debilitating financial stress can be.

Hundreds of millions of people around the world use mental health medication each year and this number is only growing, magnified by the ongoing impacts of COVID-19. Governments spend billions in their budgets to provide resources and funding to groups to help understand and manage the mental health issues that their countries face.

It is a serious issue. Poor mental health can be caused by a number of things, but financial stress as a result of overbearing debt commitments is certainly a key contributing factor.

What is mental health?

Mental health relates to a range of health and behavioural issues that vary in severity and duration. The most common mental health issues people face around the world are depression and anxiety and financial stress is one of the major reasons people suffer from depression and anxiety.

What is financial stress?

Financial stress occurs when you are continuously worried about money. A subset of financial stress is mortgage stress. The generally accepted rule of thumb is that you are in mortgage stress if more than 30% of your household income is used to pay your mortgage payments (or rent).

There are so many people experiencing mortgage stress and as a result, arrears of mortgages are at some of their highest levels, the only saving grace being the low interest rate environment. Of course, low interest rates will not last forever, and this can be another source of worry for those already experiencing financial stress as they simply will not be able to handle an increase in interest rates.

While financial stress can directly cause mental health issues, it is also a factor in creating stress in things like relationships. Financial stress is a major factor in relationship breakdowns around the globe.

Signs of financial stress

It is important that you are able to recognise when you are experiencing financial stress so you can minimise it before it gets out of control and starts to have a negative impact on your life. Some signs of financial stress include:

· Arguing about money with family and loved ones

· Sleeplessness due to thinking about money

· Feelings of anger that you do not have enough money or fear about what a lack of money may result in

· Mood swings when the topic of money or a new expense comes up

· Change in appetite (loss in appetite, or over eating for comfort)

· Use of alcohol or drugs to feel better

· Feelings or thoughts about self-harm

How to reduce financial stress

Financial stress can hit people at any time - a sudden illness, loss of job, or unexpected expenses that you haven't budgeted for can all cause financial stress. Missed loan repayments and calls from debt collectors only intensifies those stress levels. If you have ever had to negotiate with debt collectors, it is not an enjoyable experience. Settled. provides a fully digital service that can help take the stress out of debt negotiation by providing you with a comprehensive information guide and a debt settlement offer letter generator that you can complete and email to your debt collectors or creditors. The good news is that there are a number of steps you can take to get your finances back under control.

· Seek professional help in the form of a financial adviser or financial counsellor. There are many free services available to vulnerable people experiencing financial stress.

· Speak to your Bank or Lender about how you can consolidate or restructure debts so you can lower your overall commitments or reduce the interest rate. If you are in financial hardship due to a short-term issue, then a freeze on repayments for your debts may be an option.

· Negotiate affordable repayment plans with any overdue creditors or debt collectors or even offer a debt settlement to clear the debt in full.

· Develop a realistic budget so you can keep track of all your money and make sure you do not overspend on things you don't need and put enough money away each pay period for mandatory expenses.

Importantly, do not be ashamed or embarrassed to seek help. You only have one life, and you want to make it the best life it can possibly be. It takes courage, but you owe it to yourself to seek help to improve your situation. You will find there are so many amazing and supportive people willing to help you.

How to manage stress?

Financial stress or Emotional stress can really have a profound negative impact on your daily life, so it is important to take steps to help improve your stress levels and take care of your health. Some simple tips that can help with this include:

· Talk to people close to you or seek professional counselling (there will be free services in your local community)

· Keep a diary of your thoughts and feelings to get them our of your head and down on paper. They may look less daunting and easier to solve when written down.

· Stay active by going for a walk or playing some sport, or keep your mind busy by watching a movie or reading a book.

· Consider meditation

October 10 is World Mental Health Day. If you are suffering from mental health issues, or know somebody that is, at the very least mark this day in your calendar as a day to do something positive to help your mental wellbeing. If you need some tools to help you settle your debts with debt collectors, take a look at the Settled. debt settlement letter generator. It is a fully digital tool that can help you create a letter to present a debt settlement offer to your creditors.

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