Published on November 10, 2023

The Link Between Money Worries and Mental Health 

by Psych Times Staff

The link between money and mental health is well established. For those finding it hard to cope, any thought of their financial struggle could trigger or exacerbate mental health problems.

Unfortunately, many find it almost impossible to manage their personal finances amid the current cost-of-living crisis. Some struggle to save from month to month, while others can barely afford to feed their families. So, when it comes to well-being, it’s hardly surprising that money can be a significant factor. 

Whether you’re working full-time or supporting someone in need, it’s always worth knowing how struggling with money can worsen someone’s mental health.

How does money affect mental health?

  • Certain financial situations can trigger anxiety. For example, going to the bank for a personal appointment or not being able to afford direct debit could cause someone to worry about how they might cover other expenses.

  • Struggling for money can affect your social life. If someone becomes unable to join in with their usual activities, they may feel isolated and lonely, which could trigger symptoms of depression or a relapse from a previous bout.

  • When it comes to bad credit, certain mental health conditions can exacerbate the situation. People suffering with borderline personality disorder, for example, may turn to compulsive spending and worsen the current situation with unhealthy coping mechanisms. Seeking support may feel out of reach, leaving many trapped in a vicious cycle.

  • Sleep deprivation can eventually occur if someone stays up late worrying about their financial situation. In addition to the already increasing levels of stress, a lack of sleep can affect the immune system and make it harder to cope with day-to-day life.

Facing the facts: How to cope with money worries

Unfortunately, financial difficulties and ill mental health frequently come together. 

In England alone, it’s thought that almost half of all people in problem debt also suffer from a mental health issue. Sometimes these two separate issues are unrelated, but often, one exacerbates the other and leaves people struggling to find an escape route. 

With professional support, a stable income and determined self-help, some of these challenges can be conquered. Dealing with money worries is no walk in the park, but a few starting points might include:

Make one decision at a time

Rushing into things can be an almost instinctive reaction when you’re nearing crisis. If possible, don’t try to fix too many things at once. Work towards addressing one issue at a time, and always ask for support if you’re feeling hopeless.

Save as and when you can

Even if you’ve never saved before, it’s never too early or late to start doing so. Starting small will help you to spot any stressors, unnecessary expenditures, and opportunities for more saving. 

When you’re ready, opening an online savings account gives you more flexibility and control over the way you save. You can also make appointments with your bank to discuss tailored savings plans – as some accounts might not be suitable for everyone.

Try to budget

Budgeting is a sensitive topic. Anyone who barely earns enough money to live will know that budgeting feels impossible when other real-life issues take precedence. 

If possible, try to allocate a set amount each month to go towards essential spending, with some put aside for repaying your debts each month too. Don’t beat yourself up if you go off course during one particularly challenging month.


With the right coping mechanisms, managing your money worries doesn’t need to involve spending more. If you’re reaching the point of crisis, do not hesitate to seek professional support to help you get back on track.

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