What You Need to Know About Financial Stress and Mental Health

Understanding Financial Stress and its Impact on Mental Health

Our mental well-being is closely intertwined with our financial circumstances, a fact that may not surprise many. Almost 48% of Canadians admit that monetary stress has disrupted their sleep, according to the Financial Planning Standards Council (FPSC). And the longer the financial stress lasts, the more likely it will start to affect our mental health. So, what are the most effective and practical ways of dealing with this issue?

Talking about financial stress with the right people can be beneficial. Here’s a podcast where two professionals discuss the relationship between mental and financial health and how to best manage both.

What Triggers Financial Stress?

Financial stress is experienced differently by different people. Some feel stressed when logging into their online banking app to check their balance, others might feel anxious when making a large purchase or bill payment. Some people may also feel stressed when they compare themselves to others.

But at the core of any source of financial stress is the feeling of not having enough.

The psychology of scarcity is a perspective on the mindset of someone who doesn’t have as much money as they need to meet their financial obligations.

Feeling Cornered and Vulnerable Due to Financial Stress

When money is tight, it’s not only stressful, it can make you feel like you’re trapped in a highly vulnerable position.

Chantel describes this as a “scarcity tunnel.” A scarcity tunnel is like having tunnel vision on all of your financial constraints. It forces people to concentrate on urgent short-term issues and, as a result, have difficulty implementing a financial plan for the future.

“If someone says, ‘I’ve got all this debt. It’s going to take five years to pay it off, but I can’t even pay my rent.’ The immediate fire is what they’re going to want to address,” Chantel explains.

People who resonate with financial vulnerability often feel guilty about their situation, overwhelmed by their finances, and isolated. Being in the “scarcity tunnel” makes many people feel deserted.

The very thought of any kind of financial planning can induce nausea for some. It’s difficult to confront your financial reality when your main goal might be affording the essentials and surviving the week.

For anyone struggling with these issues, figuring out what to do can be tough. However, there are numerous ways to move forward and improve your mental health while still managing your financial concerns.

Eliminating Shame

One of the most prevalent emotions for people with debt is shame. Many people feel that because they have debt, they have failed, or it makes them a bad person. This isn’t true, but it’s often how people with debt perceive themselves.

Shame about money often leads to another problem which causes people to sink further into debt.

Addressing Financial Avoidance

Financial avoidance is when people avoid dealing with their financial commitments for various reasons such as guilt, shame, or lack of financial literacy. Chantel expresses that she often meets with people who have avoided engaging with their financial situation and feel extreme anxiety about sitting down to do something like a budget.

Her recommendation is that people start small and sandwich support for their nervous system. Buffer your financial tasks with things that comfort you. If you’re starting a budget, do it for 5-10 mins then take a break for the same length of time before going back to it. It’s also crucial to be in the right mindset to do it, not when you’re already stressed.

When You Reach the Breaking Point

If your mental health is severely affected by money issues, talking to a professional can help you regain control of both your health and finances.

Speaking with someone who understands financial stress, listens to you non-judgmentally, and lays out all your options can change your mindset about your debt. Instead of seeing it as a stressful problem, you’ll start seeing solutions.

We’re here to help you find a pathway to deal with your debt. And you can talk to us for free.

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