How Financial Stress Impacts Mental Health

How Financial Stress Impacts Mental Health

In 2020, COVID-19 impacted people around the world. As a result, financial insecurity was at an all-time high. Many people lost their jobs or had to work fewer hours. Establishments were closed for months on end. This financial stress has had an undeniable impact on mental health.

Not only are people more anxious and uncertain than ever, but the World Health Organization (WHO) found that the pandemic interrupted or halted critical mental health services in 93% of countries around the world.

How does financial stress impact mental health, and what can be done about it? Let’s take a look.

Loss of Control

Being financially unstable can feel like you’ve lost control over an essential part of your life. This is especially true when job losses happen widely, impacting your opportunities to get new work.

This causes anxiety, and people often turn to unhealthy coping mechanisms. Sometimes these ways of dealing with stress cost money, especially for people who drink or shop to ease their fears.

This results in an unhealthy spiral of financial stress that causes you to spend more money, resulting in more financial stress.

Low Self-Esteem

People tend to hide their struggles with money. Those with financial problems often feel alone and think they are the only ones struggling financially.

Our work provides us with a sense of purpose as well as income. If you have lost a job during the pandemic, you may struggle with both a feeling of aimlessness and financial stress.

It’s easy to feel like everyone except you has things figured out. This low self-esteem can lead to depression and other mental health problems.


With so much going wrong outside of our control, many people start to feel hopeless and depressed. Fatigue is one of the symptoms of stress that can be hard to deal with.

You might avoid solving problems or avoid financial notices. It may be hard to focus on your current work or find work if you’ve been laid off. Being fatigued or having low energy can make it very difficult to take positive action at all.

Like other mental health issues tied to financial stress, a lack of energy can become a downward spiral. You feel like you can’t do much, so you eat poorly and don’t take care of yourself, resulting in even less energy.

What can you do to recover? There are ways to address both your financial situation and your mental health.

How to Improve Your Finances

The first step to resolving financial strain is to face it squarely. It can be frightening, but it’s essential. List your debts, bills, and income, and create a plan to tackle them.

Take a look at your credit, and if it’s in bad shape, take steps to repair it. There’s a lot you can do to improve your creditworthiness, which gives you flexibility as you work on your problems.

Don’t be shy about calling your creditors and letting them know about your situation. They will likely be more flexible than you expect about setting up payment plans and making arrangements. They want you to be up-to-date as much as you do!

Finally, look into creative ways to earn money. Consider freelancing or doing odd jobs on the side of your full-time job. You can even freelance full-time if you don’t currently have other work.

Take Care of Your Mental Health

One of the big challenges with mental health is that it’s tough to make positive steps when you’re in a bad place. It feels like you simply can’t do anything.

That’s why seeing your doctor is often the best first step. They can help you with medication and therapy recommendations to get you back on the right track. Once your brain chemistry is in balance, you’ll have the ability to make other improvements.

If you’re worried about your ability to afford treatment, contact your Medicare or private insurance provider and determine what coverage you have. You can also seek out low-cost community options.

Getting enough sleep, exercise, and healthy food is essential in getting back on your feet. It’s challenging to get started, but taking one step at a time will give you the momentum you need.

You Can Get Back on Track Financially and Mentally

Financial stress plays a big role in mental health, especially when it comes to anxiety and depression. Fortunately, there are steps you can take to put your finances in order and get your mental health back on track.

When you get the care you need, you’ll make better choices. This helps you get back on your feet. Everyone struggles. The good news is that there is a way out!

About the Author

Jori Hamilton is an experienced writer residing in the Northwestern U.S.

She covers a wide range of topics but takes a particular interest in covering topics related to health and wellness, including mental health awareness and addiction education.

You can follow Jori and learn more about her on Twitter and LinkedIn.

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