Mental illnesses like depression are a leading cause of disability in the United States
More than a third of working-age Americans have overdue debt, while many more suffer other financial stresses, such as living paycheck to paycheck without an emergency fund. Meanwhile, mental illnesses like depression are a leading cause of disability in the United States.
The impact of poor financial health on mental health
"Money is the number one source of stress in the lives of three out of for Americans," said Dr. Brad Klontz, founder of the Financial Psychology Institute. "Financial stress has been found to have profound negative effects on our physical and mental health, which includes a higher risk of mortality, anxiety, depression, and relationship conflicts."
A vicious cycle
Poor mental health can make it harder to stay on top of bills and spend money responsibly, possibly worsening a financial situation.
"Depression can impair our ability to work, to organize, to concentrate, and to take care of our basic financial responsibilities, such as paying bills," said Klontz.
Financial and mental stress can quickly enter a vicious cycle: The worse a money situation gets, the more anxious or depressed a person may become. And that makes it harder to take control of their finances, which only increases feelings of anxiety and depression.
Recognizing this cycle requires a person to notice symptoms of depression and anxiety in themselves and then take a look at their finances to see if there's a connection. Common symptoms of depression and anxiety include:
- Feeling sad and hopeless
- Not having energy
- Withdrawing from friends and family
- Difficulty sleeping
- Frequent crying
- Mood swings
- Frequent agitation or irritability
- Changes in eating habits or weight
- Anxiety attacks, such as a rapid heartbeat and difficulty breathing.
How to assess financial health
And what does financial health look like? Michael Innis-Thompson, Senior Vice President and Head of National Community Lending for TD Bank, describes several indicators of strong personal finances. "One is the ability to handle unexpected expenses," he said. "You have a rainy-day fund set aside as well as savings for retirement. Having a budget, paying down or paying off debt, paying bills on time and a good-to-excellent credit history are also very important."
Red flags include living paycheck to paycheck, missing bill payments, and spending too much – which means taking a good look at spending habits. The National Foundation for Credit Counseling and the US Department of Housing and Urban Development are two resources available to help people assess their spending, manage their debt, set up a budget and receive credit counseling.
"There has to be a commitment to understanding what your financial picture looks like and not being afraid to get advice," Innis-Thompson said. "Going it alone sometimes is probably not the best path."