Money matters, but our mental health is priceless, so how is one damaging the other?

Our finances and mental health go hand in hand – when one is suffering, the other is almost certainly affected. But once we better understand this relationship and how it’s impacting us, we can start to address the problem and support both a healthier mind and bank balance.

The cycle of poor finances causing mental health problems, and mental illness affecting our finances, is destructive and difficult to break free from. In fact, there are more than three million adults in the UK with both mental health problems and financial difficulties. And this number is on the rise.

It’s all encompassing. Rarely a day goes by where we don’t hear about the state of the economy in the UK: the rising cost of living, stagnant wages, zero-hour contracts, ever-increasing student debt, and house prices hitting the roof. Each can affect our mental health as we struggle with the pressures of our outgoings, or juggling saving for a future home with paying extortionate amounts of rent each month. More and more people are struggling and slipping into debt, with a report from the Office of National Statistics in 2017 finding that 4.6 million people in the UK have experienced persistent poverty in 2015.

Additionally, StepChange Debt Charity was contacted by more than 326,000 people looking for debt support in the first half of 2017 – the charity got a call every 48 seconds on average.

For those battling mental health problems, it can mean an even bigger financial burden. Charities and campaigners are encouraging greater understanding of mental health in the workplace, yet some people lack support from their employers. Taking days off for mental health, or time out for doctor’s appointments, can face scrutiny at work. Organising job seeker’s allowance or welfare benefits can be stressful and confusing, and then there’s the overwhelming cost of professional help if you can’t wait for support on the NHS.

The impact on mental health

A cashflow crisis can bring stress, anxiety, fear, shame and frustration. As the problem grows, panic attacks and sleeping problems could become commonplace. Self-esteem is affected and in some cases, substance misuse, self-harm and suicidal thoughts may occur.

Happiful reader Charlotte shares her story:

“It was right after graduating from university and getting my first job that money troubles began to really impact my mental health. I had a degree and got an entry-level job in my field of study; I was ecstatic to start the career of my dreams. The real truth was that I was putting on a brave face at work. Hiding my mobile phone in shame as it rang constantly with debt collection calls - I barely had enough money to cover living expenses, let alone to pay any bills. After bill collectors started contacting me at work, which put my job in jeopardy, and therefore, my source of income, I soon became too scared to answer the phone at all.

At home it was even worse, I was too scared to answer the door or open the post. I started putting my post in a bin bag - which I hid in my closet - I couldn’t bear to open those angry letters. The debt filled me with a profound amount of shame, self-hatred and depression.

I had just ridden out a panic attack in the bathroom at work when I noticed a flyer for the company’s employee assistance programme. It felt like the flyer was put there just for me - and maybe it was, as I’m not sure if the brave face I was putting on was convincing anyone anymore.

I rang the hotline listed on the poster when I got home, and after explaining how I felt and describing my financial situation, they offered me a few free counselling sessions. Although it wasn’t much, that little bit of extra help was the hand I needed to take those first steps out of shame and find the courage to start slowly digging myself out of the situation I was in. It wasn’t easy, and when my bank balance gets low even now, 15 years later, I still feel like that same young woman in that bathroom stall, full of shame.”

Financial stress

Needing to pay a bill before payday, forking out for a birthday or event, most of us will have had that heart-dropping moment of looking at our bank balance and seeing less than we’d hoped.

We talk about money often, or at least, other people’s money. But when it comes to our own cash, we stay silent. Guilt, shame and embarrassment keep our lips sealed. We isolate ourselves, skipping social occasions due to the cost and our relationships break down. The stress makes us irritable and emotional.

Counsellor comment

Why do you think mental health and money are so closely connected?

Counsellor Noel Bell says:
Our prime psychological drives to survive and to affiliate have been developed from evolution. We can’t survive on our own. We need others to help us to make our way in the world. Money troubles impact on our sense of social well-being and the ability to provide shelter and food.

When feeling low, we feel more sensitive to the threats posed by mounting debt. People with mental health difficulties might start to become preoccupied and obsessed with the money troubles, to the exclusion of their own self-care.

Financial difficulties and worries about future income streams can exacerbate mental health problems. Financial pressures and actions from creditors can create a form of lethargy and apathy, that can see people suffering from poor mental health withdraw from social support structures and activities. This isolation can deepen feelings of shame and guilt and potentially lead to suicide ideation.

What is the most common money-related reason why people may seek counselling?

Studies have consistently shown that money is the main reason for divorce in the early years of marriage, and is a common area of conflict for couples. Invariably, people come to the consulting room when they feel they can’t cope anymore on their own, and when their money worries have impacted all areas of their lives.


In a survey of nearly 5,500 people conducted by the Money and Mental Health Policy Institute, 86% of respondents said their financial situation had made their mental health problems worse. When asked if anyone had fallen behind on their bills, more than half said yes. A further 67% said this was due to their mental health and 60% said it was due to difficulties managing their finances.

For someone with mental health problems, financial difficulties are often only exacerbated. Depression, for example, impairs our ability to focus and affects our memory – 95% of people with depression report they spend more when unwell.

Whether you’re ready to talk to loved ones, or you’d rather keep it on the down-low, that’s OK. But it’s important you know that help is available. You don’t need to go through this alone.

Money troubles

Dealing with money troubles on your own can be very difficult. Talking about the issue is essential for improving mental health for the long term. Of course, your first port of call can be your friends and family. But if you’re not ready to open up to them, consider seeking further help. There are many free helplines available, and talking can provide a great relief.

5 Money-saving suggestions

Seeking professional help can be beneficial, the bonus is that a lot of resources provide advice for free. But, for anyone looking for some tangible tips that you can take away today, Happiful has put together suggestions to help:

Avoid payday loans

It might not seem like a big deal, but these loans often come with extremely high interest. What may start as borrowing to pay one bill can lead you to spiralling debt.

Prepare a budget

A quick run through of your outgoing expenses every month helps to avoid getting overdrawn. Often you might splurge on something, forgetting you have a car payment coming out before your next pay cheque. Doing the maths can help you focus more on your spending, making you aware of places you could perhaps reel it in.

Do your research

So often we sign up with a bank, internet provider, TV package and never change – it’s too much hassle. But those introductory rates run out and 12 months later you’re paying double the initial price. Try comparison sites and see what you could save yourself. Often when you call to cancel, a much better deal to stay magically appears from your provider!

Shop around

Who else pops into the supermarket to pick up dinner and comes out with a new soap dispenser, an expensive candle and more chocolate than Willy Wonka’s factory? When you’re walking down the aisles, it’s easy to be drawn into signs offering brilliant deals and discounts, but it’s not saving money if you weren’t going to buy it in the first place. Get into the habit of making a list so you know exactly what you need, without temptation. Alternatively, try doing your weekly shop online – you’ll only be putting what you need in your basket, and can see the exact total cost before the tills, meaning you can ensure you remain within your budget.

Socialise from the sofa

It may be awkward to tell your friends you can’t afford to attend all the events they have planned – cinema trips, dinners out, the pub or club every weekend – but you might not be the only one wanting to rein things in. If you’re honest about needing to be careful with your spending, they’ll understand if you can’t make every event – a movie night round yours means you won’t miss out on the fun.


While the Government has promised an extra £1bn for mental health services each year until 2021, many feel this falls short in meeting the needs of the 16 million people with a mental health condition in the UK.

The economic and social cost of mental illness is £105bn – close to the entire annual NHS budget of nearly £124bn. Only around 10% of the NHS’s annual budget is dedicated to mental health services.

Given the Government’s policy of “ending discrimination in mental health treatment”, perhaps it’s time that the people holding the purse-strings finally put their money where their mouth is?