Ahead of Mental Health Awareness Month in October, its important to take a step back and reflect on the increasing rate of stressors, uncertainties, and unprecedented challenges that impact our mental health.
From the pandemic's toll on mental well-being to the everyday pressures of work, relationships, and personal expectations, many individuals find themselves grappling with anxiety, depression, and other mental health issues. Yet, despite the growing awareness of these challenges, there remains a significant gap in understanding, acceptance, and action.
One such stressor that exacerbates every year is our finances. Studies show that the state of our finances has a signifcant impact on our mental health. Similarly, our emotional wellbeing can influence our spending habits, in turn affecting our financial standing.
Wanita Issacs, Head of Key Accounts at financial services group, Momentum, speaks on the impact our mental and emotional health can have our financial wellness - and how to achieve equilibrium between the two.
Navigating the effect of mental health on financial wellness
When our mental health is on a downward spiral, our finances often pay the price. It has been shown time and time again that our emotional state can play a significant role in our spending habits.
According to Wanita, when we are stressed or anxious, we are more likely to make impulsive purchases or take on debt. "Stress and anxiety can lead us to seek immediate gratification rather than considering the long-term implications of our decisions."
On the other hand, people with strong mental health are better at managing their finances and making sound investment decisions, says Wanita. They are less likely to succumb to impulse buying and more likely to be able to think through their decisions rationally before making them.
Given this financial juxtaposition between mental states, she says it is important to take care of both our mental and financial wellbeing to be successful in both areas of life.
"Taking some time out for ourselves, whether it is to meet a friend or take a relaxing walk, can help reduce stress levels," says Wanita. "It can also help us to be mindful about how much money we spend every month."
Although it is usually never as easy as 'taking a walk', she believes seeking advice from a mental health professional when needed and a financial adviser can help with striking a healthier balance between mental and financial wellbeing.
How mental blockages impact spending decisions
Wanita says habitual decision-making is one way in which our mental health impacts our finances. "When we’re used to making the same choices, it's easy to buy things without considering if they are necessary or not. The same applies to subscriptions, cars, and entertainment."
She says decision fatigue also plays a major role in our financial decisions. We only have so much energy and focus when it comes to making choices. When it runs out, we are more likely to turn to bad spending habits.
"Instead of focusing on what we need and working slowly to achieve our financial goals, we may obsess over material possessions or the desire to become wealthy quickly. If left unchecked, both of these can leave us with debt or other financial problems. This exacerbates the stress and anxiety that triggered the behaviour in the first place, causing a spiral that erodes both mental and financial wellbeing," she says.
Talking to someone helps
To prevent or stop such a spiral, Wanita advises speaking to the professionals who can support you in clarifying things, provide insights and help you work out a personal plan for your unique situation.
"Talking to a professional can help you find a way out of a challenging situation and towards healthy mental and financial habits. Together, you can work towards achieving your goals. Our money and minds are inextricably linked. One impacts the other and we need to equip ourselves with the best advice to fuel our different journeys to success. "
