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How Financial Issues Impact your Mental Health

When you’re going through financial difficulties, it’s difficult to remain mentally healthy. Financial issues take a toll on anyone’s mental health, whether they realize it or not: the stress, the pressure, the feeling of dread and loss of hope – these can all have a direct impact on how we feel.

Here are some ways that mental health can be impacted by your financial situation – and what you can do about it.

No safety net

In the past I’ve written about my path out of debt and into savings and the main reason for that goal: I could no longer sustain the emotional drain of not having a safety net.

Living without savings to protect you is stressful; not knowing if you can handle an emergency situation or sudden change can make anyone anxious.

No emergency fund or safety net means that there is no room for changes, hiccups, or emergencies. This feeling of helplessness affects our mental health day to day.

Feelings of inferiority


When we’re being bombarded by images of people living their best lives (aka the social media lies), it’s easy to feel inadequate, like we’re inferior to other people who can afford what we cannot.

Today’s materialistic society is constantly targeting us with expensive trappings and making us feel like we’re “less” for not being able to afford these luxuries.

It’s so easy to fall into the trap of believing that other people are happy in their luxury while we’re endlessly struggling to cope.

Unfortunately, this makes us feel hopeless and unhappy, especially as we compare ourselves to those who seem so much better off.

Anxiety about the future

Everyone has anxiety, but many people have the ability to make choices because of their financial state. When you have financial issues, a lot of these choices are unavailable to you.

For example, the future may seem bleak if university is not affordable. Those who believe a university education is necessary to succeed financially in the future will find themselves in a deep hole of hopelessness.

You may also not be able to upgrade your job options because you don’t have the time or the financial ability to look for a new job.

Even the concept of vacations, travel or leisure may be an impossible dream. Instead of looking to the future, people with financial instability may lose hope and fall into despair instead.

Reducing the Impact on Mental Health with the Guidance of a Therapist

There are ways to manage or reduce the impact of finances on your mental health. The vicious cycle can be broken and you can both get help and make changes to improve your financial problems.

Knowing where to go for help is key to improving your mental health situation. There have been numerous times in this blog where I mentioned that certain products or services are worth the investment. Frugality is not about cheapness; it’s about making the right financial decisions.

Personally, I needed the help of a therapist to help escape the cycle of depression and helplessness I felt when I was in debt. My therapist offered me a new perspective and showed me the light at the end of the tunnel.

With her guidance, I better recognized my situation and how my mental health was a block toward success. It was the beginning of the correction of my path. Down the road, it helped make me more financially stable as well as happier.

Of course, if your mental health is taking a huge impact from financial stress, you need to talk to a therapist as soon as possible. No money is worth the damage to your life and health.

This is also extremely important if your relationship with loved ones is being affected by financial stress. Getting advice from a third party can be the support you need to understand one another and work through the issues together.  

Disclosure: I am not a therapist. The above article was based on my own experience going through financial issues as well as online research. If you are having any mental health or financial problems, please speak to a licensed specialist.

About Ronnie E.

Ronnie is the frugal Latina of the group. Hailing from the beautiful Andes Mountains in Bolivia, she lives and breathes frugality. She loves to figure out how to spend less money and takes on the challenge of finding great deals and cheaper options every day.

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