Exploring Mental Health And Personal Finance
8 months ago

Mental wellbeing has rightly been the subject of a lot of attention in recent years. An often overlooked factor in people’s mental wellbeing is personal finance. This article explores the relationship between mental health and personal finance.

Mental wellbeing has rightly come increasingly into focus over the past several years. However, one aspect of mental wellbeing that is less often discussed is the significant correlation between mental wellbeing issues and financial hardship.

The issue of money and mental wellbeing is a vicious circle because worrying about money can damage our mental wellbeing and poor mental wellbeing can make it harder to make good financial decisions. In this article, we explore the connection between mental wellbeing and personal finance, and discuss ways of organising our finances in a way that reduces the risk of poor mental wellbeing impacting our finances and vice-versa.

Monitor your mood and spending habits

A survey conducted by the Money and Mental Health Policy Institute found that 93% of respondents reported that they spend more than normal during a period of mental ill health. One reason for this is “comfort-spending”, where we buy things to perk ourselves up.
While we often monitor our spending, monitoring our mental wellbeing is less common. This can be done through an app or simply through sending yourself a daily message with a wellbeing score out of 10. You can then review your spending alongside your wellbeing scores to see if there is a pattern.


If you do spot a pattern, then it is worth trying to remain aware of it and adjusting your spending behaviour so that your mental state isn’t worsened by later worrying about having overspent. You could also inform a trusted friend or family member of this pattern and consult them before making purchases if you are feeling down.

Automate your bills and savings

Having to make financial decisions and sort out admin is tiring at the best of times. By automating your savings and bills through direct debits and banking apps, you can minimise the risk of falling behind on your financial goals and obligations when you’re not feeling your best.

It’s a good idea to switch any paper bills over to direct debits. If possible, it may be helpful to set up your bills so that they leave your account shortly after your salary comes in each month, so there is no risk (or associated stress) of you overspending during the month and being unable to cover bills.

Similarly, saving is most effective when done at the start of the month (so that you spend what is left after saving, rather than saving what is left after spending). Saving requires regular discipline, which can be in short supply when you’re not feeling 100%. However, automating your savings with the help of banking apps, such as Starling Bank or Revolut, takes decision-making out of the equation.

Prioritise debt

Perhaps the biggest source of stress as it relates to personal finance is debt. It’s worth drawing a distinction here between potential “problem” debt, such as credit card debt, payday loans or certain bank loans and “necessary” debt, such as mortgages (or UK student loans). After all, most of us will need some debt in order to go to university or purchase property.

However, problem debt can feel like an enormous burden that sits in the back of our minds. This is particularly the case because debt can take away our control over our own finances; not feeling in control can have a major impact on our mental wellbeing.

If you do find yourself in such a situation, perhaps the most important thing that you can do is to talk to someone you trust about it and create a plan to pay it back. If you set up standing orders to pay off your debt, you should try to ensure that you meet the minimum repayment amounts to minimise late payment fees and avoid interest piling up. You should also prioritise paying off debts with the highest interest rate.

We are all strapped for time and headspace due to juggling work, studies, relationships and - on top of all of that - a cost of living crisis. Taking the time to organise our finances by setting up direct debits for bills and savings, and creating budgets is a form of self care - plus, our future selves will thank us for doing so. 

Related Blogs