As we enter June and leave May behind, we are also ending Mental Health Awareness Month. Many factors in life can influence one’s mental state. Recent studies have shown that poor financial health, particularly financial stress, is a leading cause of poor mental health. The connection between mental health and personal finances is like a cycle. When our level of stress increases, it can be tough to manage our finances, and when we neglect our finances, it can take a toll on our mind. This cycle can lead to anxiety, depression, and even physical issues like headaches or high blood pressure. It can also strain our relationships, causing us to withdraw from loved ones (1). Breaking the cycle is critical for reducing financial stress and lessening its impact on our mental health.

The first step in managing financial stress is to acknowledge the need for change. When dealing with mental health issues, it can be difficult to admit you need help managing your finances. It’s important to remember that at some point in life, everyone struggles financially. Research shows 63% of 18-34 year olds and 54% of 35-54 year olds have anxiety surrounding their finances (2). In a world where one’s well-being and social status are intrinsically linked with one’s finances, it’s impossible not to be emotional about your money. Finding the right path towards managing your financial stress doesn’t happen overnight. Give yourself grace as you work through this analytical and emotional process.

Instead of focusing on your entire financial situation at once, it can be helpful to begin by identifying your main financial problem areas and working from there. Some common financial stressors include debt, loans, and lack of savings. When it comes to paying off debt and loans, many people find it helpful to set a date in the future as their goal to be debt free. With this date in mind, work backward to plan how much you need to pay towards that debt every month until your goal is reached. When saving, we can use a similar process. Figure out how much you would like to save and set a date for that savings goal. Work backward to figure out how much you need to put away at a regular interval until you have reached your savings goal. Depending on your situation, your goal dates could be a few months away or years away. No matter the time frame, sticking to your plan and knowing you are on track towards reaching your financial goals can help ease your stress.

Many people find it helpful to keep a budget of their spending and income. Being aware of how much money you are making and how much you are spending can bring clarity to your financial situation. This process can often be stressful, as it lays your finances right out in front of you. Work through this at your own pace and consider asking a trusted family member or loved one to help you navigate through each step. To build out your budget, break down how much of your income needs to go to necessary areas such as regular bills, house payments/rent, insurance, etc. This step can also help you decide how much to put towards your savings and debt goals.

After breaking down your necessary payments, consider putting a portion of what is left towards an emergency fund. Keeping an emergency fund of three to six months’ work of expenses can help prevent future financial stress caused by going into debt due to a medical injury, job loss, car repairs, etc. Without an emergency fund, people tend to get into credit card debt to cover these costs. 43% of Americans with credit card debt attribute it to an unexpected emergency (3). With research showing that people with debt are more likely to experience poor mental health (2), an emergency fund could be vital in managing finance related mental health issues.

It’s never too late to start managing your financial health. While the process may initially seem daunting or overwhelming, try to focus on what you can control in the present and avoid ruminating on past financial decisions. As you navigate your finances, don’t hesitate to reach out to someone you trust, such as a family member, spouse, or financial advisor. Their advice can help lower your stress and provide guidance on how to achieve your financial goals. Be compassionate with yourself and know that you are not alone in your financial struggles, take the time to find the plan that’s right for you.


If you are interested in taking further steps to mitigate financial stress, I suggest looking at long-term planning solutions such as 401K retirement savings. Check out some of our past blogs to learn more on this topic:

Retirement Contributions to Consider before Tax Deadline by Edward Bradley, CFP®, ChFC®

April is Financial Literacy Month: Three Phases Toward Building a Solid Financial Future by Andy Rodgers, CFP®, ChFC®

Tax Planning Part II: Planning for Retirement by Caroline Alabach

If you or someone you know is experiencing a mental health crisis, call or text 988 for support and assistance.
Every investor’s situation is unique, and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.
The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Rachel Bentfield and not necessarily those of Raymond James.




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