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What to do if money worries are affecting your mental health


Find out what Sarah Murphy, a founding member of the Mental Health and Money Advice service, had to say if money worries are affecting your mental health.

With 77% of people openly admitting they are stressed about money, the link between mental health and money is well-known.

Are you struggling with money because of a mental illness? Or are your money problems negatively affecting your mental well-being?

Sarah explains what you can do yourself and how the Mental Health and Money Advice service can give you the support you need.

How to deal with money problems that can affect your mental well-being

There is a clear conundrum when it comes to money and mental health. The stigma surrounding mental health has started to erode, however, add money problems to the equation and people are less inclined to talk about their issues.

Communicating your concerns with friends, family or support workers is the first step to coping with the stress money problems can cause.

The way we manage our money has changed with the advancement in new technology. Most banking apps now allow you to see your spending in real time and have several embedded tools to help you manage your money better.

For example, certain apps give you the option to separate your income into different pots – like jam jarring – allowing you to safely assign your money to rent and bills without having the fear of overspending.

How worrying about money can cause a mental health condition

There is a cause and effect relationship between money and mental health, and if the problem is not dealt with there is a tendency for the situation to spiral out of control.

For instance, some people may have never experienced a mental health issue. Suddenly, this person could have an income shock such as:

  • A redundancy or job loss at work
  • A relationship breakdown – and now must live on one income compared to two
  • A death in the family

This person could then start worrying about paying bills, getting a new job or being able to afford food.

This negative thought pattern can then spiral out of control without the necessary help and support leading to a potential mental health illness such as anxiety and depression.

How living with a mental health condition can impact your money management

People who have a long-term mental health illness can also find themselves in financial difficulty because of their condition.

As an example, someone who suffers from bipolar could experience a manic phase whereby the tendency is to be very impulsive, and money can lose its value, resulting in spiraling debts.

Understanding your condition can help you manage your money better. Read our top tips on how to manage your money better with a mental health illness.

What to prioritise paying if you’re in debt

When faced with mounting debts understanding what to prioritise is something many people are not aware of.

You should always prioritise debts that could impact your life directly. Always try to pay debts and keep up payments on the following:

  • Rent or mortgage on your house
  • Electric and gas bills
  • Council tax
  • Payments on a car
  • Food shopping

The list below highlights what is not a priority to pay if you can’t afford it. As long as they are not secured against you in anyway such as your home:

  • Credit cards - can only affect your credit rating
  • Loans - can only affect your credit rating
  • Water bill - by law you can’t be cut off from your water supply

If you’re struggling with budgeting, use the free budget planner to help you better manage your budget and control your household spending.

What are the money management options for people with long-term mental health conditions?

If your mental health condition affects you in such a way that you struggle to deal with the benefits system, you can appoint a trusted person to claim your benefits on your behalf. Find out more here about assigning an appointee.

If your capacity to deal with money is affected by a long-term mental health illness, and If you’re able to make decisions now, but are concerned you may lack the capacity in the future you may want to appoint a Lasting Power of Attorney.

This is especially useful if you have a bipolar disorder and are concerned that when you become unwell you might go on a spending spree, leaving you in financial difficulty.

Having a Lasting Power of Attorney set up means if you lose the power to make decisions, this person would be able to act on your behalf.

Top tips and advice

  1. Why the Mental Health and Money Advice service is helping people with mental illness and money issues
  2. This Talk Money Week, read our conversation guides around money worries
  3. Should you be worried about rising mortgage interest rates?
  4. What is financial anxiety?
  5. Budget 2023: How does it affect you?
  6. Why debt can happen to anyone, and how shame can shape our relationship with money
  7. Let’s Get Talking about Student Mental Health: University Mental Health Day
  8. How to save money this Christmas and New Year’s
  9. Tips for managing your money and mental health in 2023
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  11. Blue Badges available for people suffering from mental illness
  12. Budget 2018: How does it affect you?
  13. What the 2018 PIP ruling means for those living with mental health issues
  14. Mental health and Money Advice responds to Goverment’s proposed Breathing Space scheme
  15. Being a carer can affect your mental health and money
  16. What to do when debt worries impact on performance at work
  17. Changes to Support for Mortgage Interest
  18. FCA announces new rules on 'buy now pay later' products and overdrafts
  19. Mental health and money advice for COVID-19 outbreak
  20. How to budget your money during the COVID-19 outbreak
  21. How the Touco app can help you get support around money and mental health
  22. How banks are helping during the Coronavirus period
  23. DWP publishes mental health conditions for PIP back payments
  24. Managing your mental health and money after government cuts
  25. Universal Credit boost for mental health
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  27. Tips for managing your money and mental health in 2022
  28. How to manage your mental health and money following the energy price rise
  29. How the Universal Credit jobseeker and work capability assessments may affect you
  30. World Bipolar Day
  31. What is the impact of savings on mental health?
  32. How to save money at Christmas 2023 and New Year's 2024
  33. Managing your money and mental health on Black Friday and Cyber Monday
  34. What does the Autumn Statement 2023 mean for you?
  35. What you need to know about the household energy price cap decrease
  36. What does the Budget 2024 mean for you?
  37. Debt Awareness Week: Reasons People Don’t Get Debt Advice and How to Overcome Those Barriers
  38. Your Simplified Options for Dealing With Debt

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