Coping With Money Stress
According to the Money and Mental Health Policy Institute, over 1.5 million people living in England today are experiencing both what they term “problem debt” and mental health issues. Out of a similar survey of 5,500 English residents living with mental health problems – from Leeds to London – a striking 86% of them found that stress about money directly correlated to their worsening mental health.
Whether you are an independent contractor or freelancer, a retired person or business owner, financial difficulties are likely commonplace in your working life. Left unchecked, these stresses can negatively affect both your health and the health of your business.
We’ve compiled this guide to coping with money stress as a resource to help you on your journey to overcoming your financial troubles and saving yourself time and energy previously spent worrying about your finances.
What is Money Stress?
Money stress is a feeling of anxiety, anger, sadness or hopelessness resulting from – or relating to – a person’s individual or business finances. Whilst most people will experience financial stress from time to time, it’s important not to let it begin impacting your mental health.
Money stress may be felt at certain times of the year, such as in the run-up to the end of the financial year, or in the overhaul of the tax system (as we’re experiencing with the HMRC’s transition to ‘Making Tax Digital’, or ‘MTD’).
However, stress about money can equally be a more pervasive presence in a person’s life. This is specially if that person is already dealing with mental health issues, or is experiencing a long-running period of financial uncertainty.
How Does Money Stress Affect Businesses vs. Individuals Differently?
When we talk about money worries, we’re not solely referring to an individual’s personal finances. In fact, financial stress can affect every aspect of your life.
On the individual level, we must deal with a range of constant monthly outgoings. From rent and mortgage, gas and electricity bills, food expenses, pet care, and so on. At the same time, the cost of these things is often out of our control. This is particularly true during times of economic crisis, such as those befalling the UK at the time of writing (October 2022).
An individual’s financial stresses pertain to the survival of that person’s way of life, relationships, hobbies, and at the most extreme, themselves. Typically, this type of financial stress is felt solely by the individual, and the individual may feel isolated because of this.
On the other hand, at the business level, financial stresses can be felt by the whole team. Savvy employees know when their employer is struggling with money. This will make them feel less confident about the security of their future within the business, and add to their own personal financial stress.
Additionally, financial stresses within a business are magnified as we move up the ladder. Passing through a finance department strained with dealing with the ongoing situation, and peaking in the stress carried by the business owner.
A business owner’s financial stresses pertain to the survival of the entire business, and thus to the jobs of dozens, if not hundreds or thousands, of employees. Given that that business owner may well be carrying individual financial stress out with that of their business, the effects on their mental health are thus compounded.
How to Tell if Your Financial Stresses are Affecting Your Mental Health
It’s not always easy to separate the everyday stresses of your home or work life from those of your finances. Here’s a list of symptoms and signs which may suggest that your financial stresses are directly affecting your mental health.
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Anxiety
Increased heart rate, fear, paranoia or shortness of breath when thinking about money are signs that you’re experiencing finance-related anxiety. It is thought that anxiety is caused by over-activity in the brain, especially with regard to the production of serotonin and noradrenaline, which regulate mood. Anxiety can make it hard to concentrate. Also, it can make it difficult to sleep restfully or direct proper attention to the things in your life which require it.
Avoidance
A classic symptom of financial stresses affecting mental health is an increased avoidance of financial matters, as well as of external relationships and events. The former is quite obvious. We may begin to avoid opening bills, looking at our bank accounts, or concerning ourselves with the day’s takings. This is because we’re trying to protect ourselves from taking on even more worry. The latter is less obvious but makes perfect sense. We avoid going out with friends for dinner or to events because, subconsciously, we’re trying to spend less money, even though these types of social interactions are crucial for good mental health.
Reckless Spending
Ironically, you may find that you begin to spend more money than you know you should, either in greater quantities and/or more frivolously than you did when your financial difficulties were lesser. Excessive spending can be a symptom of mania, though more commonly is linked to “retail therapy”. This is the act of trying to improve our mood by buying unnecessary things.
Hopelessness
Financial stresses may make you feel hopeless with regard to the future. Hopelessness, alongside a lack of motivation, a lack of enjoyment in life, and a lack of concentration, are all symptoms of depression. Money and Mental Health Policy Institute states that people with depression and problem debt are 4.2 times more likely to still be exhibiting symptoms of depression after 18 months than people without problem debt.
Insomnia
Stress about money never stops, does it? We work all day trying to avoid or alleviate the problem, only to go to bed and lie awake, unable to sleep because of the situation. If you’re experiencing insomnia, as well as thoughts about money when you should be sleeping, this is a clear sign that you are probably experiencing poor mental health as a direct result of money trouble.
Unhealthy Coping Methods
To “deal” with financial stresses, it’s common to turn to unhealthy coping methods such as alcohol and drug abuse, or excessive and/or unhealthy eating. In the short term, it may feel as though these methods help to numb the feelings of anxiety and depression associated with your money troubles. But, they in fact only feed into a vicious cycle of poor mental health and a poorer financial situation.
Physical Illness
Mental illness related to financial stress can also manifest itself in physical ailments such as headaches, drowsiness and stomach aches. If you’re experiencing any of these, especially in addition to any of the aforementioned symptoms, then it is likely financial stress is negatively affecting your health.
How to Look After Yourself Better and Learn to Cope With Your Money Stress
According to the UK’s mental health crisis and suicide helpline, Samaritans, work is the number one cause of stress in the UK, closely followed by money. Thus, for the business owner or freelancer, chances are that their stresses are compounded day in, and day out, by the work they do and the money they must make from it.
It is therefore absolutely crucial that you learn how to practice self-care. Also, its important to learn how to cope with your financial stresses in a meaningful, proactive and beneficial way. Doing so, you may even find yourself saving money and improving your income stream.
Step 1 – Address Your Mental Health
You are more important than your bank balance. Though it may be hard in our society to believe this, it is true. Thus, it’s important that before you begin trying to tackle financial difficulties on your own. You first need to reach out to others and address your own mental health.
Talk to Someone
British people are not known for their openness. If anything, those of us dealing with financial stresses in England, Scotland and Wales are more likely to bottle everything up. We believe either that we should be ashamed of our financial situation, or that it is unbecoming of us to bring our worries to someone else’s attention.
However, talking to someone about your mental health is a fundamental first step in the journey to recovery. The old adage “a problem shared is a problem halved” is, after all, not just a pretty saying. According to a study carried out by Age UK, at least a third of people who share their worries with others feel more optimistic as a direct result.
Whilst talking to someone about your financial stresses isn’t guaranteed to solve them, it is almost always a good idea. Saying out loud the words running around your head can make them feel much less catastrophic, and much more manageable, than before.
Seek Professional Advice and Assistance
Mental health is just as serious as physical health. Though we in the UK may not have been brought up to openly discuss our mental health, that trend is thankfully changing. It’s important that you seek the same level of professional advice and assistance for your mental health as you would for any physiological symptoms.
Our National Health Service should typically be your first port of call. Our NHS offers a wide range of helpful services to aid you in dealing with your financial stress specifically. For more general mental health matters, contact your GP to discuss coping methods, medication, and counselling or therapy. If you have the means – despite your financial difficulties – investing in private counselling may also be worthwhile.
Exercise, Eat Well, Avoid Excessive Alcohol and Drug Use
Some of the most simple things we can do to improve our mental health are also some of the most effective.
Diet
A healthy, balanced diet is not just a catchphrase used by cereal manufacturers. It’s actually integral to providing your body with the right kind of energy and nutrients it needs to perform at peak efficiency. “You are what you eat”, they say, and this is true for mental health. The better you eat, typically, the better you feel.
Exercise
Motivation is one of the first things to go when our mental health starts to slip, which is why it can be really difficult to maintain a healthy routine. Nevertheless, try your best to make exercise a regular part of your week. Find something you enjoy and which isn’t daunting and stick to it. This can include swimming, running, playing team sports, or doing yoga at home.
Avoid Substance Misuse
It may feel good, in the short term, to use alcohol or recreational drugs to escape the financial stresses mounting around you. However, doing so will only increase those stresses in time, and do greater damage to both your physical and mental health. If you’re struggling with substance misuse or alcohol misuse, try using these resources.
Step 2 – Address the Root of Your Financial Difficulties
Once you’ve begun taking better care of your mental health, you’ll hopefully be in a better place to start tackling the root causes of your financial stress.
Here, we dive into three of the most useful things you can do to regain control of your finances, and thus lessen your stress about money.
Learn How to Budget Better
Financial difficulties most often stem from a lack of foundational knowledge in accounting and budgeting. Simply put, we don’t understand how to make our money work best for us and our businesses. So, we spend more than we should, whilst saving less than we can.
Establishing a weekly or monthly budget – either for your personal finances or those of your business – should be your first priority when addressing your financial stresses.
- Firstly, stop avoiding your debts. Look at them, make a full list of them, and triage them according to which must be paid off first, and which have the highest interest rates.
- Secondly, examine your monthly outgoings. Are there ways to save money by changing suppliers, or shopping elsewhere?
- Thirdly, look at your income. Is there any way you could increase this? Perhaps pursuing bigger clients as a freelancer, or refreshing your product line as a business, may fuel your financial growth.
- Lastly – just as we suggested for treating mental health – seek the advice of trusted professionals in your area.
This brings us to…
Pay Less Tax
Paying taxes is surely one of the greatest financial stresses. For business owners, making sure you remain compliant with HMRC’s strict rules can be anxiety-inducing. Whilst the tax you end up paying can feel crippling, especially to SMEs. To independent contractors, the same is true. Self-assessment tax returns can be a nightmare to fill in, comply with, and make the most of.
Ultimately, many companies across England and the rest of the UK, as well as local freelancers, sole traders, retirees and owners of Ltd. businesses end up paying more tax than they need to. Without a proper understanding of expenses, and allowances such as capital gains, marriage, personal and dividends allowances, you could be throwing away money which is rightly yours.
Learn how to pay less tax, and there’s a good chance that a large chunk of the stresses you carry could be instantly reduced.
Invest in Quality Accountancy for Yourself or Your Business
Personal and business accountants and tax advisors are experts in saving you money, whilst ensuring that you comply with HMRC rules and regulations. What’s more, you don’t have to be a mega-corporation for them to be effective or affordable. Accountancy firms tend to charge a flat rate based on the particular needs of you or your business and can end up costing as little as £50 per month for basic services. Whilst spending money on professional tax advice may seem counterintuitive at first, consider the fact that doing so will likely save you money in the long-run. Thus making an investment in expert accountancy services not only worthwhile but wise.
A Final Thought on Coping With Money Worries
Money stress affects us all. When they begin to affect our mental health, it’s crucial that we seek help, and aim to tackle the root causes of our stress about money. By doing so, we can improve our own health as well as our personal and business finances. Look after yourself, and let accountancy experts look after your money.
