Finances can affect mental wellbeing

Our financial habits play a big part in our mental health.

If you’re concerned about how to make ends meet, settling your credit card debt or how you’ll feed your family, it’s likely you’ll find yourself in a negative head space.

These were the findings of a 2015 CNBC article.

The author states: “Statistically speaking, household income is strongly related to both emotional wellbeing and a person’s evaluation of their own quality of life.”

According to this view, a higher income can, in fact, lead to a significant reduction in negative emotions (sadness, hopelessness and anxiety) and improve overall mental wellbeing up until a point: an annual salary of R1 million.

After that, the psychological benefits of a higher income are much less significant.

We are not just referring to surface-level happiness.

Studies have found it’s likely there is a direct correlation between an increase in income and a reduced incidence of serious mental illnesses.

Security and happiness

Everyone wants to feel they can provide for their family.

Anyone who has experienced financial insecurity knows that kind of stress can trigger anxiety, panic or depression.

If you have more debt than you can easily pay off or you don’t know how you’ll feed your family from month to month, it will affect your mental health.

The only exception to this is a mortgage. A 2004 study published in

Housing Studies found that homeowners have lower levels of psychological distress compared to renters. Of course, a mortgage only lowers the risk of mental health if mortgage payments can be paid without strain.

Empowering

Being aware of the link between financial and psychological stress might help you better monitor your financial and mental wellbeing and set you on a path to greater health and happiness.

If you do take out a loan or sign up for a credit card, do so for the right reasons and ensure you can meet your commitments without stretching yourself financially.

Homeowners have lower levels of psychological distress than renters ... providing they can make mortgage payments without strain.

Housing Studies