Mental Health and Money: A Two-Way Street
Mental health and money are deeply intertwined. One affects the other in powerful and often cyclical ways. For many people, financial stress leads to anxiety, depression, and even physical symptoms.
Poor mental health can hurt decision-making. It can lower productivity and raise the chances of financial mistakes. Understanding how they interact can help break the cycle and lead to a healthier financial and emotional life.
Which Comes First: Financial Stress or Mental Health Issues?
It’s a bit of a “chicken or the egg” question, and the answer is: it depends.
Financial stress is a leading cause of anxiety and depression. Worrying about bills, debt, or job security can be overwhelming.
A study by the American Psychological Association found that money is the biggest source of stress for Americans. It often causes more stress than work and personal relationships. Chronic financial insecurity can trigger a stress response that doesn’t go away—and that’s where the damage starts.
On the other hand, mental health issues like depression, ADHD, or anxiety can make it harder to manage money well. Someone battling depression might lack the energy or motivation to pay bills or review their budget.
A person with anxiety might avoid checking their account balances entirely. The result? Missed payments, accumulating debt, and worsening financial stress—creating a vicious loop.
The Brain Chemistry Behind Money and Mental Health
There’s also a biological link between financial well-being and mental health. Money activates the brain's reward system, specifically the neurotransmitter dopamine. Dopamine is released when we experience something pleasurable—like earning a bonus or paying off debt.
That rush of dopamine can feel nice for a while. However, chasing it through shopping, gambling, or taking risks can lead to bad financial choices.
Meanwhile, chronic financial stress triggers the release of cortisol, the body’s primary stress hormone. Cortisol is helpful in short bursts—it gets us out of danger. But when it remains elevated for long periods (as it does when we’re constantly worried about money), it can damage brain function, particularly in areas that govern focus, memory, and decision-making.
Getting Help: Breaking the Cycle
Whether mental health issues or financial stress come first, the key is recognizing the problem and reaching out for help. It's okay to admit that money can cause emotional stress. It's also normal for mental health issues to impact financial choices.
Here are a few practical steps to consider:
Talk to someone. That could be a therapist, a financial advisor, or both. A therapist can help unpack the emotional baggage that might be tied to money. A financial professional can help create a financial plan that may help reduce uncertainty.
Build a financial routine. Making and following a simple routine can help you feel more organized. Weekly check-ins, automatic transfers to savings, and budgeting apps can reduce stress.
Avoid financial isolation. It’s common to feel shame around money troubles, but isolation only makes things worse. Confide in a friend, join a support group, or seek community resources.
Mind your mindset. Cognitive behavioral therapy (CBT) can help change negative beliefs about money and self-worth. This can lead to healthier habits and better results.
Bottom Line
Mental health and money are tightly linked, each capable of lifting—or sinking—the other. By learning about the links between chemicals and emotions, you can take steps to manage both.
This can help you build a more stable financial future. It can also lead to a healthier and stronger mind. No matter if you seek counseling, create a budget, or just start talking, the key is to begin.
Sources:
https://pmc.ncbi.nlm.nih.gov/articles/PMC8806009/
Disclosures:
This information is an overview and should not be considered as specific guidance or recommendations for any individual or business.
This material is provided as a courtesy and for educational purposes only.
These are the views of the author, not the named Representative or Advisory Services Network, LLC, and should not be construed as investment advice. Neither the named Representative nor Advisory Services Network, LLC gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your Financial Advisor for further information.
