Mental Health and Finances

With Christmas fast approaching, I thought it would be a good time to discuss Mental Health and Finances; and how the two can impact on one another.

Different Levels of Poverty

It is important to realise that there are different types of poverty; both of which can have a negative impact on a persons mental health and wellbeing. These types are known as ‘Absolute’ and ‘Relative’ poverty.

Absolute poverty is when a family, or individual, does not have enough income to cover their basic needs. Examples of this would be:

  • Not having access to safe shelter
  • Not being able to afford enough food
  • Not being able to afford gas and/or electricity
  • Not being able to afford toiletries
  • Not having access to important facilities such as health facilities and education

Absolute poverty is measured by income. If an individual or a family earn below 60% of minimum income standard (inflation-adjusted), then they would be classed as living in absolute poverty.

Relative poverty changes based on context and based on their economic climate at any one time. This is when a family or individual earns 60% of the average household income for their area, but are unable to provide more than the basic needs (house, bills, food, water, health services etc). These people do not have access to the same opportunities and activities that average earners have access to.
For example, they can afford three meals a day, but cannot afford to pay for their child to go on a school trip, or afford new clothes for an event, or go out for food with family/friends. They can simply afford to live.

How Finances Can Impact Mental Health

Struggling with money is never easy. Whether it be short-term or ongoing, or whether it be absolute poverty or relative.
Both forms of poverty can lead to depression and other mental health conditions. Both can have a negative impact on relationships with those around us and can be difficult to talk about.

Financial struggles often come with feelings of guilt, shame, stress and sadness. One may feel guilty for not being able to provide gifts for others for birthdays/Christmases, they may feel embarrassed to ask for help/support and they may feel stressed as they try their best to save for the things that they want/need. All of these feelings can lead to poor mental health; especially if they are long-term.

How Can Mental Health Impact Finances?

Various mental health conditions can intervene with the ways in which a person manages their finances.
For example, a person with bipolar, going through a manic phase, may lose control of their spending. They may make impulsive decisions which can lead to a high level of spending; which they may later regret and feel guilty for as their state of mind changes.
A person with depression/anxiety may avoid checking their bank account or opening important letters in regards to their finances, and as a result could end up in a poor financial state.
Some may also spend money as a way of trying to cheer themselves up, and while this may work in the moment, it is often short lived; which can lead to additional purchases.

These are just a couple of examples into how mental health can impact on finances.

Christmas and Finances

Christmas is fast approaching and can be a very stressful time for people who struggle with their mental health and finances. Some may not look forward to buying gifts for others as they know that it will have a poor effect on their funds for the rest of the month. Some may not be able to afford gifts at all and may feel guilty when receiving gifts from others, and may come across as ungrateful, although that is not necessarily the case.

Please remember to be extra kind to one another at this time of year and remember that Christmas is about much more than giving and receiving. Try to be more open minded, remember that you never truly know what another person is going through.


NHS – Financial Worries

Mind Charity – The Link Between Money and Mental Health

End Poverty – Relative and Absolute Poverty

Big Issue – UK Poverty: Facts, Figures and Effects

Joseph Rowntree Foundation – What is Poverty?

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