Mental Health & Your Money
May is Mental Health Awareness Month! As someone who has struggled with mental health and who is married to a mental health counselor, I wanted to talk this month about mental health and how it can impact your finances. This document is not medical advice & if you are experiencing any struggles with your mental health please seek the appropriate mental health professional’s help. With the disclosures out of the way, lets dig into mental health and how it can affect our finances.
It is no surprise that mental health has been an increasingly popular topic. The rates of depression and anxiety in the United States are on the rise and the former taboo around mental health has slowly faded, allowing more people to share their experiences with mental health struggles. As someone who has struggled with anxiety and tendencies toward depression, I was previously judged in a workplace for my anxiety, which culminated in a panic attack I had in a meeting. This was 5 years ago, and I am grateful that I have gotten help from a doctor and no longer am employed at the firm where this took place. Many pundits have spoken about what some call the “mental health crisis”, occurring today. One of my favorite speakers on the topic is Bishop Robert Barron, who offers a unique spiritual approach to the problem. Beside that point, many people in the field of behavioral finance have looked into the connections between mental health struggles and money. This has even led to a new field of practice in finance called, “financial therapy, in which a therapist who is also trained as an advisor will discuss memories, preconceived notions, and paradigms their clients’ have about money. I am not a financial therapist, but in reading the work of those with that title, I have gathered some interesting insights I can share with my clients about how their money and mental health work together (or not so much).
One of the first things I have seen financial therapists, and therapists in general start with, is how a person’s upbringing affects their paradigms. My wife, as a therapist, will often ask her clients about their upbringing and look for repeated behaviors that are acted out of past conditioning. You can do the same thing with yourself and your money. Examine your past, was money always there? Or was there not enough of it to go around? Did your parents fight about money? Or was it impolite to talk about money in decent conversation? These questions can help us start to understand why we treat money the way we do, and whether those old notions need to be kept, or done away with.
You may come to find that you have preexisting beliefs about money that are holding you back from achieving financial success. The best thing to do in this situation is to address the thought and use what my wife calls, “cognitive behavioral therapy” which includes thinking about the thoughts you have (metacognition) and finding new, better thoughts to replace them with. I will attach some worksheets for you to complete at your own pace to this email which can help you identify and replace negative thoughts. The two major paradigms I see acted out in peoples financial lives are either that money is too scarce, which leads to over saving & being to financially conservative, or that money is too fickle, which leads to the over spending (spend it while you got it) mentality & being to financially liberal. Both of these can be addressed with your advisor in your financial plan. By making a concrete plan about how you plan to spend and use money, you can determine if you are over saving out of fear, or over spend out of a feeling of never being able to get ahead. This way you can strike the balance between enjoying today, and planning for tomorrow.
Finally, I recommend all of my clients take care of their mental health and if necessary, evaluate talk therapy or medication. Many people put off talk therapy because it is, “too expensive”, however I would reframe this from an expense to an investment in yourself. Remember, you are the most important asset in your financial plan. Without you, nothing else can be accomplished!