Money and Mental Health

Amanda Kruger, LPC on Aug 12, 2022

Money and mental health are so interconnected. We don’t consciously connect them very often, but the impact our money has on our mental health and vice versa is very strong. When our mental health is poor, we are more likely to spend impulsively and earn less than when our mental health is strong. Forces such as addiction, low self-esteem, depression, OCD, relationship conflict, and fear are often reflected in our bank statements. Likewise, when we are in a positive mental state, many of us feel better about asking for a raise, more in control of our spending, and less like we need to compensate. This issue applies to the impoverished as well as the wealthy and anyone in between. The way we grew up with (or without) money impacts how we view it today. For many, this means attitudes about money never sticking around for example. For others, money reminds them of family expectations or feelings of their own inadequacy in managing or making it. The ways to think about and interact with money is deeply rooted in our mental health.

Financial Stress and Mental Health

Many people report one of the most stress-inducing areas of their lives is their finances. Many, many people have money on their minds much of the time. Being overly stressed is never good for our mental or physical health, and when it's stress about money, it's not good for our money relationship either. This stress encompasses much more than worrying that you won’t make rent this month. Financial stress can include worries about the future and security for family, debt, not being able to take needed time off work, being trapped in an unhealthy environment, shame associated with asking for assistance, insecurities, and baggage that can be attached to money. Worrying about money can deteriorate mental health. This creates an ugly cycle of financial stress which leads to poorer mental health, and that leads to worse money management and more financial stress.

Mental Health and Money Management

When someone is experiencing a mental health challenge, their ability to make and manage money is directly impacted. Stress, conflict, impulsivity, addiction, hopelessness, low motivation, avoidance, executive dysfunction, and shame are just a few of the mental health symptoms that can impact how someone manages their finances and their ability to do it successfully. This is made even worse when someone needs to take time away from work to seek healthcare or recover. Our mental wellness also influences the thoughts we have around ourselves and our finances. Limiting and pessimistic thoughts usually lead to poorer financial choices.

Many mental health symptoms are not kind to our checkbooks. Impulsivity associated with anxiety, trauma, personality disorders, bipolar disorders, ADHD and mirriad of other challenges often leads to overspending and blowing our budget or making instantly gratifying decisions instead of thinking about long term gains. Overspending can also be a way to self soothe in the moment, but comes with regret shortly after. There is often even deeper, subconscious activity that influences what we do with our money. Beliefs we might have about ourselves and the world can influence whether we feel we deserve money or whether we have the capacity to manage it well. This article barely scratches the surface of mental health issues and their impact on finances. More severe mental health issues, such as psychosis, likely will have more severe financial consequences. Usually, when these underlying issues and beliefs are treated, people gain better control over other areas of their lives including money,

Mental Health and Earning Potential

These mental health concerns also have a major impact on earning potential. When these issues are severe and untreated, they can be paralyzing. This can create challenges in getting and holding a job. If a job is secured, these issues can create challenges in attaining promotions and raises. People who have poorer mental health tend to have lower paying positions as well. This is because the skills needed to attain these positions - timeliness, self advocacy, performance, attentiveness - can be really reduced by mental illness. Sometimes people are so taxed by managing their mental illness, they have no energy or resources left for work. Another common issue is the thoughts and mindset someone has. If you believe you can’t make a lot of money or maintain a job, or start a business, or ask for a raise, you probably won’t. Again, that subconscious sneaks in and cuts us off at the knees. A lot of people feel they don’t deserve financial stability or they believe they are incapable of achieving in this way or they weren’t lucky enough to secure one. At the end of the day, the better one’s mental health is, the better they are going to be at making and managing money.

Complex Relationships with Money

Angst over finances doesn’t end with people who lack the mental wherewithal to find high paying jobs. Many people who are successful in making money themselves or have been surrounded by money their whole lives also know the stress that comes along with it. It can be really, really hard to manage money well when you lack financial education, when your subconscious thinks that you can’t, or when you have complex feelings about where this money came from. Sometimes, inheritance can be one of the most complex and challenging sources of financial benefit. People often feel conflicted about how this money was made or about receiving it because of the death of a loved one. Similarly complicated is family money. Many of us imagine it would be nice to be “born into wealth,” but what we don’t realize is all the baggage and expectations that come along with this. Having money or making money doesn’t necessarily equate to a healthy relationship with it.

Money and Self-Esteem

Much of the time, finances and self esteem are linked. Many people feel insecure about their finances. They might feel shame about the amount of money they make, how they manage it, how they make it, inheritance, debt, feelings of unworthiness and imposter syndrome, workaholism, and so much more. Our culture tells us, we are supposed to make a lot of money and be really good at knowing what to do with it. However, there is such little attention given to financial education. Like many of the contradictions in our culture, you are supposed to be “good at money,” but not too good. Be rich and have nice things, but don’t be a snob. Don’t let the money change you. Going into debt is shameful, but failing to keep up with consumerism is also shameful. Also, you shouldn’t really want the money - don’t do it for the money, but still be good at being “rich” anyway. Wanting money is greedy and glutinous. All of this, and there is very little basic education to help you figure it all out. - no wonder our money relationships are screwed up. The way we feel about ourselves is so impacted by the way we feel about our success. In one way or another, money says something about the successfulness of each of us. Some of us are successful at making money, some are successful at surviving without money, some pride themselves on not caring about money - despite what we want to believe, our money relationship says something about us.


Likely the biggest source of our money anguish (and a lot of anguish in general) is comparison. It’s nearly impossible to escape this. It is human nature to look around and notice. One of those things that we notice is how well off other people appear. No surprise, our culture is very consumeristic - this doesn’t help the whole comparison issue. We are constantly bombarded with images and advertisements that are made to make us feel crappy for what we don’t have. Sometimes this is great hair, or vacations, or cars, or meals. These ads would love for you to believe that money is the main thing that can fix all these issues. They are supposed to make you feel crappy or wanting so you’ll spend - it’s not your fault, it's just psychology. This gets worse when we see real life people that have what we don’t. Many. many people default to comparison and judgment. When this is what has been programmed into your brain, it is really hard to avoid and hard not to take personally. The fact is, money is not personal. It’s just energy (more on that here). You also have to keep in mind that people can be really good at appearing wealthy while accruing massive debt and dissatisfaction.

Being dissatisfied with our finances is very common, but doesn’t have to ruin our money relationship. Many, many people experience “buyer’s remorse.” You’d be hard to find a person who has never experienced some type of regret after a transaction from time to time. The issue arises when our regret and disappointment with ourselves or our money damages the relationship. Shame over debt caused by frivolous spending or accrued through a painful divorce can be a consistent reminder of the ways we feel we have failed. This can bring up all kinds of mental health problems including depression, anxiety, and low self esteem. The key to making peace with this is reframing and overhauling our mindsets.

Money Mindset

Money mindset is what someone believes about money. What we believe influences our thoughts, those influence our choices, those create our lifestyle. If you believe that “money is the root of all evil” or “I can never hang on to money,” it is going to have an impact on how you interact with money. We pick up a lot of these beliefs in early childhood before the subconscious is totally formed. Then they stick with us until we become aware of them and work to change them. These are what we call core beliefs. This is where financial therapy can really help. Identifying and changing these beliefs can make a huge difference in how we see the world and ourselves.

Financial Trauma

For many people, these core beliefs are also formed through trauma. Trauma is an event that occurs in a person’s life that rocks their understanding of the world. Financial trauma rocks our ideas about money. This can look like bankruptcy, poverty, eviction, food insecurity, financial abuse, an economic recession, psychological abuse, and so much more. It is estimated that one in four Americans experiences financial trauma. In recent times, this issue has disproportionately impacted younger generations. Around one in three millennials have experienced financial trauma.

EMDR is a great resource for resolving some of this financial trauma as well as other traumas. It can also help establish healthier core beliefs.

Mental health is so, so impacted by money. From being able to afford mental health care to being able to manage money in an effective way, our money and our mental health are intertwined. Seeking mental health services to help address negative core beliefs, trauma, ADHD, bipolar, and any other mental health concerns often makes a huge impact in our satisfaction with our lives overall. My hope here at Copper Well is to help people heal some of those financial wounds, insecurities, and shame so we can all have a little more peace. Thanks for reading through this post. Please, please reach out with any comments or questions.

Amanda Kruger is a Licensed Professional Counselor in Denver, CO.

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