Hands holding some coinsMoney and financial issues can be significant sources of stress for people. A person's problems with money may produce such overwhelming negative feelings and self-criticism that his or her mental and physical health can be adversely affected. Financial distress can also have negative effects on a person's relationships and family life. People who are experiencing financial issues may benefit from meeting with a mental health counselor or financial therapist who can help them cope with difficult feelings and stress, treat underlying mental health conditions, or change troubling behaviors.

Types of Financial Problems

Money problems come in various forms, and what one person considers a financial burden or concern may not be troubling to another person in a different situation. Individual wealth and income also vary widely between people based on a multitude of factors. Some of these factors can be controlled by an individual—such as job or career choice—and some cannot, such as institutional oppression. Additionally, people develop unique beliefs and values around money that are shaped by personal experience, culture, education, and more. There is no single "right" way to earn, spend, or save money.

Financial situations that people commonly report as stressful or troubling include, but are not limited to:

  • High levels of debt and insufficient funds to pay off the debt
  • Unexpected loss of income or assets
  • Increase in financial responsibilities, such as costs associated with caring for a new child or sick family member
  • Differences in spending habits or values between people who share income
  • Compulsive spending or gambling
  • Bankruptcy or foreclosure
  • Poverty

Some potential financial issues are linked directly to an individual's personal choices, such as the mismanagement of funds, lack of financial planning, making impulsive financial decisions, compulsive shopping that fills an emotional need, gambling, consistent overspending, or chronic underspending. In other cases of financial distress, personal choice is removed completely. For example, individuals who have trouble paying household bills due to a floundering national economy, and victims of financial crimes such as credit card fraud and identity theft may experience high levels of anxiety in the face of financial crises that are largely out of their control.

Money Problems and Mental Health

While current research has not explicitly identified debt and financial issues as causes of poor mental health, data does suggest a strong link between both issues. For example, a meta-analysis of 65 mental health studies involving close to 34,000 participants indicates that people in debt are more than three times as likely to experience mental health issues than people who are not in debt. Individuals with overwhelming financial issues are also at greater risk for depression, alcohol dependency, drug dependency, psychotic issues, and suicide completion than individuals who are free from financial stress.

Conversely, certain mental health conditions may put a person at increased risk for developing financial problems. In particular, mental health conditions that affect a person's mood or behavior—such as depression, bipolar, or attention-deficit hyperactivity—have been linked with money management issues. People who are dependent on drugs or alcohol may deplete their income paying for their addiction, may have difficulties maintaining a job, and are also more likely to engage in risky financial ventures. Additionally, people coping with ongoing mental or physical health issues may experience financial problems due to the costs associated with paying for their health care.

During periods of economic hardship, families may lose their jobs, homes, vehicles, savings, insurance plans, retirement funds, personal belongings, and other valuable assets. Such losses can have a profound impact on the emotional and psychological well-being of families. The change in circumstances from having "something" to having "nothing" can be emotionally devastating, often triggering intense feelings of grief, sadness, worry, fear, or shame. A lack of funds can also lead to potentially detrimental lifestyle changes, such as consuming unhealthy foods or substances, diminished personal hygiene, or limited access to education. Under these circumstances, family relations can deteriorate and lead to negative mental or emotional consequences for individuals within the family.

Common responses to severe economic hardship can include:

  • Anxiety or depression
  • Intense grief

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  • Detachment
  • Substance dependency, such as alcoholism
  • Erratic sleep patterns
  • Chronic overeating or under-eating
  • Overwhelming stress or panic
  • Physical complaints such as tension, nausea, or chronic pain

If a person lacks enough money to cover the costs of food, shelter, health care, and other basic necessities, he or she may face an increased risk of illness, injury, or even death.

Poverty and Mental Health

Though poverty does not directly cause mental health issues, it can greatly increase a person's risk of encountering mental health difficulties. About 31% of people living in poverty have been diagnosed with depression, compared with just 15% of those who do not live in poverty. The lower a person's socioeconomic status, the more his or her risk of experiencing mental health issues increases.

Life in poverty reduces access to quality medical care, which can mean impoverished people don't seek treatment. They may also not get the cutting-edge mental health treatments to which middle class people have access. But the connection between poverty and mental health doesn't end with access to health care. The experience of living in poverty is highly stressful, potentially exposing impoverished individuals to ongoing trauma. From losing a home to struggling to find a safe place to live and sleep, the daily concerns of life in poverty can erode psychological well-being. Lack of access to quality food and to safe living conditions may further undermine both mental and physical health.

Therapy and Financial Issues

Therapy can help alleviate the strain of financial issues, and may even help eliminate the financial burdens themselves. Therapy can help people evaluate whether their spending habits are unhealthy or their attitudes about money are the product of problematic lessons learned in childhood. For instance, a person may have learned in childhood that stress or anxiety can be alleviated, albeit temporarily, by going on a shopping spree, because that was the technique employed by his or her parent. Between 2% and 5% of Americans struggle with compulsive spending. Identifying the emotional need that is met through shopping is the first step toward reining in that habit—a therapist can help a person discover the source of the need to spend and develop better coping tools that will help him or her maintain financial health.

Working with a Financial Therapist

Most therapists are able to help address the psychological and emotional consequences of financial issues, but sometimes therapists elect to specialize in financial issues, becoming certified financial therapists. Although a financial planner may focus on hard financial figures without giving due consideration to an individual’s attitude toward money, most financial therapists will pay keen attention to the emotional and psychological aspects of a financial issue without talking numbers. A financial therapist takes both perspectives into account and tries to reveal the underlying emotional and psychological triggers that may influence a person to make poor financial decisions.

Although several professional associations offer accreditation in financial counseling, the main provider in the United States is the Association for Financial Counseling and Planning Education (AFCPE). In addition to meeting the education and experience requirements, financial therapists must also pass an accreditation exam and submit letters of recommendation attesting to their competence before they receive certification. To ensure the maintenance of high professional standards, accredited financial counselors (AFC) must complete 30 continuing education credits every two years.

Financial therapists educate people in therapy about sound financial habits, help them to overcome debt, and provide needed social support. Individuals undergoing treatment are able to realize their financial goals as they learn how to identify ineffective money management strategies, and change them into more productive behaviors. In addition to improving financial health, these therapeutic approaches also help alleviate stress and anxiety, thus fostering improved mental health for people with financial issues. Many certified financial therapists work closely with traditional financial advisers to provide a more holistic approach to a person in therapy.

Finding Affordable Treatment

If you are experiencing financial difficulties and are looking for cheap or affordable treatment, you do have options. The cost of mental health services varies widely between different locations and providers, so you will likely need to do some research to find the best option for you in your area.

In the United States, insurance plans are now required to cover mental health treatment, though an insurer's criteria will vary. Speak with your insurance provider for details. Many private practice therapists accept insurance, and some may offer reduced or sliding scale fees for people who have low incomes. Infrequently, some therapists take on a number of clients pro bono and provide them treatment at no cost. Additionally, local communities often have nonprofit mental health centers that offer low-cost services or cater to people who have Medicaid or Medicare. If you are a student, your college or university may offer free or discounted therapy services with the school's counseling center, covered by your tuition fees.

Case Example

  • Underspending affects family life: Miguel, 32, is a chronic underspender and actively keeps track of his family's cash flow. Miguel's dedication to saving money results in his family living well below their means and often compromises the safety of his loved ones and himself. Miguel drives a car that does not meet modern safety standards, eats only one meal per day, and routinely delays in making structural repairs to the family home—all in a desperate effort to save money. Deeply frustrated, Miguel's wife encourages him to seek the help of a certified financial therapist. In therapy, Miguel explores the reasons that fuel his extreme underspending and is able to recall and gradually come to terms with the abject poverty of his childhood. Having identified the underlying cause for his behavior, Miguel now seeks more productive money management strategies. After six months of therapy, Miguel reports better physical and mental health, as well as a happier family life.


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