May 17, 2023
Financial stress and mental health are connected at the hip. We share advice for improving both from a mental health practitioner and a Licensed Insolvency Trustee.
Your mental health may be more tied to your financial situation than you think. Perhaps that shouldn’t surprise us though.
Almost half of Canadians (48%) say they have lost sleep because of financial stress, according to the Financial Planning Standards Council (FPSC). And the longer the financial stress lasts, the more likely it will start to affect our mental health. So, what are the best and most practical ways of dealing with this problem?
Talking about financial stress with the right people really helps. Want to hear two professionals discuss the relationship between mental and financial health and how to best handle both? Listen to our podcast.
Some people will feel stress logging into their online banking app to check their balance, others might experience it when making a large purchase, or paying a bill. Some people also feel stress when they compare themselves to other people.
But at the root of any source of financial stress is feeling like you don’t have enough.
Chantel Chapman, Co-Founder of The Trauma of Money, which offers courses that bridge the gap between finances and mental health, points to the “psychology of scarcity.”
The psychology of scarcity is another way to look at the mindset of someone who doesn’t have as much money as they need to meet their financial obligations.
“If someone is in financial scarcity, it impacts their ability to set long term goals. Things like budgeting become very hard,” Chantel says. And when budgeting and planning become stressful, it can be hard to find a way out of financial stress.
When money is tight, it’s not only stressful, but it can also feel like you’re trapped in a really vulnerable spot.
It’s what Chantel calls a “scarcity tunnel.” A scarcity tunnel is like having tunnel vision on all of your financial limitations. It forces people to focus on pressing short-term issues and, as a result, struggle implementing a financial plan for the future.
“If someone says, ‘I’ve got all this debt. It’s going to take five years to pay it off, but I can’t even pay my rent.’ What they’re going to want to address is how they can put out that immediate fire,” Chantel explains.
People who identify with financial vulnerability often feel guilty about their situation, overwhelmed by their finances, and alone. Part of being in the “scarcity tunnel” is that many people feel abandoned.
The very idea of doing any kind of financial planning can cause nausea for some, and it’s understandable. It’s hard to confront your financial reality when your primary objective might be affording the essentials and surviving the week.
For anyone struggling with these issues it can be hard to know what to do. There are many ways to move forward and improve your mental health while still dealing with your financial worries.
One of the most common emotions for people with debt is shame. Many people feel that because they have debt that they have failed, or it makes them a bad person. This isn’t true, but it’s often how people with debt see themselves.
“Shame can become an identity,” Chantel notes, adding that people with debt can feel like “they’re in this vacuum of isolation.”
Jeff Lewis, a BDO Licensed Insolvency Trustee, helps many people who reflect this type of thinking. They say things like, “I bet you’ve never seen this before,” or “I messed up, it’s all my fault.”
In order to remove shame, we have to find acceptance Chantel says. People need their feelings validated and for someone to really listen, show empathy and belief that their debt problems don’t define them.
In his role as a trustee, Jeff always asks people to tell him their story. “I ask them to tell me the journey that got them here. And the story is always different from person to person, and I’m there to reassure them that they are not alone and that many people find themselves in the exact same situation, for all sorts of reasons.”
Shame about money often leads to another problem which causes people to sink further into debt.
Financial avoidance is when people avoid dealing with their financial obligations for a variety of reasons such as guilt, shame, or lack of financial literacy. Chantel says she often meets with people who have avoided engaging with their financial situation and feel great anxiety at sitting down to do something like a budget.
Her suggestion is that people start small and sandwich support for your nervous system. Buffer your financial tasks with things that comfort you. If you’re starting a budget, do it for 5-10 mins then take a break for the same length of time before going back to it. It’s also important to be in the right mindset to do it she says, not when you’re already stressed.
If your mental health is being severely affected by money issues talking to a professional can help you regain control of both your health and finances.
Talking to someone who understands financial stress, listens to you without judgement, and lays out all your options is a chance to change your mindset about your debt. Rather than seeing it as a stressful problem, you’ll instead see solutions.
“When I tell people the solutions and what we can do to help them the most common response I get is ‘I wish I’d come to see you two years ago,’” Jeff says.
We’re here to help you find a pathway to deal with your debt. And you talk to us for free.
May 17, 2023
Financial stress and mental health are connected at the hip. We share advice for improving both from a mental health practitioner and a Licensed Insolvency Trustee.
