Money and Your Mental Health

Many people believe that managing their money is only about math, but did you know that your mental health is related to your money too?   

Financial stress affects people of all ages and income levels, and it can take a toll just like many of life’s other stressors.  It can impact your sleep, your health, your relationships, and your effectiveness at work.  Likewise, poor mental health can make it more difficult to manage your money effectively and maximize your earning potential. 

Some of the areas people worry about may include: 

• Managing household expenses – especially unexpected ones 

• Dealing with high levels of debt 

• Living pay cheque to pay cheque 

• Struggling to save 

We know that some of the ways we can improve our mental health include pursuing a healthy diet, exercising, connecting with others, and seeking professional help.  But how can you take control of your finances and reduce your stress in that area? 

• Track your spending – understanding where your money is going allows you to make more mindful choices about how important certain items really are to you. 

• Consolidate your debts and minimize interest costs – consolidating high-cost credit card debts into a single payment on a lower-cost line of credit or even your mortgage can reduce your interest costs and payments, allowing you to focus on paying down a single debt rather than trying to juggle debts on multiple fronts. 

• Start an emergency fund – regularly setting funds aside for unwelcome surprises can help make it easier to manage costs and prevent you from having to carry balances on credit cards or lines of credit. 

• Pay yourself first – setting up automated contributions to RRSPs and/or TFSAs lightens the mental load because you don’t have to constantly think about saving for longer term goals; and because the funds are not in your bank account, you’re less likely to spend them. 

• Seek professional help – working with a financial advisor to develop a plan that works for you can increase your confidence in your ability to accomplish your goals and manage the uncertainties of life along the way.