How Budgeting Improves Your Mental Health

Money is more than a practical matter. It can actually impact your mental health. Financial stress is a real thing, and it could be causing you significant worry that spills over into the rest of your life, keeping you awake at night and affecting your physical health. Take money management seriously for less anxiety and better mental health.

What is Financial Wellness?

If money stresses you out, you’re not alone. The American Psychological Association reported in 2020 that 64% of adults view their finances as a significant stress source. Most people in the U.S. do not have financial wellness, but what is it?

Financial wellness is an often overlooked component of overall wellness. It refers to being in a position of control over your money, being able to cover expenses and plan for the future, and enjoying life because your financial needs are met.

How Money Affects Mental Health

Not having enough money, being in debt, or just feeling like you don’t have control over your finances can cause several problems that affect your health:

• Anxiety
• Insomnia
• Relationship conflicts
• Weight gain or loss
• Withdrawal from friends
• Substance use

The money-mental health connection is a cycle. Studies show that people with mental illness are more likely to be in debt. Even a small, non-diagnosable decline in mental health can negatively impact your finances. This causes stress, anxiety, and other symptoms, which continue to feed into your money situation.

Budget for Financial Peace of Mind

There are several reasons that money can cause so much distress. Of course, not having enough money, debt, and struggling to pay the bills cause worry and stress. Even if your financial situation isn’t dire, it can make you anxious if you don’t have good financial literacy or control over spending and saving.

Taking charge of your finances can improve mental health by decreasing anxiety and stress, ensuring you can plan for a safe, secure future, allowing you to enjoy doing the things you enjoy and just giving you a better sense of control and agency.

It’s important to improve your financial literacy by learning about money and how to manage it. In the meantime, a big step toward better financial wellness is creating and sticking with a budget. A monthly and weekly budget is a great way to take immediate control. It’s not difficult to do:

• Start by tracking your spending. Know what you spend now so that you can set a reasonable budget amount.
• Look for areas where you can save, like a daily coffee or a subscription you never use.
• Divide regular, annual payments for things like insurance by 12 to get the monthly amount.
• Choose a reasonable amount to spend each month and then divide that to get a weekly budget. Don’t be too tough on yourself, or you’ll fall victim to budget anxiety, the sense that you can’t possibly stick with it.
• Keep a daily spending journal to know what you’re spending and stay on track with the budget.

Stress and anxiety are huge contributors to poor mental health. One of the most significant factors in creating these feelings is money. Take control of your money to reduce stress, sleep better at night, and stop worrying about the future.