Money and Mental Health – Dealing with your Money Worries

Woman walks along a path, with her hands on her head, indicating that she is stressed.

The ‘M’ word. It holds so much power – it’s something many of us still feel awkward talking about and don’t like thinking about too much. How many times have you avoided checking your bank balance, or swerved questions when someone asks about your finances?

The fact is, money and mental health are linked. Worrying about getting the most from your money can worsen anxiety, and talking about what to do with your finances can be uncomfortable, stressful, or downright impossible – particularly if you’ve struggled with debt.

But dealing with your money worries can often help ease your mental health issues, giving you back a sense of control. Taking the taboo away from talking about money will be another weight off your mind.

Who this money and mental health guide is for:

Our guide to money and mental health is perfect for anyone looking to learn more about how your financial situation and mental wellbeing are linked. If financial worries worsen your mental health, this guide will help you take positive action. 

Money and mental health

How common are mental health issues?

Mental illness and money – two things that are intensely personal and usually shrouded in secrecy, but that we all need to talk about more. 
The truth is that one in four adults in the UK will experience mental illness at some point in their lives. In most cases, this will be in the form of anxiety, depression, or a combination of the two. In fact, just under 8% of British adults experience mixed anxiety and depression at some point.

Mental health in the UK: the stats*

  • One in four adults experiences mental illness
  • 7.8% of people experience mixed anxiety & depression
  • 4-10% of people will experience depression
  • 12.7% of all sickness absences are due to mental health
  • Experts have shown that debt and mental issues are linked
  • 9.5m Brits say money is their biggest source of anxiety
  • Those aged 25-34 are most likely to have financial worries
  • Money worries cost the average person 46 minutes of sleep a night

Mind UK

Even more common than mental health issues are financial problems. The average UK household has almost £8,000 in personal loan and credit card debt, and 22% of adults have less than £100 in savings. So, that’s 1 in 4 adults who are struggling to manage their finances, and 1 in 4 adults who are struggling with their mental health.

It’s time to break the cycle

Money can’t buy you happiness, but feeling as if you have more control over your money can help free you from some of the anxiety and worry brought on by financial struggles. 

But getting to that solid financial position – and staying there – can be equally challenging for your mental health. When you’re feeling anxious, or stressed, having to think about your finances can feel overwhelming… and the cycle continues.

But if that cycle can run one way – worsening your worries, it can run the other way too.

Feeling better about your finances is less about how much you make, and more about being in control. Having a sense of security over your finances and knowing how to manage them can bring you peace of mind, helping to alleviate the stress and worry we feel about money.

Let’s start empowering and educating ourselves about our finances.

Five ways to tackle your money worries

Help is always at hand

If you think your financial situation is affecting your mental health, and you’re worried about harming yourself or experiencing suicidal thoughts, The Samaritans are here to help. Visit their website, or call 116 123 for free.

1 – Get free, expert advice from mental health charities

It’s easy to think that nobody wants to talk about your financial situation or your mental health, but this is not true. 

There are many charities dedicated to providing you with free, impartial advice on any mental health issue you might be experiencing. And it’s been shown that simply talking about your stresses and mental health issues can help you to feel better. 

So a positive first step is to reach out and talk to someone. The following charities specialise in helping people who are worried about their mental health:

Mental Health and Money Advice

Advice for people experiencing issues with mental health and money. This toolkit in particular is a very useful resource for improving financial health.

rethink mental illness


A charity supporting those with anxiety, depression and other disorders.

mind charity logo


The mental health charity dedicated to supporting those in need.

Mental Health UK

Providing advice, information and support to those who need it.

As we mentioned at the start of this section, The Samaritans offer emergency support to anyone experiencing a mental health crisis, while your GP can help with a range of treatment options.

2 – Find professional guidance

Money Advice Service

Providers of free, impartial financial advice.

The Money Charity logo

The Money Charity

Advice on your money-handling skills.

National Debtline

Free advice on how to handle your debt.


Free advice on money problems, debt and budgeting.

3 – Start the conversation

You might not need a debt charity. In fact, you might be doing pretty well for yourself – but that doesn’t mean you won’t be stressed about money, and it doesn’t mean you shouldn’t speak at all. 

One of the easiest ways to feel empowered about money is to open up and talk about it. Most of us don’t like talking about finances at all. If we have more disposable income than others, we feel like we’re bragging. If we’re not as well off as our friends, we feel like we’re doing worse than they are.

But you don’t have to feel like that. While money issues can be linked to your mental health, your bank balance shouldn’t be linked to your self-worth. It doesn’t matter how much you earn, money worries affect us all.

Talking about your worries can be a huge weight off your mind. Whether that’s a financial coach, support networks such as Claro Community or even just other people who also want to be open and honest about their financial goals, by sharing your worries, you’ll feel less stressed and more empowered to start using your money more constructively in support of your long-term plans.

4 – Empower yourself

One of the biggest struggles that anyone living with mental health issues faces is a feeling that they’re not in control, or that they don’t have the power to change their situation.

And one of the biggest factors that makes money worries such a big contributor to poor mental health is that when it comes to cash flow, we don’t always feel that we’re in control.

A huge stress factor for many of us is that we don’t know what to do with our money. We worked hard for it, so we don’t want to miss out. 

But there are so many options out there. If you don’t feel empowered, you’ll be hit with “choice paralysis,” constantly weighing up options you don’t fully understand, worrying that you’ll make the wrong choice and lose your savings or your investments (or just miss out on the best possible returns). All the while, your money’s sitting there doing nothing – or being frittered away on impulse buys.

The good news is that you’re already taking your first step towards empowering yourself. Just by reading this article, you’re informing yourself about money and preparing yourself to make the right choices. So keep reading. Keep learning.

By educating yourself, you’ll feel more confident about your decisions – and be able to make smarter choices with your money.

5 – Build your savings for better peace of mind

Having enough in savings in case things go wrong will provide a cushion if the worst does happen, and give you enough time to recover from an illness, accident, or unfortunate situation. You may find you sleep easier at night knowing you have enough stashed away to support you through life’s unexpected twists and turns.

The Money Advice Service offers a free savings calculator to help you work out either how much you need to save to hit a specific milestone by a certain date, or how your savings will add up over time if you can commit to them.

As part of your long term financial plans, you can factor savings into your monthly budget, creating another financial habit that will gradually provide you with better peace of mind and reduce the stress and anxiety that comes with money problems. The Claro budget sheet can help you get started. 

And when you’ve built up a healthy savings pot, and feel less stressed, you’ll be able to look at the options open to you more clearly and see the potential of your money. You might then think about investment opportunities to further support and advance your future goals.

A happier, healthier financial life is within reach

By taking small actions every day, by budgeting sensibly and controlling your spending, by paying down debts and building up savings, and by reaching out and speaking to people who can help you, a happier and healthier financial life is within reach.

You just need to take the first step.

Make smarter financial decisions

If you need help making smarter financial and investment decisions every day, Claro will act as your digital financial coach, while giving you access to a supportive community you can discuss your money goals with. Download our app today to get started.

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