It was minute 45 in my therapy session, and I was still on the same topic: how much money I was spending on therapy.
I was experiencing peak anxiety and depression when a rich friend recommended her literally life-saving psychiatrist/psychotherapist to me. (Let’s call that psychiatrist “Dr. Takes No-Insurance.”)
I didn’t have rich-person-doctor dollars to toss around. At least not at the ready. So I did a desperate thing that a financial advisor (if I had a financial advisor) would tell me never to do, and cashed out a small 401k from a past job that I’d never rolled into my main one. How much is my life worth? I asked myself. But soon after starting therapy with Dr. Takes No-Insurance, money was all I thought about—I was hemorrhaging cash. I felt like a financial failure…and more miserable and anxious than ever.
I’m not alone. “There’s a huge interrelationship between mental health and financial health,” says Joyce Marter, LCPC, a psychotherapist whose work focuses on mental and financial wellness and author of The Financial Mindset Fix. “When we’re struggling with our financial health, it can trigger or exacerbate depression, anxiety, substance misuse, eating disorders, financial-triggered post-traumatic stress disorder, and even suicidal thoughts and feelings.”
The latter appears to be especially true for those in debt. The Money and Mental Health Policy Institute, an independent research charity, regularly conducts research related to the continuous cycle of mental health problems and financial difficulties. One 2019 survey found that 46 percent of people in debt also have a mental health diagnosis, and 86 percent of them said debt “makes their mental health issues worse.” The consequences can be dire: The Institute reports that people with debt are “three times more likely to contemplate suicide due to that debt.”
You doesn’t have to be down to sub-zero savings to feel psychological effects when handling or even just talking about personal finances. Money stress runs rampant in the U.S., according to researchers at the Global Financial Literacy Excellence Center (GFLEC) at George Washington University and the FINRA Investor Education Foundation. “Alarmingly…even prior to the pandemic, more than half of American adults were experiencing financial anxiety,” says Annamaria Lusardi, Ph.D., academic director of GFLEC.
Indeed. In 2023, Penny, a financial mentorship app for women, surveyed users about the feelings they associated with money. “Anxiety is the top pick of 90 percent of people across all age ranges,” says Crissi Cole, Penny’s founder and a vet of Goldman Sachs, a top investment banking firm. “Shame is number two. And then security is number three, a more positive emotion. Some have achieved that security, and some haven’t but want it”—which can cause distress when it feels like it’s never going to happen. Penny also reports that 45 percent of women want, but feel like they can’t afford, a home.
“Especially with the increase in cost-of-living, more and more [of my patients] these days are stating finances as a particular pain point,” says Sammie LaMont Moss, M.D., a psychiatrist with Kaiser Permanente in Colorado. “My colleagues and I talk all the time about finances adding insult to injury on top of the current mental health crisis in America.”
This goes beyond the anecdotal. Per The American Psychological Association’s 2022 Stress in America survey, 27 percent of Americans are so stressed “most days” that they “cannot function.” The most common concern? Inflation. Women are especially feeling it: An AnalyticsIQ report found that women felt more 28 percent more inflation-related anxiety than men.
Of course, there are many reasons for financial stress. We’re gonna bullet out a few common ones because it’s quite the info dump.
- Pre-Existing Mental Health Conditions. A 2017 paper in Health Economics found that people with anxiety and depression were less likely to have a retirement savings account. A 2022 study in the Journal of Behavioral and Experimental Economics was like, Yeah, same. They found that major depression is related to “a shorter financial planning horizon.” Researchers believe this is “partially explained by depression-oriented differences in behavioral traits, such as optimism/pessimism, perceived control, perceived mastery, and self-assessed survival probability.” (That tracks, right?)
- Student Loans. A 2022 study published in the Journal of Financial Counseling and Planning found a positive correlation between student loan debt and stress, and that even the financially educated can miscalculate and fall behind on payments.
- Unemployment. Like, need we say more? It seems obvious, but here’s what studies prove: Not having a job causes a significant spike in anxiety and depression and a dive in self-esteem—even compared to those in low-paid gigs. Considering there’s a wave of mass layoffs every other day posted on LinkedIn, you can see where this is going.
- Social Determinants. True poverty and classism are extremely damaging to mental health—and a lack of funds often makes mental health care prohibitively expensive. The overlap between poor mental and financial health “is a topic that’s overlooked even within mental health and social justice spaces,” says psychologist Naomi Torres-Mackie, Ph.D., head of research at The Mental Health Coalition, who recently built a digital pamphlet for the org called the Roadmap to Mental Health and Classism.
As intimidating as it is, learning about money matters. Obsessing over it is unhealthy, but avoiding it entirely is worse. We’ll be getting to tactical actions you can take to become more financially well. But first, we need to better understand the relationship between mental health and money—and how we can be kinder to ourselves without letting ourselves off the hook.
It’s a Family Affair
“I think therapists specialize in their own issues,” says Marter. “I’ve spent a lot of time researching the psychology of money, how many of our families of origin, cultural, and religious beliefs shape our financial reality.” Her father was born during the Great Depression, and unemployed for much of her adolescence. “We had a lot of anxiety and shame in our household,” she says. “And I recreated that in my adult life.”
She was ambitious, but started her business—Urban Balance, which focused on getting consumers low-cost mental healthcare—with $50,000 of outstanding student debt, and as the biz grew, she “ended up in cashflow hell.” Her business partner walked away.
“I had insomnia and panic attacks and extreme financial stress,” she says. “I began using tools from my clinical training—mindfulness, cognitive behavioral therapy, narrative therapy, and others to help me cope.” These tactics helped her to be more present and work through some inherited negative feelings about money.
Ultimately, she sold her business “for more money than I would have ever imagined I would make in a lifetime.” Through her own and her patients’ experiences, Marter believes that preemptively caring for your mental health leads to success at work, be it through a raise, finding a better job, or becoming an entrepreneur.
It’s a no-good-very-bad-day cycle: You can’t afford to get therapy, but you need therapy to help you deal with your mental health so you can deal with your financial health. There are a number of ways to get free or low-cost psychotherapy, but Dr. Torres-Mackie especially suggests looking for training clinics. “They all have clinicians who are trainees,” she says. “And it’s very, very good, generally speaking, because those trainees are under the supervision of licensed clinicians. You get two sets of eyes on your case.”
These clinics are usually housed by community health centers and universities with graduate psychology programs. “You could even broaden your search to hospitals and universities [outside of your city or town], since many offer telehealth, though you still need to be seen within the same state,” she says.
It’s the kind of journey that Erin*, 43, wants to take. Erin also grew up in a financially challenged home. Her father had a union job as a master electrician but was “terrible” with money, she says. Any financial gains came from the gambling game Keno and scratch tickets bought so often, they canceled out even the big wins. “He was always behind on bills,” Erin says. “He never had a savings account.”
Her mother kept her finances separate from her dad’s and didn’t share his debt—but also didn’t make a high salary and had a compulsive bargain-shopping habit. She only spent what she had, but she spent all of it. “She thought having things proved that she was successful,” says Erin. “So, there was no savings on either side. They never taught me how to take care of finances. How could they?”
One study in the Journal of Economical Psychology found that families who spoke openly about money passed on smarter financial judgment—even if the parents themselves had money issues. By contrast, having parents who avoided money talk “predicted problematic credit card use,” researchers reported.
When Erin got into credit card trouble at 18 due to compulsive bargain-shopping of her own, she had a meltdown. A 2019 study published in the Journal of Family and Economic Issues found that credit card debt caused double the stress as student loan debt, and this isn’t a one-off finding. There are so many similar studies about debt and distress that your eyes would glaze over if I listed them here.
In Erin’s case, she was mostly afraid of how her mother would react. And she did react angrily; Erin’s $5,000 debt caused a rift in their already rocky relationship. “My debt reflected what she most hated about my father,” Erin says. “She told me I was a piece of shit, and I felt like a piece of shit.”
These feelings of worthlessness lead to prolonged depressive states, according to a 2022 University of Oslo study. One way to get out of the cycle is to imagine someone you’re close with being “stripped of everything financially and ask, Do they still have inherent value? Yes, they do,” says Dr. Torres-Mackie. “It’s easier to see that when we’re looking at other people; it’s harder to reflect that back onto ourselves.”
More than two decades later, money remains a major source of Erin’s anxiety and low self-esteem—and “the biggest—maybe the only real problem—in my marriage.” She hid her persistent (and always growing) debt from her now-husband when they were first dating, but told him before they moved in together nine years ago. “I was giving him an out on moving in together,” she says. “I was really nervous to tell him. It’s so embarrassing to be in debt. I was making $9 an hour at the time, and after making minimum payments on my cards and loans, I had about 20 cents to my name at the end of each month.”
Many of us don’t actually fess up the way Erin did. Many of us, in fact, don’t even broach the topic of money with our partners. Roughly 40 percent of adults over 25 (married and unmarried) who live with their significant other don’t know how much their partner earns, and per a 2022 survey U.S. News & World Report survey, nearly 29 percent of respondents hid debt or an account from a partner.
It was important to Erin to be honest with her partner—but the topic was, and is, incredibly difficult to approach, given her mother’s reaction to her early debt.
Even with her therapist, Erin finds it hard to bring up her debt and compulsive shopping because she’s ashamed of it. But she’s approaching the topics. And she’s made progress money-wise too, cutting $65k owed to $22k and getting rid of 13 credit cards via a debt forgiveness service that she feverishly researched. “This company called my creditors and negotiated,” she says. “They said, How about we pay you half? And we’ll pay you right now.”
She still had to shell out about $30,000 to pay her debt over the last few years, and her already low credit score dipped further. “But there’s light at the end of the tunnel,” she says. “In four years, I could be debt-free.”
Erin’s presently making $20 per hour and is considering leaving her job to be a stay-at-home mom, since paying for daycare eats a huge chunk of her salary. “I love my job, but staying in it feels impossible,” she says.
Being a SAHM won’t exactly solve Erin’s money problems, though. In the short term, she’ll reduce costs, yes, but it means bye-bye to retirement savings. And her family would still just eke by on her husband’s salary alone. “Things have been so much better since his job went union—he got a $10 per hour raise,” she says. “But us making ends meet right now depends on him working overtime.”
Still, Erin is hopeful for the future—and determined to kill her compulsive shopping so she can be a better example to her daughter. Recently, she switched her Target grocery haul to pickup to resist walking around the store. “And from the day my 2-year-old daughter was born, I put $15 into a high-risk investment account each week,” she says. “I know it’s not much, but she already has more money saved than me. By the time she’s 18, she could have more than $25,000. I will not have her have my finances.”
The Paying-Saving Catch-22
Make coffee at home! Stop eating avocado toast! This type of budgeting tip is hardly a tip at all when you’re staring down big city rent or a bunch of student loans—the things more likely to get in the way of savings. In New York City, for example, the 2022 rent-to-income ratio was 68.5 percent; experts typically recommend it be more in the 30 percent range. And the median student debt among millennials is “somewhere around $25,000-$30,000 per borrower,” according to Forbes. “The media over-generalizes that women need to shop less and budget more,” says Cole.
It’s also not helpful to the plenty of people having money trouble who aren’t living large. They’re just living.
“I’ve always been a saver,” says Bethany*. This, despite six years in a higher education job where she’s barely been given cost-of-living raises. (She was able to earn her second master’s degree for free at the college, though—a pretty sweet benefit.) She makes her lunch every day, rarely goes shopping, and leases a budget-friendly car. Moving in with her parents during the COVID lockdown allowed her to save a little, but that’s totally gone now. Bethany and her boyfriend, Dominick*, just purchased their first home (nothing fancy, just “four walls”), and overnight she saw her savings disappear.
After looking for nearly two years, she’s grateful to have found a home in one of the worst housing markets in American history. (Home prices increased 45 percent between December 2019 and June 2022—the most it’s ever risen over such a short period.) But Bethany and Dominick’s small house is starting to feel a bit like a money pit, thanks in part to a lovely little problem—mold!—that a contractor said was the worst he’d ever seen. Each week since closing, there’s been a new expense.
“I’m living paycheck-to-paycheck now,” says Bethany, who was seeing a therapist for her anxiety long before house-hunting, but recently stopped in part to save money. “Everyone keeps telling me [paycheck-to-paycheck] is fine, that this is what people do for a while, but I’m nervous. Because my situation is not suddenly going to change—I’m not going to make more money in my current job. And the bills will keep coming. I just don’t know how I’m going to replenish my funds. How do people build wealth back up when they have higher expenses? Wealth—that word sounds wrong, because it’s not that I even had wealth.”
It truly feels like a piling-on, since Bethany’s done the things everyone tells you to do, like diligently contributing the max to her 401k. But she still has way less retirement savings than her boyfriend—a situation that isn’t an anomaly. A recent survey found that, in general, women contribute a higher percentage of their pay to workplace retirement programs, yet men have 44 percent more in their accounts.
Why? Enter: the patriarchy. Women still make 82 cents to every dollar a dude makes, a statistic that Pew Research says has barely changed in two decades. Gender non-conforming and trans people earn even less, according to the Human Rights Campaign.
Decidedly middle class, Bethany wouldn’t be able to afford the house without Dominick’s pay in the mix, and while she helped with the downpayment, she’ll be covering the monthly taxes on the house and household expenses but not the mortgage. “I felt guilty at first that it was not going to be equal, but I keep telling myself that I’ll contribute to our life together in other ways,” she says.
That’s a healthy way of looking at things. “Your net worth shouldn’t be your self-worth,” says Dr. Torres-Mackie.
Depressed, Monetarily and Mentally
Anna* has always defined herself by her income—and it felt great when she was doing great. But as she’s struggled with mental illness, her income as an independent contractor has fluctuated wildly, hitting a low three years ago.
“I know I should speak to a financial advisor about setting goals, but I’m embarrassed,” she tells Mental. “I’ve always done my own taxes, and I suspect I might be leaving write-offs on the table, but because of my financial-dive years, I’m also too embarrassed to show a tax expert my finances.”
Marter understands this, both as an expert and a human. “When we feel financial shame, that’s actually our ego,” she says. “It’s pride, fear, and shame—they’re housed in the ego and prevent us from asking for help. I remember how hard it was for me to bring my QuickBooks file to a CPA. It was humbling and humiliating. But just like when we see a doctor or dentist, when we open ourselves up to expertise, we get well.”
We’re at the part of the story you’ve been both dreading and eagerly awaiting. This is the money stuff you need to be doing. Some of these tips you can follow through on right now; others are going to take a moment to figure out. Start with the easiest ones for you.
Make sure your student loan payments count. “Student loans are predatory,” says Cole. “Student loan providers should have to tell you what the minimum payment is to [get you out of debt], just like on a car loan or mortgage.” But they don’t.
Through Penny, a client in D.C. who was paying $1,400 on her loans every month discovered that even if she kept doing that forever, she’d die in debt. “She was throwing that money away because it was only covering the interest, not the principal balance,” Cole explains. Using Penny, the client found that if she upped her monthly payment to $1,800, she’d pay off her loans in 24 years. (If you haven’t taken out student loans yet, check out the Free Application for Federal Student Aid before going to private lending companies.)
Consider negotiating with your creditors. This does hurt your credit score–it dinged Erin’s. But if you have a ton of debt, it might be a good option. You don’t actually need to use a paid service to negotiate a longer timeline or a smaller payment, you can do it. But we understand that flying solo on these things can be scary. Just two notes of caution: If you use a service, research the shit out of it. And know what you can actually pay before committing to paying it.
Cut spending realistically. In his book, I Can Teach You to Be Rich, Ramit Sethi suggests gradually cutting problem spending. Say you drop $500 a month on restaurant meals (Mental note: No judgment!). He recommends cutting that by $25 for the next two months, then in $50 increments, until you’re down half of what you were originally spending. This prevents getting overwhelmed by the idea of going from all to nothing. (And feeling like a failure if you don’t accomplish it.)
Naturally, you don’t have to cut every expense–keep your faves around by making other trims. One Mental editor is bananas about coffee. “It is MY JOY,” she says. It’s not going to be the cut she makes.
Check your subscriptions. Seriously. This is a step that every financial advice story tells you to take–but are you doing it? Because even though I “knew” what subscriptions I had, once I actually peeled through my statements, I discovered that what I thought was a one-off service (I swear I read the fine print!) had been auto-renewing for four months.
Put spending cuts into an emergency fund. One survey found that women are more likely to respond to money fears by slashing expenses, whereas men are more likely to change the way they invest. But it’s important to do something with that saved money to help it grow.
If you have no credit card debt to pay down, take those budget savings and make them actual savings. “Even small savings can help buffer against future financial shocks, potentially providing relief to stressed and anxiety-ridden households,” reports the Global Financial Literacy Excellence Center (GFLEC) at George Washington University and the FINRA Investor Education Foundation.
A high-yield savings account, which grows at a faster rate than a regular ol’ one, is great for money that you don’t plan on accessing tomorrow but that you may need sooner than your 401k. One Mental editor just moved some money into Apple’s new high-interest savings account. “You have to sign up for an Apple credit card to get it, but the account is now at 4 percent savings—that’s a lot of dollars,” she says.
Approach investing in baby steps. “Trying to do too much at once can cause paralysis,” says Dr. Torres-Mackie. “You’ll stay stuck exactly where you are—your financial concerns could worsen, even your mental health could take a hit.” Sethi, who now has a Netflix series, includes approachable “this-task-takes-this-much-time” estimates in his book.
For example, he writes that opening a 401k with your employer will take about three hours, and opening a Roth IRA and setting up autopayments will take one. This is good to know because numerous studies have shown that uncertainty and unpredictability are best buds with anxiety and depression. To mix metaphors, if you know a task is bite-sized, it makes it easier to go ahead and eat it.
Investing is endgame. This is what you need to do to build wealth, says Cole. Penny reports that 52 percent of its members want to invest but don’t know how. If you’re screaming “it me!” start by playing around with an existing retirement account. You don’t have to be a baller, you can simply up your amateur game by $100 for now and create a more detailed, diversified plan later. Want help? Get one free month of financial education through Penny by entering code MENTAL10 at checkout!
Ask your employer to host a financial wellness seminar. Employees spend a huge chunk of their workday worrying about money—so it’s in an employer’s interest to ease some agony, says Cole. (She thinks companies should go a lot further than giving an in-house seminar: “Employers need to start offering financial wellness resources the way they’ve begun supporting fertility, fitness, and mental health,” she says. “Financial wellness should be a staple requirement, just like health insurance.”) The GFLEC and FINRA researchers agree that employer programming on money management is a great way to support employees’ futures.
Seek out free government resources. If you work for yourself or your employer is like “Nah” to the financial wellness idea, look for free financial education programs at your local library and community service-based financial coaching sessions. The latter might be through your local government.
NYC’s Department of Consumer and Worker Protection, for instance, has Financial Empowerment Centers. The national gov’s The Office of the Comptroller of Currency also has a directory of service providers. One of those providers is the nonprofit America Saves. Another is the Department of Labor, which offers good digital brochures that explain the basics about retirement, like what a Roth IRA is, exactly. They’re a great start and can prep you to move on to bigger efforts.
The Office of the Comptroller of Currency also has free digital resources that you can search based on your financial goal, be it creating an emergency fund or organizing debt repayment.
Find a better-paying job. Yup, it’s “obviously, I would if I could, you dumb [insert expletive here]” advice, but getting a better job will become possible as you become less anxious and depressed and more confident. What Marter said about patients (and herself) achieving work goals after making progress through therapy? It’s supported by a 2018 study, which revealed that happiness often precedes career success. Which brings us to this last point…
Continue taking care of your mental health. Whatever your other financial priorities, maintaining your mental health must be among them. “The better you’re doing in terms of your mental health, the higher your executive functioning, focus, and motivation will be,” says Dr. Torres-Mackie. “You’ll actually have a better shot of bouncing back financially.
The link between financial and psychological problems is more pronounced “among the unmarried, the unemployed, lower-income households, and renters than their counterparts,” found a 2022 study. As a single renter, Anna currently claims two of those titles, and held a third not too long ago.
When she was barely working due to her depression, Anna—who will likely have a six-figure income for 2023—saw her income dip into the $20,000s, and she qualified for Medicaid. “When I was notified, I felt sick. I was so afraid of my friends and family finding out,” she says. “And I felt guilty, like I had done this to my finances by being crazy and lazy, and now I had access to resources that other people needed.”
Reality is, she needed it. Anna’s stint with Medicaid allowed her to get free therapy and psych meds for major depressive disorder. “I credit my time on Medicaid with why I’m doing better right now,” she says, tearing up. She remains on the same meds first prescribed at a community clinic, and now sees a therapist that she pays out of pocket. “I still haven’t told anyone other than my mom about the Medicaid or how bad my money problems got, and I don’t think I ever will,” she says.
If you’re reading this thinking, Don’t be ashamed! You deserved help, that’s absolutely true. But when it’s you in the sitch, that “somebody else has it worse” crap we hear from toxic-positivity preachers and bootstrap-culture enthusiasts can ring loudly. Anna felt guilty that she “messed up in the first place,” a feeling compounded when she couldn’t get out of trouble alone.
“With shame, there’s always something that is feared,” says Dr. Torres-Mackie. “Am I going to lose relationships? Will people stop liking me? Does this mean I’m a bad person? These are cutting questions we can ask ourselves when we’re struggling.” Both Dr. Torres-Mackie and Marter think it’s a mistake for Anna to hide her financial crisis.
“Community is a remedy to judgment, shame, and internalized stigma,” says Dr. Torres-Mackie, who adds that “community” in this case doesn’t have to be friends and family; it could be an online group who have experienced similar issues. “With support, healing can happen. A sense of belonging increases self-worth. And self-worth is at the core of so many mental health struggles.”
Beyond the feel-good aspect, opening up about financial troubles has other perks. “When my business was struggling, I was so afraid of being judged,” says Marter. “But it wasn’t until I hit rock bottom that I kind of broke open and told everyone I was in dire financial straits that help came out of the woodwork. Have you thought of this? Can you seek out this person? they asked.” Others pushed Marter towards the financial literacy she needed to improve her work in the mental health/financial health field.
Making Money Moves
As for me, after a few months with the pricey psychotherapist, I dropped her for the good of my mental and financial health. Seeing her did help, but not in the way I’d imagined: It made me realize that more expensive care isn’t necessarily the best care. I did some homework and found a more cost-effective and effective-effective therapist. (We still talk about money, but not what I’m paying him; this therapy is 100 percent worth his reasonable fee.) Making a rash financial decision—like I did by cashing in part of my retirement savings—also proved to me that getting my money brain together should be a part of treating my anxiety and depression.
I’ll never get back what I spent. And frankly, I’m consumed by the fact that my 401k doesn’t look the way it’s supposed to, according to all those articles that tell me I should have X dollars by my age. This obsession is one of the reasons I wanted to write this story.
“You have to practice self-compassion,” Marter tells me. “You can recognize: This is a reality. This is a hardship. You can honor your feelings about that whether it’s fear or anger. But it’s time to take responsibility, too. I believe in narrative therapy. If you’re telling yourself, I’m never going to buy a house or I’m always going to be in debt, then you start behaving that way. You must believe something is possible for it not to be impossible.”
If this all sounds a little “vision board,” consider this: What Marter just described is what manifesting is all about. This isn’t a wish list. It’s a to-do list. You can’t just think something into being. You have to take action toward making it happen. From today, I’ll be treating my financial health with more kindness and more diligence—the way I do my mental health. It might just be how I find “balance.”
*All names have been changed at sources’s request
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