The link between financial stress and mental health

financial stress and mental health

If you’ve ever lay awake at night thinking about your finances you’ll know just how debilitating financial stress can be. But did you know about the strong link between financial stress and mental health?

According to the Australian Institute of Health and Welfare, 4.2 million Australians received mental-health-related prescriptions from their doctors over the 2017-2018 period.

Governments annually spend over $9 billion on mental health, yet there’s a continuous need for more resources, funding, and understanding around mental health issues.

What is mental health?

The term ‘mental health’ refers to a wide range of health and behavioural issues that vary in severity and duration. Among the most common mental health issues in Australia are depression and anxiety.

Although the causes of depression and anxiety are varied, financial stress is a common theme.

What is financial stress?

Financial stress is the all-consuming worry about money. Specifically, mortgage stress is defined as needing to use more than 30% of household income to cover mortgage payments.

A report by ratings agency Moody’s, stated that the number of Australian mortgages more than 30 days overdue was at its highest level for five years, (1.58%).

And according to Relationships Australia, the number one contributor to relationship breakdown is financial pressure.

Signs of financial stress

One big step toward taking back control of your life is recognising financial stress before it gets out of hand. Some signs are:

  • arguing with your loved ones about money
  • difficulty sleeping
  • feelings of anger, withdrawal, or fear
  • mood swings
  • loss of or increased appetite
  • an increase in the use of alcohol or other substances
  • thoughts of self-harm

Reducing financial stress

Financial problems can happen to anyone. A sudden illness, retrenchment, or unexpected expense may throw your budget out of whack.

However, there are steps you can take to get your finances back under control:

How can you manage stress?

Emotional stress can find you obsessing over ways to solve problems, ultimately affecting your behaviour and interaction with others.

However, there are some simple ways to take care of your health, such as:

  • talk with a trusted friend or professional counsellor
  • keep a journal
  • distract yourself – go for a walk, see a movie, or play sport
  • practice meditation to take your mind to a ‘quiet place’
  • take back control, as discussed above

Where to find help for mental health issues

If mental health issues affect you, or someone you know, consider these actions:

October 10 was World Mental Health Day, which aims to remove the stigma attached to mental health through awareness and information. By removing some of the misconceptions around mental illness, we can build a caring community in which those that are affected are more likely to seek the help they need.

For assistance with improving your money management habits and setting up your finances to reduce financial stress, get in touch with one of our specialist advisors here.


This represents general information only. Before making any financial or investment decisions, we recommend you consult a financial planner to take into account your personal investment objectives, financial situation and individual needs.  Speak with a tax accounting specialist (such as TBFG) who is up-to-date with applicable deductions, tax law, and business structuring to get you the biggest return on your EOFY tax assessment.