Is your mental health making you poorer?


13th Jan 2021 Wellbeing

Is your mental health making you poorer?

Katie Conibear explains how mental health issues can exacerbate your financial situation—and what you can do about it

As someone living with bipolar disorder, I know the reality of overspending all too well. Over my adult life I’ve been in thousands of pounds of debt. The cycle of mania and depression would lead to my spending becoming out of control—it was an impulse I couldn't manage when I was manic and a form of comfort when I was depressed. I’ve been threatened with bailiffs when I couldn’t afford to pay back what I owed and it’s caused unbelievable stress, worry and fear. There are thousands of stories just like mine. I spoke to JJ, who has depression and ADHD and told me that neither of these conditions help keep his finances in check. 

“Years ago I had a credit card with my bank. I believe that I only requested a credit limit increase once or twice, but they kept raising the credit without asking me, and I kept spending. 

I was suicidally depressed at the time. The debt got to about £6,200 around 2009. I am still paying that debt back. I must have paid that money back more than twice over, which I thought you were not supposed to have to do. It has crippled me financially for more than a decade, and I still owe them £2,500 at this point.” 

holding open an empty wallet

Debt is persistent, especially when out of control spending means buying what you can’t afford. Interest rates cripple people financially and the stress of meeting even minimum payments can exacerbate mental health conditions. 

Harjit Moore, CEO of Freeze Debt, explained to me how debt can affect someone with pre-existing mental health problems—and even cause them. 

"Common symptoms of mental health problems can make it particularly difficult to stay in control of your outgoings"

“Their debt is increasing every month so they’re constantly waiting for that next paycheck, have borrowed money from friends, families or banks, are perhaps defaulting on payments, and may even have debt collectors circling. It’s a really stressful position to be in. Shame, embarrassment, anxiety, depression, insomnia, isolation, even paranoia—these are all common experiences for those in a position of financial uncertainty. If you’re getting deeper into debt, without knowing the way out, this can and likely will absolutely have a significant impact on your mental wellbeing.”

Although we can all struggle with debt, people living with mental illness face a variety of challenges. Mental illness affects all aspects of a person’s life and that includes their career and ability to work. Conor D’Arcy, from the Money and Mental Health Policy Institute explains in more detail: “While managing finances can present challenges for anyone, common symptoms of mental health problems can make it particularly difficult to stay in control of your outgoings. Increased impulsivity, a low mood and trouble thinking clearly can contribute to people spending more than they can afford. But we also know that people with mental health problems tend to have lower average incomes than the rest of the population, meaning there's less slack if an unexpected expense crops up.” 

woman staring at credit card in despair

What may seem like a small debt to some, can feel insurmountable to others, especially those on a lower income or unemployed. There’s also the worry of living without a safety net; having little to no savings or people who can help financially. The burden of constant worry and the strain of debt can cause people with mental health problems to become incredibly unwell. 

JJ explains how his diagnoses tend to impact his ability to work and budget: “The ADHD and the depression make it really difficult to work full time. I'm really prone to sensory overload. I have no money skills, and no support. I'm in my forties, and I've never really even had a budget for things.”

"Talking about money can be awkward, and we don’t always turn to help when we desperately need it"

Talking about money can be awkward, and we don’t always turn to help when we desperately need it. Harjit Moore spoke to me about the power of communication. 

“A useful tip is simply the act of talking about it. As with many situations, talking openly about debt can really help to relieve the pressure, help you come to terms with the problem, and push you to get help. We have all have a complicated relationship with money, so we don’t tend to talk about it, which, as we know, makes the problem far worse. Debt isn't and shouldn't be a 'dirty' word, which is why we’re trying to normalise it and encourage positive, constructive conversations, free of shame.” 

two people discussing debt

Although talking is key, it’s also important that there is support out there when we need it. Is enough being done to help people with mental health problems who find themselves in financial trouble? Conor D’Arcy explained what the Money and Mental Health Policy Institute believe needs to be done.

“With the pandemic putting pressure on both our mental health and finances, it's crucial that adequate support is there for those who are struggling. Trying to get by on a low income can delay people's recovery—improved support for people through Statutory Sick Pay and benefits could prevent health and money problems from getting worse. Communication is critical, too. Whether it's a bank, the local council or the DWP (Department for Work and Pensions), understanding how mental health problems can affect our ability to manage our money and seek support can make
a really huge difference.” 

"Trying to get by on a low income can delay people's recovery"

Many people with mental health issues have had to find their own solutions to managing their money. Sometimes, however, it becomes the only option when debt spirals completely out of control. This was the case with Claire, who lives with bipolar disorder. 

“I ended up £35k in debt because of excess spending while I was manic over a number of years. I would do things like put my credit card behind the bar and run a tab for anyone who wanted a drink. It ended in bankruptcy and I've learned how to not give in to those urges anymore. At the time it felt so natural, like it was supposed to be spent, I felt like I couldn't live without what I was buying, or the happiness of people getting the drink they wanted. Afterwards, as I crashed out of the mania, I would look at receipts and credit card statements and feel sick to my stomach, I was struggling to pay the debts back from the age of 21 and I was never able to get on top of them. I couldn't afford to save for a house or any kind of future and all that would come crashing down on me so I couldn't breathe.” 

happily discussing money

Even though it can feel impossible to find a way out from debt, Conor D’Arcy says there is support out there, and a way to move forward.

“When you're having problems with both your finances and your mental health, it can be hard to reach out for support. But it's important to know that help is out there, from free debt advice providers like Citizens Advice and StepChange. These are common issues—one in four of us experiences a mental health problem each year and before the coronavirus pandemic, over 5 million people in the UK were in problem debt—but there certainly are solutions.”

I asked Claire how she had learned how to curb her spending, and she shared some invaluable insights. 

“I've learned to spot the warning signs, small increased spending; CDs, DVDs, that sort of thing. I then gave up my bank card and don't have a credit card anymore. I use distraction techniques—meditation, music, going out for a walk—to work through the urges to spend money.”

It’s irrefutable that money and mental health are intertwined—and that those who struggle daily with mental illness are more likely to struggle financially. More steps should be put in place to help people before they begin overspending, and advice readily available if people find themselves in debt. Communicating seems to be key, and understanding how and why people struggle with all aspects of money when they’re mentally unwell. 


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