The Financial Conduct Authority found that 27.7 million adults in Britain have low financial resilience, suffer from poor health, or are dealing with a negative life event. This figure is a 15.4% increase from the 24 million people who had these problems in February 2020—a month before the first pandemic lockdown. Just one of these situations places people at risk of mental, physical, and social harm.[1] Because financial stability and overall well-being are closely linked, addressing financial problems is crucial for health and longevity.

Financial Stress and Health

Financial stress, a physical and an emotional response to money problems, is common in business and personal life. Some people have minor financial problems, for example, a small amount of debt due to temporary unemployment. But for many others, financial issues are far more serious such as insolvency.

Brief periods of stress can be helpful.

When we encounter challenging or threatening situations, we become alarmed and our bodies release hormones including adrenaline and cortisol to help us cope. This state can help us focus on getting things done such as completing an application by its deadline. It can also give us the energy and additional strength needed during a crisis (e.g., rebuilding after a fire destroys a home).

Constant stress can harm our health.

Although short bursts of stress can help us finish things or protect ourselves, the constant stress that ongoing financial problems create can hurt us in many ways.

Effects on the Body

·       Digestive issues

·       Constipation

·       Diarrhoea

·       Heartburn

·       Stomach pains

·       Ulcers

·       Headaches

·       Muscle pain

·       High blood pressure

·       High blood sugar

·       Insomnia

·       Weight gain or loss

Effects on the Mind

·       Anxiety

·       Dependency on alcohol, drugs, food, gambling, etc.

·       Depression

·       Inability to control emotions like anger and sadness

·       Increased irritability

·       Lack of concentration

·       Loneliness

·       Panic attacks

·       Restlessness[2]

·       ShameEffects on Social Health

·       Conflict at work

·       Poor job performance

·       Problems communicating

·       Relationship problems

·       Social isolation[3]

The Link Between Debt and Mental Health

According to the Royal College of Psychiatrists, 25% of adults will have issues with mental health at some point in their lives. Fifty percent of adults with debt have mental health problems, and 25% of adults with mental health problems are in debt. These statistics indicate that debt can lead to and be caused by mental health problems.[4]

Major Causes of Debt

Redundancy and unemployment are the most common causes of debt.[5] Other causes include the following: [6] [7]

Life changes

Major life changes including the loss of a loved one, a divorce, or a break up can reduce monthly income and/or savings, lead to job loss, or require borrowing or use of credit cards.

Health problems and medical expenses

Declining health, inability to work because of illness or injury, and large medical bills can drain monthly income and exhaust savings.

Low income

Having insufficient income can lead to debt because it’s difficult or impossible to cover monthly expenses. This may make it necessary to borrow money or use credit cards to make ends meet or deal with a crisis.

New purchases

Buying essential items such as a new refrigerator can eat into savings or require the use of a credit card. But psychological problems such as mania or a shopping addiction can lead to spending sprees that deplete income, wipe out savings, and increase credit card debt.

Having children

Expenses associated with raising children including childcare, education, food, clothes, healthcare, recreational activities, toys, and other expenses can put a strain on monthly budgets.

Education and student loan debt

Because earning a college degree is expensive, it might be necessary to get loans to cover the cost. Repaying the loan can be challenging especially when earnings are low or moderate.

Business expenses and failure

Running a business has many upfront and ongoing expenses. If the business doesn’t make enough money to cover monthly expenses and repay any loans, debt will accumulate. If it fails, the business owner is responsible for outstanding debts, which could lead to long-term financial difficulty.  

Shame and Bankruptcy 

If you’re facing insolvency and have exhausted other means to deal with your debts, bankruptcy could be the best option. It may be extremely hard to take this step because of social stigma and the shame bankruptcy might cause you to feel. The following statement from the Bankruptcy Service explains why shame is simply not warranted. 

“…bankruptcy is entirely legal, and an effective way to rid yourself of debt that you are incapable of paying. The system was created specifically to deal with such situations. Bankruptcy exists in all democracies for a reason. It provides a safety net for people and allows a fresh start and a second chance for all...Dealing with your debts and formulating a plan for a brighter future not only relieves the stress and burden of debt that hangs around you, but it has a similar effect on those around you. Stress is bad for your health, so dealing with your debts is a way of improving wellbeing.”[8] 

Coping with Financial Stress

Financial stress is emotionally draining and physically exhausting, but four strategies can help you alleviate the health problems it creates.[9]

1.    Keep track of your finances. 

Keep a record of your debt, income, and spending for a month or more. This will give you a good idea of how you’re spending your money and help you gain control of your financial situation. With a complete understanding of your monthly income and expenses, you can develop a plan and goals for improving your financial situation. The following tips will help you create a complete inventory of your monthly finances: 

·       Include all sources of income such as alimony, benefits, bonuses, child support, interest received, and wages.

·       Keep track of all your expenses, even the minor ones like buying a cup a coffee or a newspaper.

·       List all of your debts including late fees, minimum payments on credit cards or other debts, money owed to friends and family, and past-due bills. 

Taking inventory of your finances may be difficult and painful but try not to beat up on yourself for having money problems. Even if you’ve made some financial mistakes or don’t make enough money, it doesn’t make you a failure or a bad person. Working to improve your finances and controlling the things you can are a much better use of your time and mental energy.

2.    Create a monthly budget. 

Creating a monthly budget and following it will help you spend your money more efficiently. These suggestions can help you create a realistic budget: 

·       Include daily expenses such as food and commuting to work and monthly expenditures like housing, car, and utility payments in your budget. Also, cut down nonessential spending because it can add up over the month. For example, instead of buying a treat like a pastry every day, try limiting it to three times a week. This will allow you to save money without completely denying yourself the small pleasures in life.

·       Divide annual expenses like property taxes by 12 so you can put away money each month for them (if possible).

·       Incorporate money for unexpected expenses such as car repairs, home maintenance, medical co-pays, and prescriptions (if possible).

3.    Talk with someone you trust.  

When we have money problems, we might bottle it up out of denial, shame, or fear. This can worsen stress and anxiety and cause the problem to feel more insurmountable. Talking with a trustworthy and compassionate friend or family member can take some of the weight off your shoulders and help attenuate any shame you might be feeling. You may also receive some good advice about how to address the problem.

4.    Work on reducing stress. 

Finding ways to manage stress can help you improve your health, resolve financial and other problems, and develop peace of mind. Four ways to reduce stress are discussed below.

Eat a healthy diet.

Eat a balanced diet rich in fruit, omega 3 fatty acids, and vegetables to increase your energy and enhance your mood. Also, drink plenty of water because dehydration causes fatigue, headaches, and other symptoms.

Get enough exercise.

Exercising for at least 30 minutes most days of the week will increase your energy level and mood, reduce your stress level, and improve your self-esteem. It will also help you keep your mind off your problems.

Get enough sleep.

It can be hard to get enough sleep if you have lots of responsibilities or are having insomnia. But improving your sleepwill give you more energy, help you think better, and allow you to get things done more efficiently. 

Seek help.

Since financial problems and mental health issues can become a vicious cycle, seeking help for both issues will have a positive impact on your quality of life.

Taking a Step Toward Controlling Financial Stress

Financial difficulty and the stress it creates can permeate all areas of your life. It can also cause serious harm to your mental, physical, and social well-being. If you are unable to manage financial stress or have become depressed, isolated, or suicidal, then talking with a licensed mental healthcare professional is imperative.  A therapist or counsellor can help you alleviate stress and any other mental health issues you’re experiencing. Improved emotional and psychological functioning will increase your ability to deal with your financial problems. At Life Counsel, we provide a safe and welcoming place for you to talk about what you’re going through and find solutions to your problems.

[1] Huw Jones, “More than 40% of Britons in Poor Health or Struggling Financially Amid Pandemic, Says UK Regulator,” Reuters, accessed March 14, 2020, 

[2] “Coping with Financial Stress,” LLC, accessed March 11, 2021,

[3] Tammy George, “What is Social Health? Definitions, Examples and Tips on Improving Your Social Wellness,” HIF, accessed March 12, 2021,

[4] “Debt and Mental Health,” Royal College of Psychiatrists, accessed March 12, 2021,

[5] “Debt and Mental Health,” Mental Health Foundation, accessed March 12, 2021,

[6] “Debt and Mental Health, Royal College.”

[7] Monique Furniss, “Common Causes of Debt,” Norton Finance, accessed March 12, 2021,

[8] The Bankruptcy Service, “Bankruptcy - Why There's No Need for Embarrassment,” The Bankruptcy Service, accessed March 14, 2021,

[9] Lawrence Robinson and Melinda Smith, “Coping with Financial Stress,” Help Guide, accessed March 13, 2021,

Stathi Anthopoulos

Stathi Anthopoulos

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