The Important Connection Between Financial and Mental Health

Have you ever experienced some form of financial stress, such as mounting bills, unexpected expenses, a lost job, or uncertain income? You’re not alone. The good news is that there are tactics you can employ with a Buffalo Grove financial professional during National Financial Planning Month, which occurs each October. 

Financial stress can often feel all-consuming at times with no end in sight. This type of stress can also carry over into other areas of life, which can be a cause for increased anxiety, insomnia, strained relationships, divorce, and depression, all leading to a downward, negative spiral. For many, financial worries don’t stay confined to their bank balances—financial well-being can manifest itself in our emotional well-being, creating ongoing mental health challenges.

In today’s blog, we’ll examine the interconnection between financial and mental health and explore various tactics for ensuring your mental and financial well-being stays positive so you can make sound, objective financial decisions that also improve your mental health.

Understanding the Impact of Financial Stress on Mental Health

The American Psychological Association (APA) noted that roughly 72% of Americans sometimes experience financial stress, while 22% feel extreme stress over their finances. Financial stress isn’t just temporary discomfort; it’s often long-term and impacts overall mental wellness.

According to their research, chronic financial difficulties can lead to anxiety disorders, depression, and even physical health problems like high blood pressure. The constant worry over money can disrupt one’s ability to focus, maintain relationships, and enjoy life.

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The Psychological Impact of Financial Stress

Financial stress doesn’t just stay in your head—it can manifest itself in your day-to-day life in various ways. Many people who experience this type of stress report sleepless nights, constant worry, and irritability due to financial uncertainty. Over time, this leads to a pervasive feeling of failure, which creates more debilitating anxiety attacks.

One of the biggest drivers of financial stress is the apparent lack of control. When money seems tight or unpredictable, it’s easy to feel like there’s no way out. This sense of being out of control can make decision-making more difficult as fears cloud judgment. A prime example is the tendency to make poor financial decisions—such as overspending, neglecting to save, or turning to high-interest loans—in a moment of panic, which often prolongs or worsens the situation.

For example, consider a 42-year-old teacher drowning in credit card debt after unexpected medical bills. The stress led to sleepless nights, strained communication with her spouse, and feelings of hopelessness. Over time, the pressure caused her to avoid making financial decisions altogether, exacerbating the problem. 

Her case is not unique; it illustrates how financial stress can quickly evolve into a cycle of poor decisions and worsening mental health. She and her spouse finally divorced due to the rapid decline in their relationship.

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The Role of Financial Planning in Improving Mental Health

While financial stress can seem insurmountable, there’s hope! 

Comprehensive financial planning offers a way to regain control and reduce anxiety. You can regain control and hope in your financial life by creating a budget, setting financial goals, and sticking to a plan.

This, in itself, can ease a major part of the mental strain. A financial plan can offer clarity, structure, discipline, and reassurance. Identifying priorities, tackling debt, and working toward long-term goals can provide peace of mind and a sense of progress each month as debts begin a slow but steady decline. A feeling of progress is positive, no matter how slow. When you feel more confident in your ability to manage money, you can experience less stress and put more focus on other important aspects of your life. 

Another example of a small business owner showcases this benefit. After facing significant stress due to inconsistent income and poor financial habits, the business owner worked with a financial advisor to create a structured plan. Over time, his stress decreased as he built a savings buffer and started paying off debts. Having a plan in place restored his sense of control and improved his overall feeling of financial well-being.

Working with a Buffalo Grove financial advisor can increase your confidence when you make sound financial decisions. Plus, the right financial advisor can bring expertise and objectivity while helping you create realistic strategies for your unique situation. 

Research shows that individuals with a clear financial plan are more likely to feel optimistic about their future. This optimism can alleviate anxiety, providing a sense of calm that might have been missing.

How SGL Financial Can Help

At SGL Financial, we understand that financial and mental well-being are deeply interconnected. Our priorities are providing sound financial advice and a supportive environment where clients can feel confident and successful. 

We believe that a well-thought-out financial plan impacts more than just your bank account—it also positively influences your financial and physical well-being.

Our team of experienced CFP®, CPA, and financial professionals in Buffalo Grove takes a personalized approach to financial planning. We work closely with you to assess your unique needs, whether creating a budget, building wealth, or planning for retirement. 

We know that life can be unpredictable, so we strongly emphasize October as Financial Planning Month—a time to revisit your financial goals and ensure they align with your long-term aspirations. Our Buffalo Grove financial advisors are here to guide you through this process with clarity and compassion.

Our services go beyond numbers on a spreadsheet. We’re committed to helping our clients reduce financial stress and improve their overall quality of life. With the right plan in place, we can help you take charge of your financial well-being, giving you the peace of mind to focus on what matters—living your best life.

If you’re ready to address the connection between your financial and mental health, we invite you to contact SGL Financial for a complimentary consultation.