Have you ever felt depressed or anxious due to your financial circumstances? If you answered “yes”, you are not alone. In fact, a recent MetLife study found that 40 percent of U.S. employees say that having debt or getting into debt is a top driver of their poor mental health. That’s a lot of people being emotionally impacted by debt.

To learn more about this topic, and what you can do to improve your mental health, I chatted with Lindsay Bryan-Podvin, a biracial (Filipina-white) female social worker-turned-financial therapist, author, speaker, and the first financial therapist in Michigan. Bryan-Podvin’s mission is to help people build a better relationship with money by applying shame-free therapy techniques to personal finance.

How Does Money Actually Relate To Or Impact Mental Health?

On its face, money can seem like it’s just numbers – like it’s just about how much is coming in and how much is going out. Many people don’t see how it can related to mental health or emotions at all. However, the fact is, money has a huge impact on emotional well-being. According to Bryan-Podvin, “there are many reasons why individuals choose to work with a financial therapist, but mental health is ultimately at the root of each. Money and emotions are highly interconnected. In fact, behavioral finance experts agree emotions drive financial decisions between 80–90% of the time.”

MetLife’s 2022 Employee Benefits Trends Survey found financial concerns were the top cause of lower mental health among employees. It also found that employees who say they live paycheck to paycheck are significantly more likely to say they have needed to seek help for stress, burnout, and depression in the past 12 months versus those who don’t, which further supports the strong connection that exists between money and mental health.

Steps You Can Take To Improve Your Relationship With Money

So are you doomed to have mental health issues due to financial stress? Not necessarily. When asked how people can improve their emotional relationship with money, Bryan-Podvin suggested a three step approach:

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1. Understand Your Relationship with Money: Start by looking back at how money was discussed (or not) while you were growing up. Our experiences with money or the lack thereof can impact how we think about money for the rest of our lives.
2. Leverage Financial Wellness Resources: Look around for podcasts, blogs, books, and apps that might guide you towards financial wellness. Bryan-Podvin recommends starting with an app called Upwise.
3. Cut Small Costs to Support Big Financial Goals: Think about the little things you can do now in the present moment that will improve your financial situation.

“If you are feeling anxious about a big financial decision that hasn’t happened yet, as many people do, try and revert your attention back to the present moment and focus on the things you can control”, says Bryan-Podvin. For example, subscriptions are a great place to start. Everyone has forgotten to cancel a subscription after a free trial ends, and those expenses can add up. Go through your bank or credit card statements to find out what subscriptions you are paying for that you don’t use. Start taking steps to cancel those. If you need support doing so, there are lots of apps out there to help you, like Rocket Money or Upwise. But make sure that you aren’t cutting costs that impact your overall well-being, such as therapy or regular massages for chronic pain.

How You Can Manage The Stress That Comes With Debt And Other Financial Problems

Of course, even if you work to improve your relationship with money, stressful financial issues will inevitably come up over time. In that case, it’s important to learn how to properly manage the stress that comes with debt and other issues.

“First of all, recognize it’s common to feel stress when it comes to financial concerns. In fact, it happens to most people, no matter what stage of life you’re in. When tackling a financial concern like a large amount of debt, it’s important to consider striking a balance between being laser focused on making progress to pay it down, and acknowledging that some spending does bring value and make you feel good. It doesn’t have to be an all-or-nothing approach,” says Bryan-Podvin.

To build this balance, try focusing on what Bryan-Podvin calls the “three pillars of personal finance”:

1. Know how much money is coming in and going out of your accounts each month, to ensure you have enough money to cover all necessary expenses. This is also known as a “budget,” or a “spending plan”, and it’s something that digital apps can assist with.
2. Always have money available for short-term needs. Think of an emergency fund you can pull from if you lose your job or have to stay home with a sick child, and other short-term savings goals like saving for a vacation or a new car.
3. Finally, make sure you consider the future, which can include investing in retirement, paying down student loan debt, and getting a will and trust in place.

With this framework, individuals can start to take back control and feel more optimistic about their financial futures. And according to Lindsay Bryan-Podvin, “if your money decisions are driven by peace, excitement, and confidence, you can rest assured that you are likely making financial choices that are good for you both now, and in the future”.