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Anyone paying attention knows that the issues of women’s rights and economic justice can’t be separated. Gender-based income disparities are persistent and pervasive. The feminization of poverty is real.
But it’s not only affecting the quality of women’s financial lives the world over. It’s also affecting their mental health. Studies show that financial distress is a leading cause of significant depression, with the effects particularly pronounced for women and Latinos.
Taking control of your finances, then, is about much more than getting a hold on your spending or building a more economically prosperous future. Your financial well-being is profoundly connected to your mental and emotional well-being.
The reality is that financial distress is about much more than achieving a certain standard of living. In many ways, it’s not even about the fear of not being able to make ends meet, though that is certainly a part of it.
But the psychological impacts of financial distress run far deeper. For example, when you are facing money troubles, you’re robbed of your sense of security. Studies show that 75% of Americans have no savings and live paycheck-to-paycheck. They also show that nearly 60% of women are worried about their debt, and 81% fear for their financial future.
This unrelenting financial worry means chronic stress that can easily spiral into a full-blown anxiety disorder. Indeed, financial anxieties may become so severe that they take a toll on your ability to function, having a profoundly detrimental impact on your overall quality of life. You may find yourself losing sleep or unable to focus or perform effectively at work, especially if your work environment is less than ideal. You may startle easily or become irritable. You may spend hours out of each day fixating on your financial worries, the fear of the next big expense that might spell financial ruin.
The Great Depression?
It’s little wonder that living under such a state of fear and uncertainty would take its toll on one’s mental health. And that can be the start of a vicious cycle, because the worse your money troubles are, the worse your anxiety is bound to be, and the worse your anxiety and depression are, the less equipped you will be to address your financial challenges.
Once you’re caught in such a cycle, it’s easy to feel powerless; it’s easy to feel as if there’s no way out. And that can be a devastating feeling, especially when you are young and working hard to establish your future. Besieged by financial worries, it may be hard to envision brighter days ahead. You may feel that the decades to come hold only more of the same: hard work with seemingly little to show for it.
Such a perspective can lead to debilitating financial depression. When you’re feeling powerless, you lose perspective. You can’t see your circumstances objectively, much less think your way out of them and into the happier, more prosperous life you deserve.
Eliminating the Shame
As difficult as it may be to battle the depression and anxiety that accompany financial worries, perhaps the most painful challenge of all is the temptation to self-isolate. As common as financial worries may be, the simple truth is, there’s still a stigma associated with money troubles.
We don’t want our friends and family to know we’re having trouble making ends meet. We want those around us to think we’re “doing well” because “doing well” is often intimately tied to our sense of self-worth. And, for most of us, it’s manifested in the things we do, the places we go, the clothes we wear, the car we drive, the house we live in. And these feelings of shame, of not being able to “keep up” can cause us to isolate from the ones we love most.
Again, this only exacerbates the downward emotional spiral because spending time with friends and family is far and away your best tool for combating anxiety and depression. When you deprive yourself of such emotional support, what remains are the fears, worries, and sadness of your financial struggles.
Figuring out how your mind is affecting your money is a great first step, but it’s just that, a first step. The next thing is learning the tangible skills you need to oversee your finances. We’re not born knowing how to make a budget, or invest, or grow a retirement nest egg. And, unfortunately, those are skills we’re not usually taught in school.
The great news is that budgeting isn’t rocket science, and there are simple budgeting tools out there to help. It just takes discipline, commitment, especially at first. You’ll need to tally all your income sources, define your financial needs and your goals, track where your money is going and cut the waste, and make a plan to ensure your money is serving those needs and goals.
Once you have taken an unflinching look at the state of your financial health, you’ll have the tools you need to live within your means. That includes a novel approach to saving, where you treat your savings plan like a bill, a non-negotiable weekly or monthly expense, except this time you’re paying yourself!
Best of all, you’ll soon have an emergency reserve. With every dollar saved, you’re taking away a bit of fear and anxiety that an unexpected expense could wipe you out. At the same time, every saved dollar is moving you toward the financial future you want. You’re no longer serving your money. Your money is serving you. Instead of living in fear and uncertainty, you’ll be living with hope and security.
Your finances are about far more than your standard of living. They’re both a reflection of your mental health and a source of mental health. Your mind and your money are inextricably linked, but the great news is that by taking care of one, you can help take care of the other. It just requires strategy, commitment, and courage.