“Tough decisions about essentials leads to hopelessness”
Defining Financial Insecurity
Financial insecurity is the perception that your lifestyle has or will change dramatically as a result of sharp decreases in income and/or increased indebtedness. This strong sense of insecurity has a significant impact on self-worth, oftentimes resulting in poor mental health outcomes.
Financial Problems and Mental Health
Whether you are experiencing the recent loss of a job, or increased debt due to mortgage and credit responsibilities, the impact on your mental health requires attention. Moreover, those with financial troubles are often driven by shame, and thus do not reach out for support from professionals, friends, or family.
Anecdotally, it is easy to make the argument that money problems lead to decreases in mood, even substance misuse. There is also significant research focusing on clinical outcomes. In a study conducted by Payoff, findings indicated that 23% of Americans (36% of Millennials), experienced debilitating effects of stress about finances. In fact, they assert that the resulting psychological impacts resembled Post-Traumatic Stress Disorder (PTSD).
Five Psychological Consequences of Financial Insecurity
The Finding My Psych team has identified five (5) profound consequences caused by financial distress. The following identified consequences are informed by clinical observations seen while providing mental health assessments and personal counselling.
- Major Depression: Individuals who have a history of mood disorder, experience compounded decreases in mood when financial difficulties arise. For some, a complicated cycle of ignoring the cause leads to long term decreases in psychosocial functioning.
- Impulsive Decision Making and Anxiety: Individuals may turn to quick solutions offered by predatory lenders or financial advisors. Accessing payday loans temporarily provides emotional relief, only later resulting in distress due to high interest payments.
- Hopelessness: It is easy to give up. Some believe that the pit they are in is far too deep for any lifeline.
- Escape Through Blame: Financial insecurity develops over a long period of time. It is caused by a series of bad luck compounded by bad choices. Our mind is quick to blame external factors (e.g., government).
- Thoughts of Death or Suicide: Suicide is not just the result of mental health problems. It is also the result of financial loss, independent of any clinical diagnosis.
Stepping Into Freedom: What Next?
We have strong advice for anyone experiencing mood consequences of economic problems: Speak with a mental health professional today! Shame leads to a lack of disclosure, especially in a society that measures self-worth in terms of possession and position.
We strongly advise against approaching a financial advisor as the initial step in problem solving your money difficulties. This should come second. You will need ongoing personal counselling support as you navigate getting a new job and/or decreasing your debt.