A woman is seated on a couch as she counsels a person who is also seated in a therapy looking setting. She has both her hands raised a bit lower than shoulder length as if she's explaining something. She is wearing a black lanyard, a gray blazer and has long brownish black hair with a side pony tail. The man, who is facing away from the camera has black hair and is wearing a light blue button up. In the background are large windows showing bright light and trees.

Mind and Money

Explore the connection between mental and financial health and how self-care can boost both.

Portrait of Lora Shinn

Lora Shinn
Published May 31, 2024 in: Advancing Equity

Read time: 6 minutes

Many of Michael Lombard's clients are enduring the pinch of rising inflation and interest rates. BECU business member Michael Lombard is a Lynnwood-based financial therapist. A financial therapist is a professional helping people think, feel, communicate and behave differently with money to improve overall well-being, he explained.

"There's a general feeling that everything is more expensive" he said, everything from daily groceries to being able to afford a replacement vehicle. They're not wrong, as inflation increased consumer prices over the past three years.

Other everyday stressors include the unexpected costs and uncertainty resulting from medical debt, a layoff or a long-term illness, Lombard noted.

Four out of every 10 Americans report high or moderate stress from their finances, according to research from the Financial Health Network. Higher financial stress is more common among women, younger people and lower-income households.

Personal unsecured debt (such as a personal loan or credit card debt) has been associated with greater depressive symptoms, the report notes. Some debt, such as medical debt, is more associated with mental health issues, FHN's researchers suggest — because the debts are beyond the consumer's control.

An outdoor headshot of BECU business member Michael Lombard. He is standing in front of greenery.
BECU business member and financial therapist, Michael Lombard.

"If debt or other costs are unplanned, it's an unexpected expense that can significantly affect decision making due to the anxiety or panic that those costs may create," Lombard said. This can differ from debt you planned for such as a mortgage or a student loan.

However, research doesn't yet demonstrate how or whether financial challenges definitively lead to mental health issues, or vice versa. Financial and mental health challenges can stem from many independent and interrelated causes that can't always be controlled or mitigated. However, the two interact in some ways, and small steps could improve both.

Mental-Financial Connections

Depression and anxiety symptoms can lead to financial avoidance, Lombard explained. For example, anxiety can make a person not want to review bills or see how little is in their bank account. Others may avoid thinking about retirement, feeling anxious about not understanding how much is necessary or how much to save.

Anxiety can also lead to hypervigilance, leading to repeated checking of accounts or tracking every penny. And strong emotional states like loneliness correlate to being vulnerable to financial fraud. But shame only exacerbates the stress.

"Every action serves a function, but some actions are more sustainable and healthier," Lombard said. As a financial therapist, he tries to help people understand their behaviors and potential benefits and costs.

For example, high credit card debt may not lead to an "excellent" credit score or the funds you need if you want to buy a home in three to five years. If you can maintain or raise your credit score, you can qualify for better rates and lower payments on a future mortgage or car loan.

"There needs to be a shift away from shame and that you're a 'bad person' to 'how is this serving versus what is it costing you?'"

Changing behaviors doesn't happen overnight. Instead, embrace pursuing financial-mental health as a process that takes time.

9 Steps for Financial-Mental Wellness

Some research indicates that some people report lower stress despite similar economic strains. Try these small steps to shift your perspective.

1. Before Making Small or Large Money Decisions, Remember: HALT

Being hungry, angry, lonely or tired (HALT) may lead to less-than-optimal financial choices, Lombard said.

For example, feeling hungry while grocery shopping could lead to buying more than you need for the week. Shopping for a car while tired could lead to feeling overwhelmed by the numbers thrown around — and a more impulsive loan decision. Going thrifting when lonely could find you spending more than you'd planned.

Before making significant or stressful money decisions, ensure you've met your basic needs. If car shopping on a Saturday, eat a nourishing meal (and bring snacks) for long waits at the dealership. Try easing into an exercise routine, like regularly walking around the block to help with anxiety and set a regular bedtime to help make sure you're getting enough sleep.

2. Take Small Actions for More Agency

Agency is the feeling of control over your life's choices and consequences, and a sense of agency is linked to improved mental health. Rewarding small actions can increase your sense of agency.

For example, try saving even $5 a week or month through automated savings.

"While $5 a month may not seem like much, it can help you pay an emergency winter electric bill and keep the lights on," Lombard said.

3. Reframe Your Expectations

"Reframing can help change feelings about a situation," he said.

You may look at your debt and think, "I can't believe I have this much debt." If you can celebrate the progress toward paying down debt, it can shift your perspective.

4. Track Your Spending

The budgeting process can overwhelm most people, even leading to shame and anxiety over past choices. If reviewing past spending is too overwhelming, try tracking your spending in the present. Use a budget app, phone notepad app or paper and pencil to see how and where you spend.

Replace unproductive judgment and "shoulds" with curiosity and empathy, he suggested. Ask yourself, "I wonder how much I spent today and on what?"

Try it for a day, a week, and eventually a month. See if your spending aligns with how you want to spend money.

5. Reward Your Difficult Financial Steps

If necessary, try rewarding yourself for completing a tedious, complex or emotionally uncomfortable action. After you pay monthly bills, for example, call a friend or go for a walk at a favorite park. Choose a sustainable reward, since building a habit takes time.

6. Practice Gratitude

Focus on what your savings represent. If you've saved $60, practice statements like, "I'm thankful to have that $60 to spend on my gas bill or groceries this month when I had to miss a day of work." This can be more helpful than a shame-based thought like, "I only have $60 saved."

7. Limit Your Social Media Time

Social media has been shown to increase anxiety for many. Particularly if you're browsing and buying after viewing an influencer's expensive vacations, shoes, clothing or other items. Try to limit your use.

"Social media is for entertainment," Lombard cautioned. "If you're not feeling entertained and find yourself feeling envious, angry or sad, it may be better to go outside for a walk or play with the dog. Something that can be more beneficial for your mood."

8. Keep Learning

"For people who didn't grow up around investing, talking about investing seems scary and nebulous and something only rich people do," he said. Lombard grew up as one of four children of a single mom and knew little about investing until adulthood.

You can learn from websites, take webinars or classes, read books or consult with "a financial advisor who is a fiduciary and fee-only," he suggested. Fiduciary advisors are legally required to put your interests first when managing your money or property.

9. Get Help When You Need It

Finally, if your credit card debt is overwhelming, you hope to raise your credit score, or you're struggling to pay bills, professionals can provide helpful insights and suggestions. BECU partners with national nonprofit GreenPath to offer BECU members free, confidential and personalized financial counseling and debt management services.

You can also seek more in-depth assistance from professionals like Lombard to better understand your internalized "money scripts" and the relationship between mental health and financial health. Find a therapist at the Financial Therapy Association.

Finally, if you are in crisis due to debt or any other circumstance, you can contact the 988 Suicide & Crisis Lifeline by calling or texting 988 or live-chatting at 988lifeline.org.

BECU does not endorse nor accept liability for the advice or guidance provided by any medical or financial health provider. Before taking any action, you should always seek the assistance of a professional who knows your particular situation.

The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized financial, tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation when making financial, legal, tax, investment, or any other business and professional decisions that affect you and/or your business.

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Portrait of Lora Shinn

Lora Shinn

Lora specializes in personal finance topics for BECU, and has also written for regional and national publications such as The Balance, U.S. News and World Report, LendingTree, GoodRx, CNN Money, Bankrate, The Seattle Times, Redbook and Assurance IQ.