On World Mental Health Day, Carina Chambers, Pensions Technical Expert at digital wealth manager Moneyfarm, has shared how the relationship between financial wellbeing and mental health is increasingly evident, with systematic research across 37 studies clearly demonstrating their close connection.
Financial wellbeing extends far beyond account balances or income. It encompasses our ability to plan for the future, manage unexpected events, and feel confident in our financial decisions. What truly impacts mental health is not how much money someone has, but their overall sense of financial security and control.
Financial stress has emerged as a critical factor affecting mental health. Concerns about expenses, debt, and future financial security often contribute more significantly to anxiety and depression than absolute income levels. This psychological burden highlights the importance of viewing financial wellbeing as a preventive tool for protecting mental health.
At Moneyfarm, we have identified three essential pillars for maintaining financial wellbeing: having a defined time horizon for both short- and long-term planning, implementing proper risk management strategies, and ensuring appropriate diversification. These principles not only support financial resilience but also help reduce stress and anxiety.
Financial education plays a vital role in this process and in building confidence and reducing stress. By helping individuals understand their investor profile, define clear goals, and build resilient portfolios, we are supporting long-term financial outcomes and contributing to better mental health.
As we observe World Mental Health Day, it is crucial to recognise that taking care of your money is also taking care of your wellbeing. Financial wellness has become a public health issue and addressing it requires attention at both individual and societal levels. Through structured planning and education, we can help reduce the anxiety and stress often associated with money management, ultimately supporting better mental health outcomes for everyone.”
*Hassan, M. F., Mohd Hassan, N., Kassim, E. S., & Utoh Said, Y. M. (2021). Financial Wellbeing and Mental Health: A Systematic Review. Studies of Applied Economics, 39(4).
