Financial Stress: Can Money Affect Your Mental Health?

Do you get anxious when you open your bills?

Ever felt guilty when you purchase something you want but don’t really need?

You’re not alone. Financial stress has been hitting Malaysians hard with 41% agreeing that financial stress is affecting their mental health, in a 2021 study conducted by Credit Counselling and Debt Management Agency (AKPK)

2022’s rise of inflation and the markets experiencing a downturn has got us pressed. And that’s completely valid. 

So before our hair thins out anymore, let’s look at what we can do to cope. 

In this article

  1. Recognise that cycles happen
  2. Prioritise on what you can control
  3. Track your spending
  4. Adjust your budget

1. Coping strategy for financial stress – Recognise that cycles happen

Like economic cycles, this is just a cycle. That means that inflation may alleviate in the future. 

So hang in there because there’s brighter days ahead. 

In the meantime, it’s incredibly important that you focus on your mental health. Find your motivators, keep aligned to your goals, and remember that your journey is your own. 

2. Stop stressing about money and prioritise on what you can control

First off, repeat after me: it is what it is. 

We can’t control things like inflation, war, or economic cycles — those things are wildly out of our control.

Unless it’s up to us to bring chicken prices down (RM17 per kg? Please), the better option is to focus on what you can do. 

If your stressor is:

  1. Low income – Consider getting a side-gig where you can earn additional income. You can also earn free money by taking advantage of certain campaigns such as Versa’s Referral Bonus

  2. Low savings – Time to start assessing your spending and plan on how to recuperate your savings. You can take the extra step to hedge your savings against inflation. Save in accounts that lets you enjoy higher interest rates such as Versa Cash.  

  3. Overspending – Our advice? Delete your shopping apps from your phone. Shopping apps are designed to make you spend more with irresistible discounts and cashbacks. You can also set aside a certain amount of Treat Yo’self money each month to scratch that shopping rush itch. 

This way you can work towards managing your stress while improving your financial status productively.

3. Track your spending to reduce financial stress

“But seeing the amount of money I spend stresses me out!”

Yes, it can be stressful at first, especially with how aware you become everytime you pull out your wallet. Here’s the thing: it helps you keep track of meeting your financial goals. 

Tracking your spending also helps you know:

  • How much should be in your emergency fund

  • The contents of your monthly budget

  • What you can cut out from your spending

In the long run, you can cultivate more financially healthy behaviours. In turn, it can lead to bigger progress to financial health and ease your financial stress. 

This leads us to our final point…

4. Adjust your budget as part of financial stress management

Adjusting your budget can help you re-prioritise your spending and save more. It may mean reducing or even giving up certain luxuries such as fancy café food and spontaneous trips. 

We know it’s tough to part with those. Our suggestion to start you off is to pay off your essential bills first. Once you do, you have a clearer picture of your finances and where else you can allocate the rest of your pay. 

Keep in mind that you need to save what you can. Times are hard and purse strings are tight. But no matter the circumstances, it’s important to practise saving as it adds on in the future.