There are a number of important reasons to consider your mental health when making a financial decision. A poor mental health can have a negative impact on your finances and your future. Fortunately, there are some steps you can take to address your mental health and improve your ability to make a sound financial decision.
Increase your financial literacy
If you want to have a healthy mental state and a financial decision that will last, you need to increase your financial literacy. Having a solid understanding of money can help you handle many of life’s challenges, including paying off debts, investing, and saving for your retirement.
A growing body of literature suggests that psychosocial factors can account for a large number of variations in financial behavior. Several psychosocial traits are associated with financial literacy. Consequently, it is important to explore the relationship between these psychosocial factors and financial literacy.
One of the main objectives of the Health and Retirement Study (HRS) is to measure financial literacy in older adults. It is conducted by the University of Michigan and funded by the Social Security Administration.
The HRS is a nationally representative survey of older adults. Approximately half of the core survey respondents took the Psychosocial Leave-Behind Questionnaire. This questionnaire measures three psychosocial factors: personality, social support, and chronic stressors. These factors are merged with the core survey data.
Create a budget
Managing finances can be difficult. But there are ways to do it without overextending your bank account. Developing a budget can make your life easier in many ways. Budgeting helps you prioritize and track your spending, so you can stay on track with your goals.
While there are a number of things to consider when creating a budget, one of the more important is to create a budget that makes sense to you. You’ll need to take into consideration your income, living expenses, and long-term goals. For example, you may want to set aside money to cover an emergency.
The first step in making a budget is to identify your monthly expenses. List your income, your bills, and any other fixed expenses. Next, subtract your total expenses from your income. This will give you a rough idea of how much you are spending on each item.
It’s best to start with the most basic budget you can come up with, and then you can add on other items as you make your way through the month. Some suggestions for starting out include a zero-sum budget, which will allow you to use all of your income to pay off debts.
Lift boundaries
One of the best ways to lift your spirits is to take a break from the daily grind and reconnect with your loved ones. The best part is, you don’t have to shell out a bunch of cash for an expensive therapist. This is especially if you are lucky enough to have a supportive spouse. Luckily, there are a plethora of free resources at your disposal. Some of these include online games, videos and articles. You may even stumble upon a local support group or two. Obviously, you can’t be expected to have it all at once. To help you keep it all in check, be sure to check in on a regular basis.
It’s no secret that many of us are prone to a bit of pixie dust from time to time. But when it comes to dealing with loved ones, you are bound to be a little less oblivious to the things that make you happy. Taking the time to set up some healthy boundaries can go a long way towards ensuring that you get the time of your life.
Talk to a mental health professional
If you are dealing with a client who seems to be stressed out about their finances, you may want to consider referring them to a mental health professional. A recent Fidelity study discovered that 73% of respondents said it was harder for them to make financial decisions when they were experiencing poor mental health. However, if you are unsure who to refer your client to, you can talk to them and discuss what to expect.
Generally speaking, people who are in good mental health are not afraid of talking about their money. On the other hand, people who have a history of anxiety or other mental health issues may avoid discussing their finances. This can have a negative impact on their overall health. It can also lead to impulsive spending, a lack of motivation to save, and other negative financial behaviors. In addition, a person’s feelings about their finances can have a wide variety of consequences.