Money Talks: Covid stress has put my spending out of control

Carol Brick of answers a reader's question about how to manage your money habits when your mental health is suffering
Money Talks: Covid stress has put my spending out of control

Money Talks: My mental health is suffering over money worries.

Since the pandemic hit, I have been suffering from severe stress and burn out and my mental health has taken a turn for the worst. Consequently, I have lost all control of my finances. I have been indulging in out-of-control spending and missing loan repayments etc. What can I do to address this situation which is now out of control and making my overall health situation even worse?

You are not alone; our lives have experienced severe unrest over the past eighteen months, and many are in the middle of or on the verge of burnout and despair. When a person is struggling with their mental health, they behave differently towards their finances and are much more likely to engage in behaviours such as unnecessary and uncontrollable spending and turning their back on debts, personal budgets, and financial goals.

Burnout and stress can be incredibly overwhelming and making good financial decisions during this time can be almost impossible. Here are some tips to kick start your journey to financial wellness.

Money Mindfulness

Mindfulness is the concept of paying full attention to the present, without judgement. When mental health issues are present, it is usually next to impossible to stay in the present and many people avoid even checking their bank balance. Practising money mindfulness helps us to confront difficult negative feelings, breathe, and enter the right frame of mind to face our financial challenges head-on. It will also help you to become more aware of exactly how you spend, save, and invest. Emotions impact money management in many ways. Your out-of-control spending is providing a temporary “high” when you need cheering up. Practising money mindfulness will assist you to gain control of this emotional response to money and to seize back control.

Review and Restart

You need to review and “restart” your overall financial plan. Look at your recent financial habits as belonging in the past and now concentrate on moving forward only.

Make a budget and set realistic financial goals 

Review your current income and spending in detail. Budgeting properly now will help you regain control over your finances and allow you to stop overspending. Figure out what percentage of your income you can put towards savings, and this money will go towards addressing your current debts.

Don’t panic

As regards your debt, don’t panic as paying it off immediately is unrealistic. By following your new budgeting plan which will achieve savings, you will be able to take the first steps towards addressing your debt. Look at the various options available to you like consolidating and perhaps refinancing some of your loans. Ditch your credit card for good and try and negotiate a lower interest rate for your credit card debt. If necessary, move to another provider with a 0% APR introductory rate. You need to communicate immediately with your bank to discuss and review the various options available to you to help you to clear your debt.

Ask for help

Reaching out to family, friends, or a professional financial planner to get advice will greatly help your financial wellbeing. Whether it’s needing to know more about your money or help with making better financial decisions, having the right people at your side will help you get to a better place.

Be Patient 

Aim for small victories along the way rather than expecting to transform yourself overnight. You should firstly congratulate yourself for writing to me as this means that you have taken that all important first step towards improving your overall well-being and I wish you all the very best on your journey.

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