Depending on how we manage stress, our mental well-being and health could be at risk. Each day, we encounter a variety of stressors, creating triggers that, when pulled, can harm our peace of mind. Pressure at work and problems at home are common reasons for emotional issues. When these issues go unchecked, we are more vulnerable to additional future stressors.
Stress impacts most bodily systems, and it’s up to us to minimize those health risks. As we determine the things connected to our high blood pressure, night sweats, shortness of breath, or body aches and pains, we usually miss the largest challenge to mental well-being—money.
In a recent national survey, the American Psychological Association reported that 83 percent of U.S. adults cite inflation as their top reason for stress. This is greater than racial inequality, talking about politics or religion, or even violent crime in any community. Our financial literacy—or lack thereof—could contribute the most substantial burden on our emotional well-being.
Money and stress are intrinsically connected. Without proper knowledge of that relationship or the skills to fix it, stress will cause peril and a turbulent emotional state. The secret to gaining a greater sense of security with money is mastering the “locus of control.”
The Locus of Control and Protecting Our Mental Well-Being
Psychologists and therapists call a locus of control “the degree to which an individual feels a sense of agency in regard to his or her life.” Having an external locus of control means we feel like things happen to us, while an internal locus of control means we feel like we can control our outcomes.
Life can become difficult to manage without firm financial literacy knowledge. Hopelessness, anxiety, shame, and fear all stem from money stress. When all those negative emotions combine, we feel we have zero control. When we lack that feeling of power, spending money is a common coping mechanism.
What internal locus of control related to money can we create when stress overwhelms us?
- Find advice or counsel. A financial therapist or well-documented insight elsewhere can greatly reduce economic stress by helping us understand the connection between our mental well-being and finances.
- Know your numbers. Invest in software or a financial professional if math isn’t your thing. Your financial numbers matter, and understanding them matters even more.
- Get organized. Knowing what money is coming in and going out is valuable, but knowing what categories those dollars belong to is priceless.
These simple tasks help us understand what may need to shift in our money patterns and spending habits. Knowing the connection between internal and external loci, symptoms, and stressors helps us understand our coping mechanisms and pinpoint the source of the problem.
Connecting Money and Mental Health
While money terms and learning about money can feel scary at times, financial literacy engages us in the economic systems around us. Education and insight into financial terms and how they work make that engagement permanent. The Financial Industry Regulatory Authority (FINRA) has a quick quiz about financial literacy that shows people with higher financial literacy are “more likely to live within their means.”
I tell many of my financial therapy clients, “Knowing what foods are better for us doesn’t mean we always eat healthier. But it can give us a starting point.” One key piece of changing our relationship with money is learning more about how money works. Another key piece of our relationship with money is changing the psychological processes of how we deal with money.
If you feel like you know the right thing to do but are having a hard time doing it, there may be psychological barriers to following through on your money plan. Working with a financial therapist or other mental health professional can be a start to identifying what beliefs, emotions, traumas, and other difficulties may keep you from moving forward in your financial life.
Remember: While there are things out of your control with money, there can be a whole lot that you can control. Focusing on those things can help you move in the right direction.
