If money makes the world go around, what happens when you don’t have enough? Anxiety and depression, the experts say.
As the world observes Mental Health Awareness Month, the critical connection between financial stress and mental health took centre stage in a recent online “Ask the Expert” interview hosted by the South African Depression and Anxiety Group (SADAG). Dr Marion Borcherds, senior manager and head of employee well-being at AfroCentric, a Sanlam subsidiary, and Benay Sager, executive head at DebtBusters, shared valuable insights on how financial pressures can significantly impact mental well-being.
According to a recent AfroCentric financial well-being programme, 70% of participants struggle to cover their monthly expenses with their salary alone. The 2024 Sanlam Benchmark Survey found that 43% of respondents reported financial stress affecting their mental health, while 26% said it was impacting their physical health.
DebtBusters’ 2024 Money Stress Tracker – one of the largest online surveys about how financial stress impacts other aspects of life – found that South Africans’ levels of money stress remain elevated, with 75% of respondents saying they feel financially stressed. Of these, 93% said it was negatively affecting their home life, 76% their work life, and 74% their health.
During the interview, Sager highlighted the increasing stress consumers have faced since 2015.
“It’s the lack of growth in terms of real growth, in terms of salaries, that’s been a major source of stress for a lot of people. And what that has meant is that they will have to borrow to make ends meet,” Sager said.
Read: Why your salary feels smaller: purchasing power plummets as debt levels soar
He further noted that the situation worsened after 2020, because many families had fewer employed members due to the severe lockdowns during the Covid-19 pandemic.
“The few family members being employed [were] having to borrow on behalf of other family members as well,” Sager said.
Pointing to the convergence of high interest rates, inflation, and unemployment, he said: “The South African consumer is not in a great space.”
Signs of financial stress in the workplace
According to Borcherds, financial stress manifests in various ways in the workplace. It often shows up as anxiety, which can sometimes escalate into depression. Other behaviours linked to financial strain are absenteeism, particularly at certain times of the month. Additionally, she said there is sometimes a noticeable connection between financial stress and substance abuse.
“Ironically, you would think that people who are financially stretched and don’t really have the resources would really not have the wherewithal to procure drugs. I’m saying drugs and using substances more broadly, or alcohol. But indeed, it does happen.”
Discussing the link between financial insecurity and mental health disorders such as anxiety and depression, Borcherds noted that these disorders can stem from various factors. However, she said their data shows financial distress is often at the root of anxiety and depression in the workplace.
“It’s a bit of a vicious cycle as well. Research has also shown that people with financial ill health also are twice as likely to develop a medical condition. And of course, then it amplifies things … You are now needing to pay for medical bills.”
Culture of avoidance
Having run the Money Stress Tracker for three consecutive years, Sager noted that DebtBusters has found a clear correlation between financial stress and other areas of stress in people’s lives, whether it is related to health, employment, or family life.
“We know psychologically, people react in a few ways when faced with a difficult or unexpected situation. They are either going to run, which is the flight. They’re either going to fight it, they’re going to do something about it, or they’re going to have fright.”
Sager said that when it comes to debt and the psychology surrounding it, they found there is often a tendency to avoid addressing the issue. He said what they frequently see is the attitude of, “Oh yes, it’s a problem. I know. But you know what? Today is not the day to deal with it”.
“In the short term, it ends up in a bit of avoidance culture, which we do see quite widely in our country. There’s avoidance of paying for electricity, there’s avoidance of debt, there’s avoidance of many other things that we don’t really want to deal with,” he says.
Read: South Africans ‘ignore’ debt woes: survey highlights growing financial strain
However, he noted that they have also observed a fourth reaction – flock.
“We’re seeing, whether it’s via stokvels or other means, of [people] just kind of supporting each other financially and otherwise. And I think that’s a brilliant thing, flocking together, and we certainly see much more of that with women.”
The role of financial literacy in alleviating mental strain
Regarding financial literacy and its potential to alleviate the mental strain associated with financial difficulties, Sager emphasises the need for more targeted initiatives. He suggested that these efforts should concentrate on basic concepts, such as understanding the long-term costs of borrowing money and the mechanics of credit scores – specifically, what they signify and what constitutes good or bad financial behaviour.
“Right now, everything looks a bit scary for many individuals, these big terms that are being thrown around, often that they don’t understand, on radio and TV. I think we need to bring it back so that we can be a bit more comfortable with [our] finances.”
Sager said, in the end, we all need credit, we all need to borrow money.
“Otherwise, none of us can own homes, let’s be honest. But it’s about protecting us before that credit becomes burdensome. What do we need to put in place? From an education perspective, that’s when it can help people become mentally more relaxed about finances,” he said.
Borcherds agreed that financial literacy initiatives tend to be overly broad and should be divided into smaller, more digestible segments to enhance understanding. She noted that a significant percentage of employees accessing AfroCentric’s financial coaching services said they wanted to be more financially organised.
“And when we drill down a little bit, it was definitely around financial literacy. But we had to break it down into smaller little chunks in terms of, what do you actually mean by that?”
She remarked that discussing finances is often the most difficult conversation, adding that she frequently heard from their financial coaches that it was challenging, particularly the initial conversation, which tended to be uncomfortable.
“It’s like mental health, difficult to talk about, particularly in the workplace. It’s a perfect storm, financial stress and mental health. But they are those conversations that need to be had,” she said.
Breaking the cycle for better well-being
Ross McMillan from Momentum Financial Planning advises that taking proactive steps to enhance financial security is a crucial first step towards improving mental well-being and regaining a sense of control.
“When you understand the connection between money and mental well-being, you can take meaningful steps toward improving both,” McMillan said.
He provides some advice on how to break the cycle and foster a healthier balance between your money and your mind:
Recognise the link between money and mental health
Understanding that your finances are likely affecting your mental health is the first step towards breaking the cycle. Many people feel overwhelmed by debt, bills, and other financial obligations, but they don’t always realise the toll it takes on their emotional well-being. McMillan explained: “Acknowledging this connection can help you approach both your mental health and your finances with more clarity.”
Create a budget
Budgeting is often viewed as limiting, but it’s really about taking control of your finances. “A budget is a roadmap for your money,” McMillan said. “By knowing where your money is going, you reduce the uncertainty that causes stress and anxiety.” A well-structured budget can help you to prioritise necessities, manage debt, and set aside money for savings – while giving you peace of mind.
Seek professional advice early
Many people wait until they are in deep financial trouble before seeking help, but addressing these issues early can prevent anxiety from escalating. “Talking to a financial adviser can help you develop a plan to tackle debt, build savings, and manage expenses,” McMillan said. “Even the act of discussing your finances with an informed neutral party will provide some sort of relief – giving you a clear vision of the path forward.”
Access mental health support
Mental health professionals can help you to navigate the emotional triggers behind your financial habits. “If anxiety or depression is leading to impulsive spending or financial avoidance, professional help can provide the tools to manage these behaviours,” McMillan said.
Take small steps to regain control
When both your mental health and finances feel overwhelming, McMillan said it is important to start small and work your way forward. “Focus on manageable actions, such as paying off smaller debts or setting a weekly budget for discretionary spending. These small wins can build momentum and give you the confidence to tackle bigger financial challenges.”
