Nikki Bond, Intern, Money and Mental Health
What does FinCap week have to do with mental health?
Today marks the start of the Money Advice Service’s FinCap week, which aims to showcase and amplify the work underway to improve the nation’s financial capability, that is: the skills, mindset and confidence to manage money well.
Managing our finances can be a challenge at times, whether this is trying to make ends meet on a tight budget, living with a variable income due to precarious and uncertain employment contracts; or simply trying to make sure that our money stretches as far as possible and ensuring we get a good deal.
Our ability to manage our money (our financial capability), affects all of our lives, and struggling with this can have a very real impact upon our emotional wellbeing. The impact of this can be even greater if we’re struggling with mental health problems.
Recognising and supporting at times of reduced financial capability
Against this backdrop, I wanted to take a minute to reflect back on my own experience this time last year. I was working within the financial services industry, supporting customers with mental health problems to manage their finances and budgets. For me, it was a real privilege to support people during what were some of the most difficult times in their lives. The people I worked with were often struggling with reduced financial capability as a consequence of their mental health problems, and the devastating impacts of this. This might include spending excessively during a bipolar manic episode; or having limited understanding of the running of their accounts or how to avoid incurring overdraft charges. Having an understanding of the fluctuating nature of financial capacity, and the possible impact of common mental health problems on cognitive abilities, really helped me in supporting people with their finances and budgeting.
Mental health problems and the impact on FinCap
“I had no notion of how to budget, and during my most depressed episodes I just didn’t have the energy or concentration to track where the money was going.”
In my new role at Money and Mental Health, I’ve been pleased to see the evidence growing to support others to make this link. Our report ‘Seeing through the Fog’, published at the beginning of this year, sets out how mental health problems might affect a person’s ability to manage their finances. It demonstrates how an understanding of different mental health conditions, and their possible cognitive impacts, can enable firms to tailor their support to an individual’s needs, whether that’s a bank, energy provider or insurance company.
Our research has shown that consumers with mental health problems believe their behaviour changes dramatically during periods of poor mental health. 93% say they spend more when unwell, 71% have put off dealing with creditors and 59% have taken out a loan they wouldn’t have taken out otherwise. These are clear indicators of changed financial capability.
“When manic I lose the ability to understand the consequences of my actions, I spend more money than I have often on things I think I need but don’t really e.g. a guitar which I don’t know how to play.”
Fluctuations in financial capability
But it’s not just in our professional roles that we need to think about financial capability – it’s important in our own lives too. Even where we don’t have mental health problems, our ability to manage our money is connected to how we feel. It’s likely that most people can identify with feeling low and treating ourselves to ‘cheer ourselves up’, or excitedly buying something despite knowing it will make it hard to make ends meet. Equally it’s important to recognise how our own financial capability can fluctuate, impacted by significant life events, such as bereavement, family crisis, or separation. Where other matters in our lives take priority, we can sometimes take our eye off the ball, often resulting in our financial capability being briefly compromised.
Getting the conversation started
The aim of FinCap week is to get more people talking about money – in both a personal and professional capacity. What we’d really like to see is as part of that is more people talking about money and mental health together; recognising the relationship between the two, and the impact it has for all of us.
You can take part in FinCap week by:
- Registering to attend the TalkMoney conference, where you can hear our Chair, Martin Lewis
- Joining the conversation on Twitter using #TalkMoney