Debt and mental health: How to tackle your money worries this Blue Monday

With the cost of living crisis increasing stress and anxiety around household finances, we’re urging people to tackle their money worries this Blue Monday (16 January).

Our data shows that, at the end of December 2022, the average total of unsecured debt in the UK stood at £18,691, a rise of almost 3% since 2020.

As rising energy bills and mortgage and rent payments, as well as the cost of other essentials, continue to rise, debt experts are concerned about the knock-on impact to mental wellbeing.

In fact, a survey carried out by Money and Mental Health revealed that almost one in five (18%) people with mental health problems are in problem debt.

And while a quarter of people (27%) in the UK have pledged to improve their finances in 2023 as a new year’s resolution, the reality is for many people the thought of dealing with debt is daunting.

With that in mind we’re looking at how you can beat Blue Monday and regain control of your finances with five positive steps you can take.

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Mental health and finances are linked

There’s an undeniable link between mental health and finances.

Living with debt doesn’t just affect your bank balance, it can impact relationships, your health and your mental wellbeing.

While it may be tempting to bury your head in the sand when it coms to dealing with debt, this can often just make the issue worse.

Speaking of the importance of knowing where to turn for support, Creditfix regional manager Layla Johnson said: “Our personal finances and mental wellbeing are inextricably linked – and changes in one area can have a significant impact on the other.

“Poor mental health can make it challenging to manage your money and worrying about finances can have a significant negative effect on your mental health. It only takes a small change to your circumstances for this to become a vicious cycle.

“A lot of people still feel embarrassed talking about money and it can be a very overwhelming and daunting experience if you’re facing unmanageable debts.

“One of the biggest things you can do if you’re struggling with debt is to identify the problem first. Burying your head in the sand won’t make the issue go away so try not to shy away from any letters or emails.

“Once you get to the root cause of the issues, it’s time to seek help. A professional can go through your situation step by step, and many people are amazed at the number of solutions out there, many of which can be tailored to your specific needs.

“Many people are also amazed how relieved they feel after taking those first steps to address the challenge – never underestimate the power of talking and sharing your problems.”

Finance tips for 2023

Layla has also shared her top tips to getting on top of your finances in 2023:

Reassess your outgoings

Coming to terms with your own financial situation is a vital first step to find a solution. Taking the time to properly process your finances will create a better picture of the key issues, helping you to manage the emotional effects of being in debt while building strong foundations for moving forward. Use the start of the year as an opportunity to review any standing orders and direct debits to cut down on unnecessary spending.

Set up budgeting habits 

Creating a realistic budget of all living costs, including rent or mortgage payments, council tax, TV licence, utility bills, broadband bills, food and transport will give you a better idea of what finances you have left to play with for the rest of the month, once all essentials are paid for. Having a clear understanding of your incomings and outgoings can help to relieve the stress of checking your account balance or an unexpected bill.

Set realistic saving habits

 Make sure you set specific targets, keep reminding yourself why you are saving. Set yourself money milestones to hit throughout the year to achieve your goal. It could be something like saving £10 a month to help with Christmas spending or having a bigger goal like saving £1,000 this year to put towards a holiday.

Don’t bury your head in the sand

It might not be easy to hear, but listening to others opinions can help see a financial situation in a new light, and others may be able to help you find the best support. Opening up about financial difficulty can often be a difficult conversation with many fearing judgement and embarrassment. Talking to people who will be patient and understanding will help with this. The sooner people talk to a trusted someone about their debts, the sooner they will be able to seek solutions and fix the problem.

Seek professional support

We know that debts and mental health are closely linked so if you are concerned, be sure to seek professional support as soon as possible. Whether you choose to contact a debt advice specialist or speak to your GP to address your mental wellbeing, experts will be able to signpost you towards the best solution to tackle these challenges head on.

If you’re worried about debt, talk to Creditfix. Our advisors provide support and guidance to help people find the best debt solution for their needs.