How Living Paycheck to Paycheck Affects Your Mental Health

A hand coming out of the water, signifying how our mental health is affected by financial stress

My husband and I lived paycheck to paycheck for most of our marriage, and yet it wasn’t until about a year ago that I thought of it this way.  It had become normal for us: use up everything we make so we run out just before we get more. It was always good enough to pay the bills and put food on the table.

Yep, we settled for “good enough”.

My husband has never been interested in money matters, so I take care of the finances.  This means I look at our mounting debt, our pile of bills, our dwindling savings, and that looming mountain up ahead that we’re going to crash into if we don’t find a better way.  It’s hell on the thinker.

Living paycheck to paycheck adds a multitude of negative consequences to your life, like limiting your choices, keeping you stuck in a dead end job, and preventing you from getting out of debt.  But I think how it affects your mental health is the most damaging consequence of all.


The Effects of Stress

According to the American Psychological Association, financial stress is the top cause of stress for Americans.  When you live paycheck to paycheck, most likely you are one setback away from not being able to pay your mortgage, and this can lead to significant anxiety.

There are many negative physical ramifications from stress, like having trouble sleeping, eating unhealthy food, getting headaches or muscle tension, and experiencing excessive fatigue.  Even worse, if your stress is chronic, these symptoms can develop into more serious health issues such as heart disease, obesity, and even cancer.

But there is also an adverse impact on your mental health, like suffering from a state of hopelessness or guilt. Some even feel shame over the choices they’ve made and the position they’re in.  A constant state of worry, doubt and fear can make a person feel like there is no way out.

And then there is what some professionals call an “existential cost” to being financially unstable.  If you’re wracked with a lot of debt, living paycheck to paycheck, unable to pay your bills on time, or all of the above, this can really take a toll on your sense of self-worth and purpose in life.

You may feel less motivated because you believe you’re stuck in your situation, and there’s no point in striving for bigger goals because that would require some risk you’re too afraid to take.  This can lead to limiting beliefs and low self-esteem, which can prevent you from enjoying life and ultimately cause you to turn to negative coping strategies, like excessive drinking or overeating.

Yep, living paycheck to paycheck doesn’t just affect what you’re having for dinner, or where you buy your clothes.  Living under financial stress can have very real consequences on how you think and feel about yourself.

I know, I’ve lived it.


Money’s Mental Stressors

When I really started to examine my thoughts in relation to our finances, I discovered that a lot of my negative thought patterns were connected to our financial problems.  I identified three mental stressors, each with a related feeling that compounds its effects:

  1. Lack of hope / Loss of motivation
  2. Worrying about the future / Anxiety
  3. Low Self-esteem / Shame

Each has its own unique consequences, but they all build on each other and contribute to an unhealthy mentality called a fixed mindset, which I’ll explain below.


#1  Lack Of Hope And Motivation

Financial stress can really kill your dreams.  When you’re just trying to make ends meet, it’s challenging to have hope for a better future.

You see, when you’re so focused on just getting through the week,

(Can I be late on this bill and not be charged a fee? 

Do I have enough to make all the minimum payments? 

Is there enough left over for food and gas? 

How are we going to pay for our son’s birthday gift?)

it’s hard for your brain to be future-oriented.  When all your energy is going towards the mess that is right in front of you (what you consider urgent), then you don’t have any left for your dreams and goals (which are important but non-urgent).  And if you’re just focusing on the urgent, then everything else gets pushed to the back of your mind, until you’ve practically forgotten all about the goals you used to have.

You get so used to your situation that you don’t think about how you could change it.  Even with all the stress and frustration, you reach a strange level of comfort and never try to break the cycle.

You lose hope in fulfilling your dreams and motivation to reach your goals.  And when you lose both of those, it’s inevitable that you’ll lose your purpose and direction in life. 

This is what’s called a fixed mindset, and it will keep you stuck in the paycheck to paycheck hamster wheel as long as you keep it.


#2  Worry And Anxiety

My dad was a worrier.  I used to think he was overreacting, but now that I’m older with major responsibilities of my own (children, home ownership), I get it.  Now I’m the worrier in my family.

Being financially unstable can create a lot of worried and anxious thoughts.  These thoughts feed the fixed mindset and keep you responding to situations from a place of lack.

For example, maybe you worry about your husband ordering a beer with dinner because you know it will add $8 to the tab.  Or you feel nervous when your child hands you a permission slip that requires a check. Perhaps you have anxiety about not having the money to help your kids get through college or not having enough in your retirement fund so you think you’ll have to work until you’re 80.

I worry about all of these things.

And all this worrying can really suck the joy out of life.  It can prevent you from being fully present and engaged. It steals the fulfillment that generosity can bring.  And it creates an unproductive mentality of limiting beliefs, which keeps you stuck in the fixed mindset. Where all your worries come true.

However, financial instability can also cause feelings of shame and insecurity, which makes it difficult to break unhealthy thought patterns.


#3  Low Self-Esteem And (Gasp!) Shame

My husband and I just turned 50, and we still struggle with our financial management.  This can sometimes make me feel immature and childish. Then, when I’m around others my age, I feel like I don’t “measure up” as a grownup.

This is called money shame, and it’s a real thing.

In many cultures (including America), we tend to judge people based on their financial standing.  And if you’re not keeping up with the Joneses, you can feel like a failure.  You’re ashamed of your small paycheck, or your low bank account, or being irresponsible with money.

You see your experience with money as an extension of who you are, rather than what you’ve done.

This negative self-perception not only leads you to think less of yourself than you should, but may also interfere with how you interact with other people.  When you avoid others or choose to not be authentic, you miss out on deeper relationships and subsequently a greater quality of life.

Feeling “less-than” then feeds into a lack of motivation to improve your situation because this would require some risks, which low self-esteem will keep you from doing.  

And the cycle starts all over again.


Self-Care And Coping Skills

This year, I decided to be intentional about developing healthy habits for my emotional and mental well-being.  Life was just beating me up, and I realized that good health was much more than physical.

If you’re living paycheck to paycheck, I know the stress you’re feeling.  Money has its hand in so many areas of our lives, so the anxiety you might be experiencing can reach far beyond just the budget.  

Your situation isn’t going to change overnight, but you can practice mindfulness to help keep things in perspective right now.  There are literally hundreds of coping skills to help with this.  

And when you can see your financial mess for what it is – something temporary that you’re capable of turning into a financial success – then you can also give yourself the space to start dreaming big again.  And this will give you a renewed sense of purpose and motivation.

Something else that’s helpful is scheduling more time for self-care.  In other words, *me time*.  Be intentional about taking care of you, which will also help minimize the effects of stress.  This means adding leisurely activities that you enjoy doing to your daily schedule.  Because, although it’s not urgent, it’s extremely important!


Related Post:  A Written Life Plan: 5 Simple Steps How & 11 Powerful Reasons Why

In A Nutshell

When finances are unstable and you can’t see a way out, negative thoughts can become overwhelming.  These thoughts create feelings like stress, worry and anxiety, which then drive unproductive behaviors that lead to negative results.  Those results then confirm the thoughts that started it all.

This cycle strengthens a fixed mindset, which keeps you stuck in this pattern until eventually, you feel like it’s normal.  You start to *believe* that this is just how life is.

But you can challenge your thoughts.  And when you identify which thoughts are wreaking havoc on your mind, you can take steps to take better care of your mental health.

  • Find coping skills that work for you
  • Practice mindfulness and meditation
  • Schedule enjoyable activities

Taking care of your mental health is just as important as taking care of your physical one.  But, just like working out and finding healthy recipes, you need to be intentional about how you cope with stress and scheduling time for self-care.

Because once you have a healthy mindset, it’s easier to keep problems in perspective and see the bigger picture.  And for me, that includes financial freedom.


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