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Managing Finances When Dealing With Depression

By Jacqueline DeMarco · June 06, 2022 · 7 minute read

We’re here to help! First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. Read more We develop content that covers a variety of financial topics. Sometimes, that content may include information about products, features, or services that SoFi does not provide. We aim to break down complicated concepts, loop you in on the latest trends, and keep you up-to-date on the stuff you can use to help get your money right. Read less

Managing Finances When Dealing With Depression

Depression is a major health issue that can impact all areas of our lives — including how we feel about and manage our money. Given that estimates of depression rates run as high as one out of three U.S. adults, this is surely an important topic to consider. If you or someone close to you is dealing with money depression or has mood issues that interfere with their financial management, you know how challenging this situation can be.

Keep reading for insight into how to manage finances when feeling depressed or stressed about money. Among the topics considered:

•   Is there a correlation between money and depression?

•   Tips for handling your finances when you are dealing with depression.

Is There a Correlation Between Money and Depression?

There’s the old saying that money can’t buy happiness, but there actually may be a correlation between having less money and experiencing depression. Depression is a mood disorder that involves constant feelings of sadness and can make a person experience a lack of interest in and enthusiasm for life.

Studies have shown that having a lower income is a risk factor for depression and that having a higher income can protect against depression. How? When someone has a higher income, they can reduce stressors. They likely don’t have to worry as much about paying bills and managing debt as those who have less money do. They also have the financial resources necessary to pay for the healthcare and treatment that can help with depression.

Tips to Manage Your Finances When Dealing With Depression

If you are experiencing depression, it may make it difficult to focus on managing your money. That symptom described as lack of interest in life may make it hard to prioritize finances or focus on wrangling them.

What’s more, financial worries might negatively impact your mental health. In these situations, you can consider taking the following steps to manage your money better when dealing with depression.

Apply a Helpful Budgeting Model

Budgeting can be a way to take more control of your finances and can help you figure out what your next steps can be to meet your financial goals. To create a budget and stay on track, you can tally up how much you typically spend in a month and subtract that number from how much you earn after taxes. You can then create a spending plan that helps you spend less than you currently do. Or you might integrate financial goals like saving for a down payment or paying down credit card debt. Having a strong budget in place can make it easier to know where you stand money-wise and keep finances organized. You’ll have a good idea of exactly where income is coming from and where spending is going.

There are different types of budgeting methods that can work well, but much depends on what will suit you personally. There are pros and cons to budgets, so if one method doesn’t work for you, don’t feel defeated. Instead, see if another budgeting method might work better. One to consider is the 50/30/20 rule.

Talk With Financial and Health Specialists

No one has to navigate depression or manage their finances alone — it’s always a good idea to ask for help if you feel you need it.

If you need help with your finances, you could work with a financial advisor to help you manage your money and make the right decisions to meet your financial goals. Delegating in this way can be helpful if you are feeling as if you don’t have the focus or expertise to do this yourself. It might be a positive move to let someone else handle these functions. A certified financial planner (CFP) is a great option as they can help you create a budget and make long-term plans for your financial life. If you are looking to invest, you can work with an investment advisor or a certified financial analyst (CFA). All of these professionals can help you learn the most important finance concepts needed to better understand how to manage money. It’s easy to feel like you are “bad” at managing money, but the truth is no one teaches us how to handle our finances. It’s not as if we’re taught any money management tips as a college student. Bringing in a trained professional can help.

Another important angle is to consider consulting your doctor or health insurance provider about mental health resources that may be available. These services may help you manage and improve your mood. There are mental health specialists who focus on helping people who are depressed about money. If this describes your situation, you might search for a therapist with those qualifications to get help with your money depression.

Another option: Contact the Substance Abuse and Mental Health Services Administration’s National Helpline which is a free, confidential treatment referral and information service that is available 24/7, 365-day-a-year.

Tackle Your Debt

It’s easy to see how having debt can bring a lot of financial stress and anxiety into your life. Not only can debt result in high interest charges, it can hurt your credit score. When creating a budget, going beyond just minimum credit card payments and making extra or higher debt payments can help pay down debt. It’s possible to work with a credit counselor to make a plan for getting out of debt. This may help alleviate depression about money to some degree.

Employ an Emergency Fund

Having an emergency fund at the ready when unexpected expenses arise can make those moments much less stressful. Medical bills, car issues, and home repairs can come out of nowhere. If possible, it’s a good idea to carve out a little extra room in a monthly budget to contribute to an emergency fund. That way, if emergency expenses do arise, turning to a credit card or loan won’t be necessary. Experts recommend that people aim to have several months’ worth of basic living expenses in an emergency fund.

Utilize a Savings Account for Future Progress

Alongside an emergency fund, it’s wise to work on building up overall savings. Making financial progress feels good; it also helps us work towards larger future goals and provides a buffer if and when a budget feels a bit tight. It’s possible to open a high-yield bank account that offers interest on savings, so your money can grow over time.

Take It One Step at a Time

Navigating managing money while struggling with depression can be challenging. In this situation, it can be helpful to be patient with yourself as you work through your mood and financial goals. Taking things one step at a time can help you make steady progress without feeling overwhelmed.

The Takeaway

Struggling with feelings of depression can be challenging, especially when you are trying to navigate money matters as well. Take small steps towards gaining financial control by creating a budget, working with financial and mental health professionals, and creating an emergency fund. These moves can help alleviate financial stress that can contribute to depression and also help you manage your money wisely.

To make managing money easier, consider banking where product features are designed to help you get the very most out of their money. That’s what we offer here at SoFi. Open our Checking and Savings with direct deposit, and you’ll enjoy access to your paycheck up to two days early, plus earn a competitive APY. Your money will make more money, and you won’t pay any account fees either.

Better banking is here with up to 4.60% APY on SoFi Checking and Savings.

FAQ

Is it normal to get depressed over money?

It can be quite normal to experience money depression because of financial issues. Studies have found that having a low income is a risk factor for depression. Having a higher income has also been found to help protect against depression by reducing stressors and providing social resources. Plus financial resources may also be used to pay for treatment for existing cases of depression.

What does financial stress look like?

Financial stress can look like other major forms of stress and can impact someone’s physical and mental health. This, in turn, can diminish their relationships and quality of life. Someone experiencing financial stress may feel ashamed, scared, or angry, and they may lash out at their loved ones. Financial stress can lead to feelings of depression as well.

What do you not say to a financially struggling person?

There are no hard and fast rules for what someone should or shouldn’t say to someone feeling depressed about money. Try to be sensitive to their situation. Don’t diminish their emotions and make it seem as if it’s simple to overcome their issues. Be compassionate, and offer support when possible.


SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.


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