Money and mental health

Financial health and mental health are linked.

Financial challenges can cause significant stress, which can impact our mental health and wellbeing. Similarly, the state of our mental health can make it harder to get on top of our finances. 

Who does it affect?

All people in Australia can be affected by mental and financial wellbeing challenges, however: young adults, women, First Nations Peoples and small business owners are more vulnerable to financial and mental distress.

From April to September 2022, the proportion of people identifying as 'struggling' financially increased 1%. This group has been steadily increasing since January 2019. The proportion of people who say they financially have 'no worries' is also decreasing.

Money infographic_1

Certain groups are more likely to have experienced financial hardship in the past 12 months. These include:

  • People aged 35–44
  • People who identified as gay, lesbian or bisexual
  • People living with a disability, health condition or injury
  • People who provided unpaid care, help or assistance to family members
  • Single parents living with dependent children
  • People who are not employed, in casual employment or self-employed
  • People who have not completed a Bachelor degree
  • People who rated their current living situation as good, fair or poor
  • People less able to get support from family and friends
  • People who lived in the most disadvantaged geographic areas

Self-employed people and small business owners

In 2020, small business owners reported financial stress as their biggest worry.

Fifty per cent said they were financially stressed and 15% were only making ends meet. Almost half – 47% – were mentally distressed. Those on fixed term (73%) and casual (77%) contracts were more vulnerable to adverse income shocks.


Women are significantly more likely than men to experience financial hardships and symptoms likely to indicate a mental health condition together.

During the COVID pandemic women faced further vulnerability. Women have borne the brunt of economic and psychological impacts from COVID: 

  • greater job losses and workforce participation drop out;
  • increased demands on time and energy from supporting school children with home learning and attending to family needs in lockdown;
  • higher levels of psychological distress; and
  • increased homelessness and housing insecurity through this period.

Young adults 

Younger adults found to be significantly more likely than those of older ages to experience financial hardship, to experience symptoms likely to indicate a mental health condition and to experience both together.


Factors contributing to mental and financial wellbeing 

Socio-economic factors

Socio-economic factors account for 54.5% of a person’s overall financial wellbeing. Health, unemployment, earning potential and life journey are the most significant socio-economic factors affecting financial wellbeing.

For example, newer mortgage holders (in the last 2 years) experienced a greater decline in financial wellbeing between April and September 2022.

Cumulative and compounding life events

Life events can directly impact financial and mental wellbeing simultaneously, including life transitions, relationship losses, family violence, work related and legal events. As the number of these challenging life events increase, so does the effect on financial and mental wellbeing.  

Community wide events

Relationships, social support and community connection can impact financial and mental wellbeing. People who feel they have no one to lean on are more likely to experience financial and mental health challenges. Withdrawal is a common response to financial hardship.


A variety of factors influence how people respond to money and mental health challenges, including stigma, shame and our social relationships. The research identified high rates of stigma of multiple types. These include: 

Financial stigma

Shame, a sense of failure and reluctance to speak or seek help about financial challenges due to concerns about what other people might think.

Social comparison

Pressure to keep up financially with others and a sense of isolation when this isn’t possible.

Mental health stigma

Reluctance to speak/act on mental health challenges due to fear of discrimination or shame about their condition.  

Common behaviours associated with stigma and shame include: 

  • Delays recognising or acknowledging a problem 
  • Delays seeking help 
  • Prolonging unhelpful behaviours 
  • Withholding information from others, including when speaking to professionals. 
  • Withdrawing from family, friends and work 
  • Avoidance, self-medication and unhelpful behaviours.

Key actions to take  

Accessible and appropriate supports have a major impact on a person’s recovery from money and mental health challenges. 

As communities

  • Reduce stigma around money and mental health
  • Encourage early help-seeking for both financial and mental health challenges
  • Make it easier for people to navigate support options.

For organisations and people working with others

  • Build mental health literacy
  • Help people recognise and respond to mental and financial wellbeing risk
  • Build skills, such as how to check-in on someone and refer people to appropriate services
  • Cross-referrals between services ad supports when early indicators are present.

As individuals (experiencing financial hardship or supporting someone who is)

  • Better understand the link between money and mental health, and the impact of stigma
  • Prioritise self-care (exercise, diet, sleep, connection with others)
  • Build skills and knowledge about mental wellbeing.