Boosting Mental Wellbeing: How Financial Stability Impacts Overall Happiness

Blog | June 22nd, 2023

People always say money can’t buy happiness, but that may not be true. Money may not buy happiness, but it can certainly buy comfort and security, which are keys to happiness.

About 92% of Americans say they are happier when they’re doing well financially, and many other studies support the idea that wealth and happiness correlate.

Keep reading to learn how financial security may be crucial to your physical and mental health.

How Financial Instability Impacts Your Health

Financial instability is stressful, but many people don’t realize how detrimental it can be to your mental and physical health. Below are the top health problems that can arise from financial insecurity. These are the only health problems that financial stress can cause, but they’re the most common and harmful.

Increased Stress

The number one impact financial instability has on your health is stress. Stress weighs heavily on your mental health, making it hard to focus on pleasurable things and take breaks from worrying about money and the future.

However, if you suffer from enough stress, your body will begin to show physical signs. You may age quicker, meaning you have more wrinkles, feel more tired, and your body is overall weaker.

The sections below mention other physical and mental problems that arise from financial instability, but stress is typically the root of all these problems.

Loss of Sleep

Many financially unstable people have trouble sleeping at night because they think about their debts, bills, and the future of their finances. It’s not unusual for financial stress to keep people up at night, leading to insomnia. Your body needs sleep to care for itself, so a lack of sleep will lower your health and overall quality of life.

Anxiety Disorders

Constant stress can increase self-focus and overthinking, leading to anxiety disorders like generalized anxiety. Anxiety often involves fear of the future and the unknown, which amplifies when someone is financially unstable and worrying about how to pay their bills or where to get their next meal.

Stress is defined as being temporary, while anxiety is more persistent. But chronic stress from financial woes can become so constant that the person develops persistent anxiety even after they find financial stability.

Headaches and Migraines

Have you ever heard of a stress headache? Many people who incessantly worry about their financial situation suffer from chronic headaches and migraines.

People often do not realize the connection between their headaches and financial stress, but constant stress and anxiety can lead to headaches and migraines. The stress triggers fight-or-flight chemicals, which puts pressure on blood vessels, leading to headaches.

Weakened Immunity

A lack of financial stability and stress can lead to a weakened immune system, meaning you’re more likely to get sick, and it will take your body longer to recover from a common cold or flu.

This physical manifestation of financial stress is extra awful because sick people can’t work, causing more financial instability, and medical expenses can be immense, worsening the financial instability in some cases.

Digestive Issues

Some people may get a tummy ache when they feel nervous or stressed. Constant financial stress can lead to chronic digestive problems, resulting in constipation, diarrhea, cramps, and other problems. Enough stress and anxiety can even alter your gut bacteria, causing IBS.

High Blood Pressure

Intense stress or anxiety can lead to temporary spikes in blood pressure. However, people who feel stressed and anxious may develop hypertension, meaning chronically high blood pressure. Hypertension can lead to heart attack, stroke, aneurysm, heart failure, kidney problems, eye problems, metabolic syndrome, poor memory, weakened cognitive functions, and dementia.

Muscle Tensions

As mentioned, stress can trigger the fight-or-flight chemicals in your brain. These chemicals often make people tense up in preparation to either fight or run.

This state of guardedness is a natural reaction to stressful or scary situations, but if you’re always in a state of stress due to financial instability, your muscles are constantly tense. This constant tension can lead to bodily aches, pains, stiffness, and other muscle problems.


Financial stress can lead to depression both emotionally and chemically. It’s not uncommon for someone who struggles with food and shelter security to feel depressed because they’re always uncomfortable or hungry.

Financially unstable people may also develop depression simply because they are overwhelmed by bills and debts and feel defeated or hopeless. However, there is evidence that the area of the brain stimulated by stress can become so exhausted and damaged from chronic stress that neurons lose plasticity, which can cause depression.

Advice for Managing Your Financial Stability

If you’re struggling with financial instability, we have a few tips for improving your financial situation and gaining security. Even just taking action to improve financial stability can help alleviate stress and prevent, reduce, or eliminate the stress-related health problems discussed above.

Invest in Yourself

One of the best ways to work toward financial stability is to invest in yourself, meaning you further your education, take courses or enhance your skills. Also, invest in your mental and physical health. Things like therapy and eating well make it easier to manage your stress and finances.

Budget Consciously

If you’re not already budgeting, you need to. Even if you spend conscientiously and try to be frugal, you still need a clear understanding of your financial situation. We know that looking at your financial status can be stressful, but it’s necessary if you want to improve your situation. Look at your finances and make an informed savings and spending budget.

Be Frugal

Being frugal means only spending when necessary and trying to pinch every penny. Frugality is always beneficial when trying to preserve your money and improve your finances, so do your best to reign in your spending and assess what’s truly necessary. Living outside your means is one of the most common financial mistakes.

Pay Off Debts

Our last tip is to prioritize paying off your debts. Even if you’re still living paycheck to paycheck, we recommend contributing at least a little money to lower your debts. Start with the largest debt and pay off each debt one by one. It’s important to get in the habit of paying off your debts.

Bottom Line

The studies mentioned in this article do not state that more money means more happiness. The research implies that a certain level of financial comfort, around $75k per year, increases someone’s overall quality of life.

So, while money may not directly buy happiness, a lack of wealth certainly increases stress, anxiety, and possibly health problems.