Today I want to talk about depression and how it can affect your finances. For those new to Breaking the Piggy Bank, let me quickly catch you up. I began this website after having hit several financial mishaps that eventually led to me making the decision to file for bankruptcy. The goal is to make money issues less taboo, and to provide a platform for those of us learning to stand on our own financial ground.
What contributed heavily to my financial misadventures? Lack of self-control, a desire for instant gratification, poor money management skills, terrible priorities, an inability to say no to choices that would strain me financially, and (drumroll) my depression. Whether you have clinical depression or not, we all struggle with times when spending money makes you feel better. However, that sort of thinking is not conducive to long-term money goals.
It is one thing to buy yourself a greasy meal as comfort or the videogame that you think is going to help you feel better versus drowning your depression in $100 worth of shots… and boy have I been there! If you have found yourself in a similar situation before, then you should know that there are things you can do to control your depression from taking a toll on your financial goals.
Depression is a lifelong struggle. While it is not constant, there are times in life when it will creep back in and put a hold on a lot of your life including your finances. You may begin to question why working toward that long-term financial goal is worth it. During these times it may be best to remember how you first felt when you began to work on the money goal. Did you feel relief, a sense of accomplishment or pride? Those feelings were genuine and are only gone temporarily. Of course, the length of time that “temporarily” is can vary, but regardless if you persevere even during the bouts of depression or sad moments in life, you’ll come out far better financially.
So, what are specific actions we can take to protect our finances when depression creeps in again or when life is too tough and spending money seems like the easiest thing to do?
- Plan ahead: Set up a separate account, whether checking or savings, that you will not have regular access to spend money from. It doesn’t have to have a huge sum of money in it, but ideally during every paycheck or every other paycheck, you want to send some money that way. If you are working toward a specific long-term financial goal, then have this account be where you are setting that money aside. For example, if you like to go camping during the summer and want to have money set aside for that, send it to an external account rather than keeping it in your main account. Not having that money as easily accessible can help make sure that even during a depressive episode, money toward that goal is not affected. I like to use online banks because it makes transferring money back into my main account a hassle to do, even if it is just waiting around a few extra days. That extra step and delayed instant gratification goes a long way when you feel depressed. In my case, I usually end up thinking, “Why bother it won’t make me feel good right now.” My main bank account is with Simple, and my external account is with American Express (yes, they have savings accounts options and have no physical bank branch… so I can’t take money out as easily.)
- Allow yourself to spend some money: I’ve allowed myself to spend money on Ben and Jerry’s Chocolate Fudge Brownie ice cream when I feel like hiding from society. Find something small that you’re all right with spending money as a small pick-me-up. Try to avoid large purchases by writing out on paper why you think you want to make that large purchase. This extra step can help clarify in your brain why it seems necessary in the moment. Return to this thought the next day to see if you still feel the same way. Impulse purchases seem like a good idea in the moment when you first think about them, and depression can certainly make them seem alluring. Adding an extra step and returning to it, can help you stray away from money decisions you will later regret.
- Evaluate, Reflect & Re-plan: If you end up sabotaging your finances momentarily, it’s OK. Everything we do serves as a moment to review, reflect and then learn from. In doing so, you will be able to figure out a plan for a future instance where you may lean toward not caring about your money goals. Take me for example, I had to take a hard look at the mistakes I made in my past, many of these during years when my depression had taken a hold of my finances. The outcome has only been positive.
- Take a break from the finances: Look, it’s no surprise that focusing too much on your finances when you aren’t in the right mind and space for it can result in feelings of despair and/or anxiety. It can make everything that much more overwhelming. It’s OK to take a break from crunching numbers and figuring out how to pay for long-term goals. Sometimes, you will need that space. For instance, I recently became a little too obsessed over how to pay for braces while also going through a rough mental patch. The result? I became more overwhelmed than needed and felt like just giving up on all of my financial goals (not just saving for the braces). I felt a lot better once I took a break from my spreadsheet to focus on other things that would help me mentally. Do the same when you need to. Just be sure to not ignore it completely. Make time to go back to your spreadsheet/notebook/bank app when you are in a calm state.
These are just a few things that might help you avoid falling into the trap that I often slid right into. This trap is known as the “my depression made me buy it”. As always, stay strong. You are in charge of your behavior that leads to your financial wellbeing, and I believe in all of you.
What are some of your strategies for taking care of your finances even when things in life get emotionally rough? Comment below or shoot the Pig an anonymous message with your thoughts.