As rent and grocery prices were rising, my university course load became heavier than ever before. I wondered if I would be able to work enough to keep up with bills and still be able to work towards my goal of higher education. I frantically searched for a job that would pay enough to cover my bills but be flexible enough to accommodate my scattered and demanding class schedule. This was a taxing experience that affected me in more than just my financial well-being, it affected my overall well-being causing a looming sense of stress that seemed to be ever present.
I have personally experienced what many emerging adults today are facing when it comes to balancing many different goals and necessities. Emerging adults are in an especially vulnerable position when it comes to finances and the influence it has on their mental health. In an effort to better understand how the two interact, Dr. LeBaron-Black and colleagues conducted a study[1] that examined how financial socialization (parent-child financial discussions, parent financial modeling, or experiential learning of finances), internal locus of control (self-determination versus belief in fate), and mental health (anxiety and depression) interact and impact emerging adults.
In Dr. LeBaron-Black’s study it was found that financial socialization while they were young kids helped the participants to have a more internal locus of control now, or in other words, they felt a greater sense of control in their lives. Internal locus of control was linked with an increase in life satisfaction1 and a decrease in anxiety and depression related symptoms.1 In this web of associations, Dr. LeBaron-Black suggests that financial socialization impacts individuals’ internal locus of control and life satisfaction. Those two pieces are then intertwined with symptoms of anxiety and depression. This means that the better financial socialization individuals receive while growing up, the better their mental health outcomes may be as emerging adults.1
This has some interesting implications for emerging adults. Related to what I experienced in the example above (the weight of worry due to my conflicting demands of school and making ends meet), other studies have found that students who experience financial difficulties were twice as likely to fail an exam when compared to students who didn’t experience financial difficulties.[2] Additionally, research has also found that people with mental illnesses are less likely to have money in their savings account.[3] This illustrates that financial uncertainty can affect our mental health, and mental health can impact our financial well-being. So how can we interrupt this cycle of finances and mental health that seem to be pushing each other down? By including financial education and planning into our self-care routines.
The Global Self Care Federation defines self-care as: “The practice of individuals looking after their own health using the knowledge and information available to them.”[4] Considering the results of Dr. LeBaron-Black’s study, improving financial education is certainly a way to look after your health. It may be time to add financial education and planning into your daily self-care routine!
Takeaways
1) Make time for your finances.
Be intentional about setting aside time each week or month to review your current financial situation and to make realistic financial goals. Just as we set aside time to go to the gym, meal prep, or do any other kind of self-care, it’s important to make time for your finances to ensure that it does not get forgotten in a busy life.
2) Create a budget that works for you.
Start with your net income and then figure out where the money needs to go, where you want it to go, and what you have left over to have fun! For 6 steps to create a budget click here. An important part of budgeting is tracking where your money is going, just like wearing a watch to track your workout. Tracking spending and having a budget help you to feel more in control of your finances. Rocket Money has glowing reviews when it comes to an app that helps you to effortlessly track spending.
3) Give it time.
Similar to other aspects of self-care, it’s going to take some time before you begin seeing big results. Going to the gym once or doing a face mask may make a difference in how you feel in the moment, but doing those things intentionally over a long period of time will make the biggest difference in overall well-being. It’s the same when it comes to improving your financial habits. Give yourself time and space to learn how to do this in a way that works for you, and don’t be surprised if it takes time to begin to see the difference.
References:
[1] LeBaron-Black, A. B., Li, X., Okamoto, R. M., Saxey, M. T., & Driggs, T. M. (2022). Finances and Fate: Parent Financial Socialization, Locus of Control, and Mental Health in Emerging Adulthood. Emerging Adulthood, 10(6), 1484–1496. https://doi.org/10.1177/21676968221110541
[2] Bøe, T., Hysing, M., Lønning, K. J., & Sivertsen, B. (2021). Financial difficulties and student health: Results from a national cross-sectional survey of Norwegian college and university students. Mental Health & Prevention, 21, 200196. https://doi.org/10.1016/j.mhp.2020.200196
[3] Cook, J. A., & Mueser, K. T. (2013). Economic security: An essential component of recovery. Psychiatric Rehabilitation Journal, 36(1), 1–3. https://doi.org/10.1037/h0094739
[4] Global Self-Care Federation. (2019). What is self-care? Global Self-Care Federation. https://www.selfcarefederation.org/what-is-self-care