Mental Health and Wealth Management Go Hand In Hand

October 10 is World Mental Health Day. This is an opportunity to take stock of the impact our mental health and financial health have on each other. The statistics on mental health of Indians are dire. The 2019 World Happiness Report says that India ranks 140 out of 156 nations in terms of happiness.

As per NIMHANS, Indians between the ages 18 and 29 have the highest suicide rates. NIMHANS, based on its survey, had also reported that 6-7 crore Indians may have experienced suicidal thoughts. Various, smaller sections of the populace are understood to be suffering from depression and various major or minor psychiatric disorders. It's clear that many Indians are an unhappy, stressed-out lot. How can money not exacerbate those conditions?

WATCH YOUR DEBT

“People with problem debt are 2.5 times more likely to experience mental health problems, and are three times more likely to consider suicide,” says a UK-based charity named Money and Mental Health. The charity adds that such people pay significantly higher for essential utilities such as energy and banking and are twice as likely to be living in poverty. Therefore, having problematic debt can have a direct, negative impact on your mental health. If you are in such a situation, you must seek financial counselling to come out of it. It is therefore necessary to borrow responsibly, and to always have a full repayment plan to avoid defaults.

DEBT HABITS COULD BE HEREDITARY

A group of economics professors at the University of Copenhagen analysed 30 million personal loans held by five million people aged between 18 and 45 between 2004 and 2011.

They found that if a person had defaulted on a loan, the chances of their child also defaulting on their own loan were four times higher than the children of those persons who had not defaulted. The study revealed that the attitude towards risk as well as financial behaviour can be transmitted across generations. The learning: understand how your parents have managed risks and debt and evaluate your own attitude towards them. This will also help you manage your debt better - and, by extension, help you enjoy better mental health.

DO YOU HAVE ONIOMANIA?

Watch how you spend. Oniomania is another name for Compulsive Buying Disorder (CBD), a personality disorder, which is often a psychiatric comorbidity because it can coexist with other disorders related to mood, food habits, or substance abuse. The World Psychiatry journal says CBD “is characterised by excessive shopping cognitions and buying behaviour that leads to distress or impairment” and those diagnosed “report a preoccupation with shopping, pre-purchase tension or anxiety, and a sense of relief following the purchase”.

This is followed by feelings of guilt and severe financial consequences which can deviate you from the path of your primary financial goals such as saving for retirement or paying your EMIs.  

GUARD AGAINST INCOME & WEALTH SHOCKS

Economic shocks contribute to mental health problems. They can impair your healthy life expectancy, social support, and personal freedoms. In a slowing economy, Indians in recent years have suffered economic and wealth shocks, which may have affected the mental health of millions. One must guard against income and wealth shocks by ensuring adequate savings and investments for various circumstances. Speak with a financial advisor, understand your financial priorities, and chart out a plan that helps you meet any crisis head on and not slip into despair.

WATCH YOUR RISK TAKING HABITS

People prone to impulsive behaviour will experience financial difficulties. Impulsive beha-viour is linked to various personality disorders. The inability to control your emotions and impulses while dealing with risky decisions will spill over into your financial life with potentially disastrous ramifications. One must take the time to understand various risks associated with each financial decision. How we respond to those risks reveals a lot about our personalities. For example, irrational optimism about the stock market or making risky investments without due resear-ch are akin to gambling and are signs of poor impulse control. So, watch how you invest, and if there's a problem, seek help.  

WHAT ARE YOUR ROADBLOCKS?

In the 2019 Aspiration Index study, Indians identified roadblocks to their life goals. Three of the biggest roadblocks were identified as high intensity job and work pressure, constrains due to family responsibilities, and high costs of living. It's also important to note what Indians consider their biggest life goals: owning a house and educating their children. These goals often require significant amounts of borrowing, which can lead to stress. Hence planning is critical to achieving those goals as well as avoiding undue stress.

BE INSURED

In India, financial and mental stress can come abundantly in the absence of insurance. Typic-ally, the stress is caused by the difficulties brought about by the breadwinner’s premature death and not having protection against diseases and thus losing your savings during a hospitalisation. To protect your family from the stress caused by these unforeseen events, ensure you have term insurance to replace your income in your death, and have health insurance coverage for all members of your family. This will keep your savings and investments safe and your family stress-free.  If at any point you find your mental or financial health deteriorating, seek help. For mental difficulties, there are several helplines and counsellors to help you. For financial advice, consult a wealth advisor for a course correction.

(The writer is CEO, BankBazaar.com)