How Your Personal Finances Affect Your Mood

If you’re anything like me (human), your moods fluctuate in ways that you can’t always control. I know that I get excited when I know a big paycheck is coming – I’ve even been caught singing a little too loud with a new check in my pocket on my walk home.

Other times, I feel pressure from an upcoming payment, and I find myself trudging harder through life than I need to. If your moods are affected by your finances like mine are, this article should help you understand what’s going on in your brain and control your cash flow with a renewed sense of ease.

Effects and Causes of Financial Stress

For most people, stress is a natural reaction to environmental stimuli like the people and things around you, the tasks you’re given, and the amount of time you’re given to do something.

Negative moods arising out of your personal finances tend to be related to high-stress situations on limited time-frames, while positive moods most likely arise from a feeling of catharsis – a release of tension where your finances are concerned, a new paycheck or a paid vacation.

Psychologists have been studying the effects of stress on the human mind for centuries, and they find that overly stressful events can cause a state of panic known as the “fight or flight” response, during which the brain releases hormones like adrenaline and cortisol.

According to Psychology Today, “A little bit of stress, known as ‘acute stress,’ can be exciting – it keeps us active and alert. But long-term, or ‘chronic stress,’ can have detrimental effects on health.”

Even in the short-term though, stress can be staggering, and it often carries negative impacts that outweigh that short burst of motivation.

If you’ve noticed yourself feeling jittery, stand-offish, panicky, forgetful, or physically ill when you’re worried about your finances, these may be direct negative effects of the chemical cortisol.

Cortisol can weaken immune system activity, increase the metabolism, decrease bone formation, and decrease the brain’s ability to retrieve memories in the short-term, and with extra adrenaline in your system, you may feel panicked and frustrated at the same time, causing you to lash out at others unnecessary.

In the long-term, these effects can lead to more serious conditions like osteoporosis, depression, and insomnia.

Catharsis vs. Euphoria – Fighting the Financial High

On the other hand, the positive financial feelings, referred to above as catharsis, might be closer to euphoria, depending on your situation.

Euphoria is associated with a burst of serotonin (and sometimes adrenaline) in your brain, a chemical that causes feelings of love and happiness in the short term, but can leave you seeking more material gains.

Spending Money

If you start to receive a steady cash flow, especially if you borrow money against your car, and you’re seeing more in your bank account than ever before, your mind might be inclined to celebrate by spending freely – an activity that can simply cause more stress in the long run.

For me, financial highs tend to feel more like catharsis, since I’m usually relieving the on-going tension of having bills to pay rather than feeding ecstatically from a constant stream of wealth.

Controlling Your Stressors for Financial Success

With limited psychology experience – I don’t have a degree in psychology, but I’ve taken some classes, read a little bit, and felt some stress in my life – I’ll go out on a limb and suggest that maybe the most stressful situations for people who struggle with finances are those that come from the feelings of being overwhelmed and out of control.

I feel most frustrated and panicked in my life when multiple people want something from me, and they want me to get it all done fast. Like so many others, I do the worst thing in those situations.

I stagnate. I do nothing.

Any financier can tell you that when you have payments that are due, or overdue, the worst thing to do is pretend like they’re not there.

But sometimes the shame of knowing you’re not living up to their expectations keeps you from picking up the phone or sending out an email, and instead, you might think, “Oh, well, I’ll just get it in when I can.”

It’s in these particular situations that landlords, energy providers, and lenders also panic and frustrate, and they might even approach you angrily, with voices just as stressful as yours.


Or worse, they’ll approach with over-calm – “This e-mail is to inform you that your payment is overdue.” Think about it – you spent all night worrying about your student loan bill, and all they did was send you a lousy automated e-mail and hit you with a $200 late fee.

Why do we bother stressing over payments when the people we owe have hundreds of other payments to collect? Why should we be concerned about a $200 late fee when we owe tens of thousands, sometimes more?

When high stress levels could deplete our bones, our social lives, our sanity? When a simple phone call could make everything forgiven?

Procrastinate on Purpose

One author, Rory Vaden, writes in his book Procrastinate on Purpose about the ability to produce more time from a life that we constantly call “busy.”

He claims that when we say we’re busy, what we mean is we don’t “own our time,” meaning we spend our time doing tasks that we could easily eliminate, automate, delegate, or procrastinate – when we could be concentrating on our goals. Psych blogger Margarita Tartakovsky writes about his book here.

From Vaden’s view, I’d like to suggest that this feeling of unowned time, time spent washing, commuting, or working for money we owe adds immensely to our stress levels when we have other goals to consider – my own freedom alone could be one.

Find Your Freedom

To create more freedom, Vaden suggests, we can create more time by targeting unnecessary tasks, delegating tasks to other people and accepting imperfection, or leaving them be so that we can return to them later with a fresher opinion.

I’m not using Vaden’s opinion to tell you to give up your job or forget about your finances. Rather, I believe that it’s okay to ask for help and to concentrate on yourself when financial stress leaves you stagnating.

Talk to your financier and check a calculator, ask for help from your family and friends, and, most of all, create time for yourself. Keep in mind that your personal account is a small cog in a much greater system, and if you’re feeling stressed-out, the world can wait.

This article was a blog contribution from Jane Meyers. She lives in Jefferson City, MO with her husband and their two cats.