Money can’t buy happiness, but experts say it sure does help

Extra cash can make all the difference

They say money doesn't buy happiness, but research shows tightening purse strings can have a detrimental impact on mental health and overall happiness. Here's what experts say.

That age-old saying ‘money doesn’t buy happiness’ is often presented as one of the most important outlooks in life. 

It’s used as a way to shift focus from material objects or possessions we can buy, to appreciate other aspects of our lives that can't be bought – because it’s our relationships, moments, experiences, and memories that are the source of true happiness. 

In theory, this is accurate – in reality, if the cost-of-living crisis has taught me anything, it’s that money directly impacts mental health, including our happiness, and research agrees.

The 2023 Report to the Nation, an independent annual benchmark survey produced for Mental Health Australia, has found that more than one in two Australians say the rising cost of living is having a major impact on their mental health. 

While particular groups were more affected than others, it was those aged 18-39, who were significantly more likely to report being impacted by the current cost of housing and increased cost of living, the report found.

Looking at this stat, while it’s clear that I am not alone, I am still one of those impacted and it’s undeniably hard. 

More than half of Australians say the rising cost of living is having a major impact on their mental health. Image: Getty

From mortgage repayments to the significant increase in goods and services prices, groceries, and utilities – these rising costs cause me stress and anxiety, but also other members of my household.

“It’s a chronically stressful experience to worry about whether you’re going to have the funds to cover your financial commitments or handle an out-of-the-blue expense,” says Dr Luke Martin, Clinical Psychologist and clinical spokesperson from Beyond Blue.

“It’s very exhausting to be constantly tense and on edge about it.” 

It’s not just being able to afford the necessities though, but the cost associated with doing activities you enjoy like seeing a movie at the cinema with a friend or travelling because regardless of that saying, sometimes money does allow us to participate in experiences we couldn’t do without it, experiences which can be a great source of happiness.

People experiencing financial challenges are twice as likely to experience a mental health condition like depression or anxiety. Image: Getty

Martin agrees, telling Body+Soul “Not having the financial buffer to get out and enjoy life can lead to feelings of loneliness which has further impacts on your mental health.” 

So much so, that people experiencing financial challenges are twice as likely to experience a mental health condition like depression or anxiety, says Dr Martin.

With Beyond Blue data revealing that of the 83 per cent who reported that the rising cost of living was negatively impacting their mental health, one in five respondents reported that the impact is “extreme.”

“What we see is that money problems and mental health issues often spiral down together. Each influences the other – so financial concerns cause stress and anxiety which over time has a real impact on your mental health, and when your mental health is struggling it’s harder to get into the headspace to get on top of your finances, which then puts you in a worse financial situation which then further affects your mental health. It can be a real downward spiral,” Dr Martin says.

Those with existing mental health conditions are more susceptible. Image: Getty Images

Not only can the cost-of-living crisis contribute to mental illness, but those with existing mental health conditions are also more susceptible to its impact, with one in five saying that cost is a barrier to accessing mental health support.

I am one of these. Diagnosed with depression years ago, regular phycologist appointments have been a critical part of my mental health care plan for years – because as the other nine in 10 Australians who use these services say, this support has improved my mental health.

Unfortunately, I have dialled these appointments back over the past year, with the cost of visiting the appointments, at times, causing more stress than is relieved by attending them.

Thankfully, for me, I have managed to safely navigate this situation by putting in alternative processes but for others, especially those who are experiencing more severe symptoms or other conditions, this is not always possible.

Stigma around money struggles can also prove a barrier to seeking help. Image: iStock

While cost can be an obstacle, the stigma around money struggles can also prove a barrier to seeking help, says Dr Martin. 

“People can feel a lot of shame when they’re struggling financially which can stop them reaching out for support. It’s important to be kind to yourself because so many people are in the same boat at the moment. Your financial situation is influenced by so many factors out of your control.”

If you are finding that the cost-of-living crisis is impacting your mental health and well-being, Dr Martin suggests the following:

You can take control by reaching out to some of the available supports. Financial counsellors are available through the National Debt Helpline on 1800 007 007.  You can contact Beyond Blue for mental health support on 1300 22 4636.

It’s easy to go into an avoidance mode with our money. Image: Pexels

It’s easy to go into an avoidance mode with our money, so it can help to set aside a regular time to do some planning. ASIC’s Money Smart website is full of tools to help you do this. 

If you can’t make your repayments, you can contact your bank or utility provider and work out a plan to manage your payments. You have financial hardship rights and they’re more willing to work with you than people often realise. 

Most importantly, don’t delay taking action. The sooner you take positive steps to regain control, the sooner you’ll be back on track.

Originally published as Money can’t buy happiness, but experts say it sure does help