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Mental health and your finances

Mental health and your finances. Image: Thinkstock

Did you know you're more likely to suffer a mental illness that keeps you off work for an extended period of time than a physical illness?

One in six New Zealanders will experience serious depression at some time in their lives. Depression and other mental illnesses can have devastating consequences for your personal finances. I've seen it happen with a friend who nearly lost his home.

But it's not a "them" and "us" situation. We all have days of good mental health and days of not-so-good mental health, says Vero health and safety manager Glenys Barker. If those not-so-good days are frequent, it's easy to fall into all sorts of financial traps.

Nine useful facts about mental health issues and your finances:

  1. Around half of people who suffer from mental health issues refuse to seek help, or even acknowledge the problem.
  2. It's very easy if you're depressed to feel too bleak to do anything about your finances. Sadly this can lead to debt, bankruptcy and mortgagee sale. A classic sign to watch out for is failing to open envelopes because they may contain bills. The bailiffs won't be far behind if this is the case for you.
  3. Losing your job has all sorts of financial implications for people. Depressed people are prime candidates when it comes to redundancy time. And redundancy can lead to depression. Wages and salary are by far the most important source of money for most people in New Zealand. With less money in the budget after losing a job you have less money for self-care, which can contribute in a vicious cycle.
  4. Most income protection insurance policies will cover you for loss of income due to an incident of mental health. But beware, these policies are riddled with get-out clauses. If, for example, you've once told your doctor you feel stressed, the insurance company could well claim this was a "pre-existing condition" and turn down any mental health-related claim.
  5. Mental illness can occur to rich and poor, employed and unemployed, and it may not be obvious to the people around exactly what is wrong.
  6. Depression and anxiety affect people's ability to concentrate and pay attention, so they forget to fill in tax returns and other important financial requirements of modern life.
  7. Don't make decisions about financially important things when you're feeling down. There may be ways around not being able to pay your mortgage or other debts that will only occur to you when your brain is clear.
  8. People with mental illnesses may try to keep their spending and debt secret. It's a good idea for all couples to check the family bank statements regularly and have open financial discussions.
  9. Excessive spending may be a smokescreen for mental health issues. At one end of the scale people use compulsive shopping to cheer themselves up. At the other end impulsive and irrational spending is a common symptom of bipolar disorder. Other unhealthy coping behaviours include drinking, smoking, and overeating, which can lead to more stress.

If you are struggling mentally or know someone who is, try to encourage them to get help by seeing a doctor or call the Ministry of Health's depression helpline on 0800 111 757 to talk to a trained counsellor. Find out if you may be suffering from depress at

Your say: How does your mental state affect your finances?

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