Your financial health and mental health impact each other on a regular basis. Join Eric Rosenberg and Melanie Lockhart in an informative conversation about how financial stress can lead to mental health challenges and vice versa. Learn proven strategies for remembering your self-worth and making informed financial decisions that align with your goals. 

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Here’s the recap of today’s 15-minute episode: 

• How money and mental health are related 
• How financial stress can exacerbate mental health struggles
• The power of side hustles and alternate sources of income to help you reach your goals
• How to handle comparison and societal pressure to keep up with the latest trends
• Understanding your budget and communicating boundaries in day-to-day life 

Listen below or read the transcript that follows.

Eric Rosenberg:

All right everyone. I am so excited to be here with my good friend, Melanie Lockhart. She is one of the best experts in how money and mental health tie together. And I just want to start, Melanie, by welcoming you to the show and asking you how do you see money and mental health tie together?

Melanie Lockhart:

Thank you so much for having me here. And I’m so excited to talk about this topic because it’s something that I’m very passionate about, I’ve been talking about for pretty much almost a decade, and I think there’s such a close relationship between money and mental health, and especially debt and depression in particular.

So I think in general, money and mental health go together because money is a powerful tool. In our society, it represents power, it represents possibility, it represents choices. And if you don’t have a lot of money that can impact your survival, that can impact your mood, that can impact your physical wellness, everything, right? So for example, I have been low income and on food stamps and I was highly depressed, highly anxious. I felt like there was a pit in my stomach every day that I woke up because I was wondering how I was going to pay off my debt, how I was going to take care of my bills. And I think a lot of people are unfortunately living that way and they’re stressed out.

On the other hand, if you have mental health issues that are clinical but you can’t afford to get treated, that can add to the layer of mental health issues and stress because you can’t afford therapy, you can’t afford medication. So I think they’re kind of bidirectional, like money affects mental health, mental health affects money. We’ve seen this in spending styles. I know when I’m dealing with depression, suddenly I just don’t care how much I’m spending, and that’s not the right way to think about it. But mental health can cloud our judgment, our cognitive control.

Money is this very powerful thing and it affects our self-worth. Anyone that’s been unemployed, underemployed, making a low income, dealing with a big life change, you know how stressful money can be. And I think stress is something related to everyone, but sometimes that stress can go on longer than we expect and can lead to depression or anxiety or grief.

I’ve talked to a lot of people who might get a life insurance payout after one of their relatives died. It’s great to have that extra money, but there’s grief attached to it, right? So I think there’s so many directions we can go with this topic, but money and mental health are very closely aligned in my opinion. And then also mental health can affect the way you manage your money.

Eric Rosenberg:

I like that. I mean, I don’t like that it happens, but I like that you point out, it’s kind of like that vicious cycle. One can lead to the other, which can lead back to the other, especially with debt and depression. So if you were talking to somebody who is in the shoes you’ve been in, that they are feeling depressed about their financial situation, what tools would you offer them, either mental health tools or actions they could take to start breaking that cycle and taking a more positive approach to dealing with their money?

Melanie Lockhart:

Okay, so we’re going to go to a throwback of me basically a decade ago in 2013 when I was broke, I was on food stamps. I had just started my blog, Dear Debt, and I was very depressed about my money and debt situation. And so, at that time I had to convince myself that I was not my net worth. I think if you don’t have a lot of money, you have this low feeling of like, “I’m worthless” because in our society, your income, your net worth are very important as status symbols, right? So if you don’t have that, you can feel very low. So I think it’s important for people to realize they are worthy because they’re breathing. They’re not worthy because they have a job. They’re not worthy because they’re making six figures or not making six figures. They’re worthy because they’re alive. I think it’s very important to disassociate your self-worth from your net worth. That is the most important thing, because if you attach your self-worth, your net worth, it’s going to be a very challenging road on the mental health front.

I also think it’s important to realize that one little action can change your life and your perspective. I think it’s really important to realize that things can be temporary. I remember when I was in that situation, it felt like this was going to be forever. It felt like this was going to be my new reality forever. And then I did one little thing, I started blogging. I started side hustling. And I tried to take back some of that power and I looked at what is the root of my problem. The root of my problem at that time was I was not earning enough money. I was very frugal. I had few expenses, but my problem was I wasn’t making enough money. And so I was like, the only solution is to make more money.

And so I think it’s important for people to identify the root cause. Some people have a spending problem, some people have an income problem. You’re going to have two different solutions to those problems depending on where you’re at, right? So identifying what is the actual issue.

And then also, see if there’s low cost counseling options. I went to the local college. These were counselors in training that were one semester away from graduation. It was like $15 a session. I negotiated it down to $5 a session. There’s also Open Path Collective, which offers affordable counseling. There’s also financial therapists that you might be able to work with on a low cost basis potentially or see if they’re in training as well. I think there’s a lot of different areas that you can get support.

Also, something I haven’t tried out, but there is actually a Debtors Anonymous 12 step program. So for people that feel like they have a problem with constantly getting into debt in this a vicious cycle, definitely check that out because having support is so key to make you feeling not alone and to change the trajectory of your life.

Eric Rosenberg:

Yeah, I have to throw out, we don’t have free mental health resources from Payactiv. We do have someone to support you with free financial coaching, financial counseling sessions. If you throw back, we had an episode with Kofe, that’s K-O-F-E. They’re our partner who offers those free sessions. So if you feel stuck in dealing with your money and you don’t know what steps you should take, definitely take advantage of that. Payactiv members get it, absolutely no cost. That’s something I love about Payactiv.

And something you were saying, it really resonated with me of a family member who one time we were having a discussion about personal finance and we live in an expensive part of the world in Southern California. He was kind of joking about how my car was so old. And to me and to a lot of my friends in the personal finance community, that’s a badge of honor. I had a paid off car. I hadn’t had a loan payment in more than 10 years. It felt really good. As long as I did maintenance, the car worked fine. It was a Toyota. Actually, it’s still sitting at my mom’s house. We still have the car in the family.

But my brother-in-law at the time said he had to get a new truck every year. And I said, “Why would you think that?” And he worked in construction, he’s still in that industry, and he was doing okay, but such a huge percentage of his money was going to car payments. So I said, “Why do you think you need a new truck?” He said, “Well, it needs to look good and have all the best features.” But then what really ended up coming out was he said if you drive an old beat up truck to a construction site, all the other guys will make fun of you. And I started thinking, “Well, that’s not a really good reason to sign up for a $700 a month expense that you’re going to have leasing or buying a truck every few years.” Yeah, it’s good periodically to want to have a safe vehicle for you and your family, those kinds of features are important to me. But just what it looks like to someone else, I thought that was kind of baffling.

And that also made me think back to, I used to work as a bank manager, and I noticed this trend that most of the managers who had finance backgrounds drove less fancy and less expensive cars than a lot of the hourly employees. And I started chatting with another manager about that. I said, “Why do you think they’re driving these more expensive cars?” And there’s a lot of different reasons people might do that, whether it’s a cultural thing or comparing yourself to coworkers, Keeping up With the Joneses. But remember, the Joneses probably have $10,000 in credit card debt. So don’t worry about what someone else is doing. This isn’t middle school and high school where you have to be the most popular person. You have to think about what’s best for your financial health in the long run.

And for most people, that’s not necessarily buying a new car every two or three years. It might not be buying the fanciest jewelry. I mean, I’ll admit this was a $2 necklace I’m wearing and a $3 hat. Even though it has diamonds, they’re fake. They’re probably plastic.

So, a lot of people care a lot about appearances. And as you’re saying, a lot of people feel like their net worth is tied to their self-worth because that’s what America tells us, but it doesn’t have to be that way. If you think about what your priorities are, then you can start aligning your money with those priorities.

Melanie Lockhart:

Absolutely. And I think you’re bringing up a good point that for people that are new to their personal finance and financial wellness journey, you really have to interrogate some of the messages we receive in capitalism, in US culture, in consumption culture. And we have to kind of separate ourselves from that and say, “I don’t need to buy these things to impress other people. I don’t need to dress a certain way to impress other people. No one’s going to be managing my money. No one’s going to be there in retirement when I either have money or I don’t.” You are the one that’s going to be taking care of you. So who caress what other people think? And if people make fun of you, you can say, “Well, I’m saving money and this is what is my preference.”

I think at the end of the day, maybe it’ll feel weird at first, but it’ll get easier over time. And yeah, with the powers of social media, peer pressure, our peers, it’s really important that we focus on what’s the best for us and not necessarily just keeping up with everyone else.

Eric Rosenberg:

Yeah. And I think it’s so important to focus on priorities for you. I mentioned that a moment ago. But sometimes you might have a friend that invites you to a concert and you think, “Oh, well yeah, it’d be fun to go see Taylor Swift or whoever,” but those tickets are crazy expensive. And I have invited friends to concerts and they’ve said, “That doesn’t fit my budget this month.” And I didn’t judge them for it. That was fine. It just meant that they needed to put their money somewhere else. And by prioritizing, whether it’s concerts or something else, that allows you to treat yourself a little bit in the places that you do care about.

So a good example we like to pick on in personal finance is a daily coffee. You go to a coffee shop every day, 3, 4, $5, that adds up to a lot over a month. If you don’t really care about that coffee experience, then you could cut that and maybe there’s your concert tickets every few months, or maybe there’s another credit card payment to get out of debt sooner. Or maybe you do care about that coffee, so then you have to think, “What else could I cut so I can make sure I can afford that coffee?” Because whatever’s right for you doesn’t have to be what’s right for me or Melanie or anyone else, but you have to make an effort to afford the things that you care about most. And often that means cutting the things you don’t care about most or those subscriptions that you forgot about that you don’t use very often. All the streaming services just raise their rates.

So if you’re not using one of those, cut that, and maybe there’s your concert ticket or that pair of designer sunglasses after a few months, whatever your priority is. But if you’re spending mindlessly or just because someone else says so, that’s not a good reason to spend money, and that’s a terrible reason to be in debt.

Melanie Lockhart:

Yeah, absolutely. And I wanted to mention in my book, Dear Debt, I have a chapter on how to be a frugal friend without being rude. Because when I was paying off my debt, I had to say no to a lot of things. And so, you don’t want to be rude. And if you constantly say no to people, you’ll stop getting invited. So you can say, “Hey, I can’t make it to the concert, but hey, I’d love to have you over at my place for dinner next week,” or “I’d love to meet up for coffee.” And so, immediately retort with something that is within your budget so the person knows that you want to hang out with them, you want to see them, but you suggest something that is within your budget.

Eric Rosenberg:

Yeah, there’s so many low cost things that you can do no matter where you live. Even if it’s really hot, you can go on a walk in the mall. If you have great weather, you can go on a walk out of the mall. But remember, being in a mall doesn’t mean you have to spend money there, just to be a place to meet up. The last time I saw Melanie, we met up in a mall as a matter of fact.

Melanie Lockhart:

Randomly. It was amazing.

Eric Rosenberg:

Yeah, it was through the power of social media, but neither of us were there to spend money. We were actually both working. We had our laptops with us. So that’s why I went to the mall that day, because I wanted to make money. But if you’re thoughtful about how you spend your time and where you spend your time, that’s another way you can find savings.

So another thing I wanted to ask you, you mentioned when you were dealing with your biggest debt and depression issues, you realized you needed to make more, you needed to change your earnings. We’ve been talking a lot about expenses, but if you’re not making enough to cover the basic bills, no matter how much you budget, you’re probably not going to get to where you need to be. So do you have any advice for someone who’s looking to grow their income and grow what’s coming in the door every month?

Melanie Lockhart:

Yeah, absolutely. And to your point, I quickly realized within the first month or two that I hit the frugality limit. I was like, “I can’t cut back anymore, so I just have to make more money.” So I focused on a lot of different side hustles, and I approached it by having fun. What are the things that I like doing? What are the things that I’m good at? I’m a very personal person. I like event planning. So I focused on side hustles like brand ambassador work, event planning. I helped people plan their birthday parties. I helped people move. I was a pet sitter. So those were the main side hustles that I did while paying off debt. And then I discovered blogging. And through blogging, I was like, “Oh, I could also freelance write as a side hustle.” And then I got into writing.

And so I would focus on what are your skills, what are your abilities, what are your passions, what are the things you’re good at. And then also sometimes it’s just about, “What can I do now to get money?” And that might be drive Uber, do Postmates, go on Rover and become a dog walker. I have a friend who makes a lot of money as a side hustle doing dog walking. Sometimes it’s just like, “What can I do now?” And you just kind of have to say, “It doesn’t need to be glamorous. It doesn’t need to be special. It’s not going to be my career. It’s going to get me through this time to make more money.” And I always approached it as, “This is a new experience. I’m going to learn new things.” I have some hilarious side hustle fails that were embarrassing, but it got me through.

And so, I would just focus on what are you passionate about, what can you do today and what’s going to help you reach your goal. And then obviously if you have a full-time job, see if you can negotiate a raise, see if you can maybe transition into a different role that earns more. I’ve also heard people job hopping because they can earn more elsewhere than where they’re currently at. So there’s a lot of different ways that you can earn money, whether it’s side hustling, selling products, selling services, negotiating, or just going to a different job that pays more.

Eric Rosenberg:

Yeah, those are all great tips. I know I’m a weirdo. My hobby is making money, I feel like. So whatever thing that I want to do when I’m not working ends up becoming work. I find the things that I like to do, the things I’m good at, and find a way to turn that into a little side business. So that’s how I ended up doing a lot of what I do today just as you. So you never know where something will take you if you give it a try. I’ve had failed side hustles as well, just like Melanie. But if you try a few things and one of them sticks, that could be a great change to your money.

Most people also get most of their money from that primary job, their main income. So if you can get even a small raise there, that’s a huge win for your finances. Think about the value you contribute to your company, and don’t be bashful to tell your boss, “This is what I do. This is how I perform. I think I deserve this raise.” You can even do research online. There’s a handful of websites where you can find the average of what people do your job at your company earn, especially for bigger companies. So don’t be afraid to ask for what you’re worth because you provide a lot of value for your company, all those hours you spend there. You should be fairly compensated.

Melanie Lockhart:

Yes.

Eric Rosenberg:

So do you have any final words before we say goodbye to encourage people to get through a time if they may be struggling with that mental health and financial burden?

Melanie Lockhart:

Yeah, I would just say mental health, physical health, financial health are all interrelated. And so, if you take care of one section, it can help the other. And really focus on taking care of yourself. What are some free and frugal ways that you can take care of your mental health if you cannot afford therapy or medication? Maybe that just means taking some time for yourself. Maybe that means better boundaries, saying no. And what are the things that are actually stressing you out? You might be realizing that it’s this monthly payment or it’s this job, or it’s this thing. Once you identify what’s actually causing that stress, you can start to make changes.

Eric Rosenberg:

That’s great advice and great words to end on. But before we go, you’ve mentioned your book, Dear Debt, and that you’re a blogger. If anyone wants to connect with you and learn more, where should they go?

Melanie Lockhart:

You can go to my blog, Dear Debt, find my book, Dear Debt. And then also I have a whole podcast called The Mental Health and Wealth Show with 80 episodes or so that you can check out all the content about money and mental health.

Eric Rosenberg:

Awesome. Well, thank you so much. Thanks for spending the time with us and sharing your wealth of knowledge. We’ll talk to you later.

Melanie Lockhart:

Yeah. Thank you so much. Bye.

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