Bad money habits can lead to depression

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During the Coronavirus pandemic, most families lost their incomes due to retrenchment. It is true that that money cannot buy you happiness but worrying about not having it can deprive you of your joy. Bad money habits can lead to depression.

Lack of money does not necessarily cause depression but bad money habits do. Remember that you can be wealthy without having money in your bank account. Lack of money can only make you poor if it is stopping you from achieving your goals. Other people do not need money to meet their goals and we cannot say these people are poor.

However, many people depend on their salaries to earn a living. Losing this income means they cannot be able to take care of their families’ needs. This directly leads to depression especially if there is no direct alternative income source.

What causes depression?

In this section we will discuss some of the root causes of money related depression. These includes:

• debt
• bills

Debt

During a crisis like Covid19 pandemic, debt is a big culprit not only to people but to companies also. If a person who is in debt loses his/her income, then he/she may struggle to meet the debt payments.

Fortunately for others, they can claim from credit life insurance after retrenchment but majority of people are not even aware of this insurance cover. As a result, many will opt for debt payment holidays – solving a problem with another big one.

What mainly cause depression is that your debt level is bigger than your income. This is a bad money habit that can lead to depression – debt should never be bigger than your potential to generate income.

Bills

Everyone has bills but if all your income is going towards paying bills then you need to do something about it. Bills include rent payments, service charges (Electricity, Water, Wifi etc) , transport charges and others.

The size of the bills varies depending on a person’s lifestyle and the community the person is living in. Some people pay more and unnecessary bills only to preserve a false status – bad money habits that can lead to depression.

In the absence of an income, you may not be able to pay for these bills. This means you are deprived of your basic needs. This can lead to a state of feeling hopelessness.

What are the remedies?

Who can predict about the future? Nobody. Only God knows the future. The best we can do is just speculating and predicting. No one could have predicted that a disease was going to take away people’s jobs and force other companies into bankruptcy. Nevertheless, the pain of losing income could have been reduced.

Bad money habits can be solved. The following are great remedies that can be used to dodge the money related depression bullet:

• Avoid taking unnecessary debt. If possible, pay debt fast.
• Abstain from piling up unnecessary bills. Monitor your lifestyle before it becomes a burden.
• Have an Emergency Fund Savings that can sustain you in case of an unpredictable event.
• Never do something only to impress people who probably do not care.
• You lose nothing by being patient. This can help you to accumulate less debt.
• Analyse your future cash flow movements before you make any financial deal today.
• Allow your money to work for you through investing so that you will not rely on your job.
• Take responsibilities for your financial mistakes.

Important articles:

• Invest with purpose – making the first steps
• How build a habit of saving and investing
• Getting out of debt

Summary points

In conclusion, the lack of money does not cause depression but bad habits with money does. Regretting about a poor financial decision is a massive contributor of depression. It is better to solve bad money habits before you start looking for a better paying job or a side hustle.