Financial Planning for People Coping with Depression: Helpful Tips
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Coping with depression can be very stressful. Trying to balance your emotional health while learning financial planning for people coping with depression can feel impossible. But we have to take time to invest in ourselves and take steps towards a better financial future. If you also have ADHD, you may find you have times of over-shopping when you are depressed. Preparing for those times can help make it easier to get through and not feel as much guilt afterward.
Finances is a huge concept so we are going to go through some basics that will prepare you to be set up for the far and near future.
Depression can often lead to financial stress and vice versa. When you are depressed, you’ll find that making simple decisions can be overwhelming. That could mean you forget important things you need to pay for or even having energy to make your money work for you.
One step you could take is getting a financial advisor or a therapist. These can be expensive, but effective, tools for financial planning when you are depressed. If you need help, please reach out to a friend or family member who you know you can trust.
This post is all about Financial Planning for People Coping with Depression
Create A Personalized Financial Plan
Your next step would be to create a personalized financial plan. First you will want to assess your current financial situation. This could mean seeing how “in the red” you are by seeing if you are spending more money than you make. If that is the case then you may need to find ways to cut back or to make extra money.
Set a realistic short-term and long-term financial goal. Some examples of short term goals would be: save $500, set up a Roth IRA, or pay off your credit card debt. There is a lot we could go into here, but I think that should be another post.
For your long-term goal, you could aim at a specific salary, how much money you want to retire on, or retire early. Depending on your goal, you can allocate time or money towards it in your budget.
Make sure you are prioritizing essential expenses and cutting back on things like eating out, concerts, and movies. If you are already doing that and you are in the red, I would look into things like EBT, food banks, and finding a side hustle. These things can be difficult and a side hustle is a use of time that you may not have. Look into ways to cut your expenses like your wifi, canceling subscriptions, and lowering your electricity bill. These are just a few examples, if you’d like another post on easy ways to cut expenses please leave a comment below.
Implementing Budgeting Strategies
To implement your goals, you will need to create a strategy. I know that a strict budget doesn’t work for me often. I keep a list of expenses on my phone as I think of them because everyone’s essentials can be a little different. Using this list I can create budgets for my variable expenses like gas and food. Giving myself a broader budget (let’s say $30 a week for groceries) gives me some leverage when I am shopping. If I am under budget one week, I try not to go over the next week unless there is a sale on which I can stock up on.
One strategy I think is essential for financial planning is automation. Automate any investments you’d like to do, saving, and bills. On Robinhood you could, say, invest $10 a week in VTI which is an ETF that contains shares of every public company. This will keep your investing simple while not worrying about it too much. (This is not financial advice, this is just what I do.)
Automate your bills so that they automatically come out. You can automate $100 a month to go into a high yield savings account so you’ll never even see it and it will grow a little.
Building an Emergency Fund
Having a financial safety net can help you have peace of mind if you’re going through a depressive episode. Knowing that you have a little money to fall back on will help you focus on taking care of yourself.
Use all the tips given to help save extra money to grow your emergency fund. A good starting goal is having $500 for emergencies then work up from there. Most advisors will tell you to save around 6-9 months of expenses in your emergency fund. Make sure this money isn’t tied up in the stock market and that it is working for you still by putting it in a high yield savings account.
Invest In Self-Care and Mental Health Resources
When you are struggling with depression, it is important to set funds aside for medication, therapy, and/or mental health insurance. Talk to your doctor and be open if your medicine or doctor’s visits are too expensive for you. Many doctors know ways to save you money that can help you find affordable mental health resources.
If you take medicine, look for manufacturer coupons and GoodRx for the best price. Sometimes switching which pharmacy you go to can help with your expenses.
You Did It!
Thank you for reading along. I am planning on doing more in-depth posts about finances so stay tuned for that. Financial planning can be overwhelming and that causes many of us to put it off and ignore it. But finding a way to stay on top of it in small ways can add to a more stable future.
