Which Mental Health Conditions Cause the Most Financial Recklessness?

Millions are affected on a daily basis by a plethora of mental health conditions that make even the most basic tasks challenging. From anxiety and depression to obsessive-compulsive disorder and addiction, hundreds of unique conditions may exist individually or in conjunction with one another. This can cause a variety of unique challenges that make it difficult to function in everyday life.

While it may not be the most commonly-considered problem, mental health conditions have a direct impact on financial behaviour. Namely, those who suffer from mental illness tend to struggle more as a whole with their finances than those who don’t. Because of this, it is vital that resources and strategies exist to assist those who face these difficulties.

With that being said, it’s important to know which specific mental health conditions are most likely to present financial challenges. In knowing about these struggles, individuals can take steps to safeguard their finances against them. As such, here is a list of the most common mental health conditions that cause financial recklessness.


1. Addiction

Above and beyond the rest, addiction is the most obvious cause of financial recklessness among those suffering from mental illness. The problem is often compounded by the fact that those suffering from addiction become addicted to substances because of underlying mental illness, yet exacerbate the symptoms via the addiction itself.

Many people think of substance abuse as the most obvious and detrimental form of addiction. While certainly the most common, other types of addictions pose equal – if not greater – complications with finances. Gambling is one good example of an addiction not involving substances that still threatens fiscal livelihoods.

A variety of underlying mental health conditions may lead to various forms of addiction. Multiple addictions present simultaneously can compound the effect on finances; additionally, addiction may affect not just the finances of those suffering but their friends and family members as well. This becomes one of the biggest causes of stress among both those suffering from addiction and those in the position of supporting them.

2. Chronic Depression

Everybody can be depressed from time to time, but chronic depression poses one of the biggest problems for those wishing to manage their finances. Living with depression on a full-time basis creates situations in which people look for temporary happiness and outlets to alleviate the suffering. As such, wasteful spending often features prominently in this endeavour.

If you know somebody who is dealing with depression, the first course of action is to encourage them to seek help. Through resources such as Mental Health & Money Advice, those facing depression can not only uncover the underlying causes of the depression but also rectify the bad financial and spending decisions that undermine their long-term potential for stability.

Some common examples of excessive spending motivated by depression include pricey trips to the shops, pricey cosmetic procedures, and chronic purchasing of small, inexpensive yet relatively useless items. The fleeting ‘high’ created in those with depression whenever they make a purchase is the underlying trigger for the behaviour.

3. Manic Depression

Fundamentally different from general depression in a variety of ways, bipolar disorder creates constant chaos in the lives of those who it impacts. Among that chaos, fiscal recklessness is a prime factor. Living with bipolar disorder can feel like a constant roller-coaster ride, with major financial mistakes manifesting during both the highs and lows.

Even those with a reasonable knowledge of proper spending and saving procedures may fall victim to reckless spending during a state of mania or depression. Somebody who may otherwise be saving for the long-term may suddenly decide to spend everything in one night during a manic episode.

When compounded with financial decisions that are often made during the depressive stages of the mental disorder, many bipolar sufferers find themselves in financial circumstances as dire as the worst of addicts. In some cases, a short-term solution during treatment of the condition may involve strict budgetary planning and a custodian who chaperones one’s money and makes payments on their behalf.

4. Dementia, Alzheimer’s and Other Memory-related Diseases

Last but not least, it should come as no surprise that many people who suffer from memory-affecting ailments will ultimately run into financial problems. This can manifest in multiple ways.

For instance, somebody who is living with dementia may not recall that he or she has already paid a bill or that they’ve loaned money to an individual. Caretakers may sometimes take advantage of these people, which isn’t a form of financial recklessness on the part of the victim – but nevertheless, it impacts their finances.

Spending decisions may be made by those with memory-related diseases that can quickly leave them penniless. These individuals need a special type of care that helps them manage their money effectively while preventing others from preying on them.

These four broader mental health conditions ultimately present the greatest number of risks to the financial situations of those affected. With guidance, proper planning and a bit of personal assistance, most of these issues can be avoided and a sound money management strategy can be devised. However, it is essential that proper care for the underlying mental health issues are addressed first and foremost.


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