How Financial Advisors Can Help with Your Mental Health

A study found that individuals facing persistent financial difficulties are 5.5 times more prone to face mental health problems. Evidently, psychologists and psychiatrists are often the first people we turn to when facing mental health challenges. But did you know that a financial advisor can also play a crucial role in improving your mental well-being? In today’s world, a lot of stress stems from financial struggles - whether it is the weight of mounting debt or the fear of falling short of your goals. The right financial advice can help ease this burden by boosting your confidence and giving you a sense of control over your financial future. If you are looking to manage money and emotions, hiring a financial advisor could be a smart move.

Proper financial planning for mental peace can help you sort out your life and find mental peace. A financial advisor can guide you through this journey and help you create a plan that works for you. This article will explore several ways a financial advisor can support your mental health.

Below are several ways a financial advisor can support your mental health:

1. A financial advisor helps you create a definitive financial plan for better clarity

One of the most significant ways a financial advisor can positively impact your mental health is by giving you clarity. In most cases, financial stress comes from being uncertain about the future. Not knowing what lies ahead or where you are headed can bring in a lot of tension and anxiety. A financial advisor can step in to help you create a well-thought-out plan tailored to your exact needs and goals to reduce some of this stress. This process not only organizes your finances but also brings a sense of direction and control, which lowers the anxiety that comes with financial ambiguity.

The first thing a financial advisor does is understand your unique situation. They take into account factors such as your age, income, liabilities, and personal aspirations. For instance, if you have three children who all plan to attend college, your financial advisor will factor in the cost of their education and work on a strategy to make it manageable. On the other hand, if you are unmarried and focusing solely on building a solid foundation for yourself, the financial advisor will craft a plan designed specifically for your individual needs. This personalized planning makes a world of difference. When your goals move from vague ideas in your head to concrete steps, life feels more manageable. Seeing a clear plan laid out before you creates a sense of control. For example, instead of stressing about saving for retirement or paying off a loan, you will know exactly how much you need to set aside each month and how long it will take to achieve your objectives.

The moment you begin implementing a concrete plan, the uncertainty starts to fade away. Achieving milestones, no matter how small, gives you a sense of accomplishment. This reinforces your belief in what is possible and makes you more self-assured.

2. Depending on a professional financial advisor offers confidence

Finances, taxes, and investments are not subjects most people learn in school. These are skills you are often left to figure out on your own, which can lead to hesitation and uncertainty. Many people struggle with making confident financial decisions simply because they have not had the chance to build the necessary knowledge or expertise. Trial and error become the default approach, and mistakes like a poor investment or budgeting blunder can take a toll on your overall mental health. These blunders hinder your progress and erode your confidence, making you second-guess your future decisions out of fear of repeating your past errors.

However, a professional financial advisor can make you more confident. A recent study revealed that 34% of people felt more confident in their financial plans after gaining access to professional financial advice. This is not surprising. Financial advisors bring years of education, training, and hands-on experience to the table. Their expertise eliminates the need for guesswork. Instead of relying on trial and error, you can implement strategies that are grounded in knowledge and tailored to your unique situation. When you depend on a professional, you work with someone who understands the intricacies of finance. A financial advisor will take the time to analyze your specific circumstances, goals, and challenges before offering any recommendations. This gives you the assurance that your financial decisions are well thought out and rooted in logic and not guesswork or trends.

Confidence also comes from learning. Working with a financial advisor is not a passive experience. Over time, you will likely learn from them and be able to manage your money and emotions more effectively. Instead of shooting in the dark, you will likely approach your finances with clarity and strategy. Being certain that you are on the right path and using the right tools to achieve your goals will boost your confidence and optimism about the future.

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3. Working with a financial advisor helps you tackle financial hurdles

Financial hurdles like debt, poor credit score, overdependence on credit cards, etc., can also impact your mental score. A study by Money and Mental Health found that nearly one in five people with mental health challenges are also grappling with significant debt. Debt is a reality for many individuals, whether it is a student loan you are trying to pay off after graduation, a home loan you have taken on to achieve your dream of owning a house or mounting credit card debt that comes in every month.

The impact of debt goes beyond financial strain. Constant reminders of payments due, late fees, and the fear of falling deeper into the debt trap can create a cycle of financial anxiety and stress. The unending dependence on credit can make you feel trapped and helpless. These struggles do not just affect your financial life. They can also take a toll on your overall well-being. A financial advisor can help you break this cycle. Their expertise can help you address your debt hurdles systematically, starting with a clear,

actionable plan to tackle them. Financial advisors can also help improve your credit score. They can analyze your credit history and provide strategies to repair your score over time. They can use a range of strategies, like timely payments, budgeting, etc., to help you clear your dues. For example, they may recommend debt consolidation if you have too many loans. Additionally, if you are overspending on credit cards and your expenditure exceeds your earnings in most months, the advisor may recommend a strict budget and switching to a debit card for some months. These strategies can help bring things under control and also reshape your reactions to spending, helping you form healthy habits.

Another significant way they help is by educating you on the responsible use of debt. They can teach you how to leverage debt effectively. Financial advisors bring logic and reason into the picture, which helps you steer away from impulsive financial decisions and adopt healthier financial behaviors.

4. Financial advisors help you with healthcare planning for better peace of mind

Healthcare planning plays a vital role in both your physical and mental well-being. The first and most obvious reason is that it helps you manage your healthcare expenses, which is crucial for maintaining good health. The second reason is less visible but equally important - your mental health. Knowing that you are financially prepared for medical emergencies and future contingencies provides you with a sense of security. This not only supports your overall health but also offers the peace of mind that comes from having a financial safety net to fall back on. A financial advisor can be instrumental in creating a comprehensive healthcare plan. Many people think healthcare planning starts and ends with buying a health insurance policy, but that is just the beginning. True healthcare planning involves preparing for the unexpected, such as accidents and illnesses, as well as potential future expenses as you age, such as lifestyle illnesses, long-term care, etc. Financial advisors take a holistic approach. They can help you evaluate your current and future healthcare needs and recommend insurance plans tailored to your circumstances. For instance, they may suggest critical illness insurance to cover major health conditions or long-term care insurance to support you in old age. These types of policies provide more specialized coverage beyond standard health insurance, ensuring you are better prepared for life’s uncertainties.

Apart from using healthcare planning for mental peace, a financial advisor can also help you optimize your tax situation. With their help, you can explore and maximize the benefits of tax-advantaged accounts like Health Savings Accounts (HSAs). An HSA allows you to save pre-tax dollars for qualified medical expenses. The money within your account grows tax-free and can be withdrawn tax-free for eligible healthcare costs. So, you are not only planning for medical expenses but also reducing your overall tax burden, making it a win-win situation.

5. Working with a professional frees up time for other essential goals, enhancing your mental health

When you work with a professional financial advisor, you adopt a holistic approach to living life. With their expertise, you gain a clear structure for managing your finances, ensuring that every aspect of your

financial life, from income to expenses, is accounted for and optimized. A financial advisor can help you make the most of your income by creating a well-balanced financial plan. They ensure your earnings are allocated efficiently by dividing them into essentials like daily expenses, non-essentials like leisure activities, and crucial areas like savings and investments. They also streamline the money flowing out to help you prioritize debt payments, taxes, contributions to retirement accounts, and other financial obligations.

This meticulous planning ensures that your financial goals, such as buying a house, funding your retirement, or covering medical expenses, among others, are actively worked toward without constant stress or micromanagement on your part. A financial advisor focuses on these areas for you, which ultimately relieves you of the mental burden of tracking and managing every financial detail.

When your financial worries are handled by a trusted professional, it frees up mental space and time. This allows you to focus on other essential aspects of your life, such as spending quality time with loved ones, pursuing your hobbies, concentrating on your career, etc. You are more present and at peace. This presence and peace directly contribute to better mental and physical health, as constant financial concerns no longer weigh down your mind. Moreover, reduced stress can lead to healthier relationships. With your financial stress under control, you are more patient with your children, attentive towards your spouse, and emotionally available for your friends. Additionally, the mental clarity that comes from not having to worry about your finances can improve your focus and productivity professionally, which can help you excel in your career.

To conclude

Undeniably, money does affect you emotionally. The lines are very finely drawn together, and beyond the material satisfaction and validation, your finances can have a deeper impact on your life than you think. Fortunately, hiring a financial advisor can have an equally powerful and positive effect on your life. Professional financial advisors help you plan ahead, learn the right strategies, and implement practices that reduce stress and promote peace of mind. While they may focus on your finances, their contribution goes deeper. They provide structure, clarity, and support in times of financial uncertainty. So, you must hire one at the earliest if you are struggling with mental health issues stemming from financial strain.

Use the free advisor match tool to get matched with experienced financial advisors who can help create a plan that reduces your financial strain and supports your mental health. Answer a few simple questions and get matched with 2 to 3 vetted financial advisors based on your requirements.