Money and mental health: Is burnout affecting your finances?

Workplace burnout was already a serious issue for many Americans before the pandemic. In 2024, the problem is even more widespread and has a major impact on our mental and physical well-being. Because money issues and mental well-being are closely correlated, burnout can also threaten your financial stability.

We explore how our mental health and finances interact, explain how to recognize the warning signs of burnout, and share practical tips and strategies to improve your mental, physical, and financial health.

What is burnout?

The American Psychological Association (APA) defines burnout as “physical, emotional, or mental exhaustion” caused by stress and tension, especially from extreme and prolonged physical or mental exertion or an excessive workload.

According to a survey, about 65% of employees said they suffered from burnout in 2023 and 72% said it's impacting their performance at work.^[1] Nearly half (48%) of 18-to-29-year-olds said they feel drained compared with 40% of their peers aged 30 and up, while women (46%) reported higher levels of burnout than men (37%).^[2] But even outside the workplace, the post-pandemic world continues to present a host of mental health challenges.

Economic uncertainty. Ripple effects from the job losses, deaths, and financial upheavals of the pandemic continue. Consumers face ongoing inflation-related concerns, a rollercoaster stock market, rumors of recession, an uncertain climate future, and worry over the impact AI could have on our society and work. Meanwhile, pandemic-era financial supports such as stimulus payments and eviction protections have largely expired. Some 83% of U.S. adults report feeling stressed about inflation, according to a poll conducted for the APA in late 2022; 69% say the economy in general is a major source of stress.

Socio-political issues. Large-scale problems such as war, gun violence, political divisiveness, racial and gender injustice, and fears around artificial intelligence and climate change all impact our mental health. Repeated exposure to negative news cycles can make us feel powerless and hopeless, while a constant deluge of information causes mental fatigue and difficulty focusing.

The primary symptoms of both personal and professional burnout are “decreased motivation, lowered performance, and negative attitudes toward oneself and others,” according to the APA. Such mental health struggles can cause physical fatigue, difficulty making decisions or concentrating, memory problems, and a general lack of motivation. More than one-quarter of U.S. adults the APA surveyed say that most days, they are so stressed they can’t function.

How mental burnout can result in financial burnout

Money and mental health are closely connected. If seeing your hefty credit card balance makes you anxious, you might ignore the bill instead of paying it. That compounds your financial problems—and your stress.

Here are warning signs burnout may be affecting your finances:

Emotional spending

Do you use retail therapy to cope with your feelings? Shopping sprees may provide temporary relief or distraction, but ultimately mean more stress when the bill arrives.

Convenience spending

If work keeps you too busy to cook or shop, you might get takeout every night or pay for grocery delivery.

Poor work performance

Burnout often lowers your motivation and productivity. Failing to meet your work obligations could cost you a promotion, a raise, or even your job.

Neglecting financial responsibilities

Failing to review your retirement statements might cost you opportunities to improve your investment returns. Procrastinating on paying taxes could result in hefty penalties.

Increased dependence on credit

If stress is straining your finances, you may find yourself relying more heavily on loans, borrowing from family or friends, or using high-interest credit cards for day-to-day expenses.

Late or missed payments

Late payments can mean costly late fees and ballooning credit card balances. In addition, late payments that appear on your credit report can significantly hurt your credit score, making it harder to get credit in the future.

Relationship strain

Frequent arguments with your partner or family about money matters may signal financial stress is spilling over into your relationships.

Not planning for the future

When you're mentally exhausted, it may be difficult to focus on long-term financial plans and goals. Burnout can divert your attention away from important financial goals such as building a budget or emergency fund or saving for retirement or a home.

12 strategies to help improve your mental health and avoid financial burnout

The combination of financial difficulty and mental health problems can quickly become a vicious circle. A study from Hartford found that denial, anger, stress, depression, and anxiety all rose dramatically among workers facing financial problems.^[3]

Fortunately, you can combat burnout—and improve both your mental and financial health—by taking the following actions.

Mental Health Strategies

1. Practice self-care.

Healthy habits such as getting enough sleep, eating a balanced diet, and exercising can improve your mood and prepare you to face financial challenges. Find relaxing activities, like doing yoga or spending time in nature.

2. Start meditating.

Mindfulness meditation is proven to reduce stress and fight anxiety and depression, according to the APA. Join a meditation group, look for mindfulness resources online, or use free mindfulness apps to guide you.

3. Revisit your priorities; set boundaries.

Adjust your work-life balance by re-evaluating your priorities and eliminating less important activities or commitments. If you can’t stop doing something, set boundaries. For example, ask your boss about taking some responsibilities off your plate, or ask your partner for more help with childcare or housework.

4. Ask for help.

Talking to a friend may be all you need to feel better. If not, consult your primary care doctor and research the options your health insurance offers for mental health care. If you don’t have insurance, a Federally Qualified Health Center can provide services based on your ability to pay. Mental health apps can match you with licensed therapists you can access as needed for a monthly fee (check out the reviews first).^[4]

5. Be a friend to yourself.

Negative self-talk heightens anxiety, depression, and stress. Practice positive, supportive self-talk—the way you’d speak to a friend with your problems. Viewing your worries as you would a friend’s can help you be more objective and maintain a healthy perspective.

Financial health strategies

6. Assess your income and expenses.

Write down all sources of income and regular expenses. Divide your expenses into essentials, such as rent, cellphone and loan payments, and extras, such as eating out or streaming subscriptions.

7. Create a budget.

If building a detailed budget feels too complicated, start with a simple approach to budgeting. You can use a budgeting app or pen and paper—whichever works for you. Budgeting provides a sense of control over your finances and a better picture of your financial obligations. For example, if your expenses exceed your income, you’ll either need to cut back or bring in more money.

8. Prioritize debt repayment.

Debt is a top cause of financial stress, according to investment firm T.RowePrice. Develop a plan to pay down your debts systematically. Debt consolidation options, such as using a personal loan to pay off multiple high-interest credit cards, can make repaying your debt more manageable.

9. Start an emergency fund.

An emergency fund provides a safety net against unexpected expenses. Ideally, save enough to cover three to six months’ worth of essential living expenses should you lose or quit your job. You can start with a smaller goal, such as $500, and put aside a little each month.

10. Save for the future.

Contribute to any retirement plan your job offers. If your employer makes matching contributions, put in at least enough money to get the maximum match. You can also open an individual retirement account (IRA) on your own.

11. Automate your finances.

Put your financial goals on autopilot by scheduling automatic contributions to your retirement plans and automatic transfers to your savings account each month. You can also set up automatic payments for bills to eliminate worries about missed payments and late fees.

12. Reach out for help.

Take advantage of your workplace's programs to help with budgeting, emergency savings, or financial education. The more you know about managing your money, the less intimidating it will feel. If you’re struggling with debt, connect with a non-profit, licensed credit counselor who can help you make a budget and get out of debt.

The bottom line

Burnout can wreak havoc on your mental health and finances, but recognizing the warning signs of burnout and taking action can gradually bring your life back into balance. As you work to improve your money and mental health habits, be patient with yourself and focus on what you can control, not what you can’t.

By setting realistic goals, taking small steps, and making consistent efforts, you can find your way to a happier, healthier, and financially stable life.

1. HR Dive. "65% of employees said they suffered from burnout in 2023 and 72% said it's impacting their performance at work."

2. Future Forum. "46% percent of women say they are burned out compared with 37% of men."

3. The Hartford. "A study from Hartford found that denial, anger, stress, depression, and anxiety all rose dramatically among workers facing financial problems."

4. University of California, San Francisco. "Mental health apps can match you with licensed therapists you can access as needed for a monthly fee (check out the reviews first)."