A top hat, shoes that didn’t fit and an abundance of art materials all seemed like reasonable purchases to Leah Milner during one of her high phases. "Everything I saw seemed to scream out to me. It was like everything I saw, I needed," says 37-year-old Milner, a freelance journalist who writes about money and mental health and suffers from bipolar disorder.
Blowing her savings on random items, combined with not being able to work, resulted in one period of illness costing Milner £25,000. "It’s amazing how much damage you can do in a relatively short period of time," she says. "But it didn’t feel to me like I was spending too much. I found ways of rationalising every purchase."
Milner’s experiences are not unique. Impulsive spending is a symptom of bipolar, with 8% of sufferers reporting compulsive buying habits compared to 3% of the population. Recent research on bipolar disorder from Solent NHS Trust identified two themes of overspending: bank-breaking online shopping sprees and spending as part of a grand scheme.
Bipolar is just one example of a mental health condition that can put people’s finances in jeopardy. "My research showed that other emotions play a role," explains Dr Thomas Richardson, principal clinical psychologist at Solent NHS Trust. "Greater depression, anxiety and stress increased compulsive spending over time. Participants also reported comfort spending to cope with difficult emotions. Lots of different mental health problems can be related to financial problems in many different ways."
People with mental health issues are three times as likely to be in problem debt, according to charity Money and Mental Health. Our impulse control becomes weaker when we’re sleepy, for example, and insomnia often goes hand in hand with anxiety, depression and stress. If you’re lying in bed awake at night, scrolling through your phone, it can take superhero strength to resist the lure of a flash sale.
"People can end up spending thousands of pounds in the night and realising in the morning that they’ve made a really big mistake,” says Helen Undy, director of Money and Mental Health. It’s also understandable that lots of people self-medicate with alcohol when they are going through a tough time and this causes any last drop of impulse control to evaporate.
Along with regularly treating ourselves, losing impulse control can make us overly generous towards others. Milner gave away many of her possessions and handed out £20 notes to homeless people several times a day when she was unwell.
Undy discovered a strong correlation between mental health issues and excessive gifting in her research. "We call it 'social value spending'," she explains. "We’re seeing people spending money they don’t have on gifts for people that they care about, often in response to low self-worth or struggling with feelings of being a drain or a burden." Women suffering from postnatal depression, for example, often buy things for their baby to compensate for their negative feelings.
But overspending is only part of the picture. Mental health problems also impact our ability to organise our money and cope with debt. That’s because conditions like depression or anxiety don’t just impact the way we feel, they affect the way our minds work. Financial admin is gruelling at the best of times but when we lose our mental health, our ability to rationalise, communicate with others and understand the world around us often goes with it.
For example, depression can make it harder to weigh up and process complicated information. "During my most serious period of depression I couldn’t deal with any kind of admin or bureaucracy," says Milner, who didn’t open her computer for months.
"Lots of people say that having depression is like seeing through a fog," says Undy. "When you’re looking at your energy bills or bank balance, it can seem like the numbers are swimming around and you can’t make sense of it. That’s a clear impact of a mental health problem, not some personal failing."
Our short-term memory can also suffer when experiencing conditions like post-traumatic stress disorder or as a side-effect of some mental health medications. This makes dealing with money more painful, as remembering things like passwords, pin codes or when to cancel a direct debit becomes a struggle.
And of course, the damage caused by extravagant spending is compounded when people aren’t well enough to handle the admin aftermath. If someone is so anxious that they can’t leave the house, they won’t be able to return that leather jacket they splurged on at 4am. In Undy’s research, three-quarters of people with mental health problems didn’t send back the last thing they bought that they regretted.
"It ends up becoming quite a complicated trap that people can fall into," says Undy. "When our mental health is suffering, often income goes down, spending goes up and your ability to manage the difference between those two things is reduced. It’s harder to budget, understand bills and financial statements and to shop around to make sure you’ve got the right products."
While some conditions make people particularly vulnerable financially, mental health is a spectrum and we are all susceptible to letting our moods make it rain. When broken-hearted, we might book a trip we can’t afford or blow our money for bills on a haircut. When we’re stressed, we might be tempted by a calming box of doughnuts or a spur-of-the-moment spa treatment. Spending as a way to cope with loneliness or boredom is also common, according to Undy’s research.
"We all have mental health and it fluctuates for everyone," says Undy. "And we’re all familiar with comfort spending. There’s a reason why we call it retail therapy — you get a rush of endorphins creating a short-term impact on how you feel. This is understandable and it’s important that we never blame people for turning to spending when they’re struggling."
The key is to recognise when shopping is a symptom of an underlying issue so that we can exercise some damage control. The signs to look out for will be different for everyone though, as money is so personal. "There is no such thing as normal spending," says Undy. "What’s important to notice is when there is a change in your normal behaviour and to look at your spending patterns over time."
Dr Richardson also advises looking out for patterns. "With time hopefully you’ll be able to identify triggers and subtle warning signs which come before excessive spending," he says. "It varies depending on the individual but there will usually be certain thoughts which occur before impulsive spending, or strong emotions such as anxiety."
If you’re worried about your mental health affecting your money, Undy recommends calling National Debtline or charities like StepChange, Citizens Advice or Christians Against Poverty. These organisations can help you come up with strategies to turn things around and even negotiate with creditors on your behalf to make sure you get the right repayment plan.
Money and Mental Health is also working with banks to introduce tools that empower customers. Credit card company Capital One can send people nudges when their spending goes above a certain level. Challenger bank Monzo has put a lot of thought into its customers' mental health; it's already rolled out a tool that lets you block gambling transactions, and offers customers bespoke support depending on their needs. "Rather than simply supporting customers who already have money problems, we want to prevent people from getting into financial difficulty in the first place," says Natalie Ledward, one of the bank’s vulnerable customer specialists.
The relationship between money and mental health is multilayered, personal and not just down to us as individuals to manage. "It’s really important that we don’t forget the structural issues at play. If you don’t have enough money in the first place, being better at managing your spending is not going to fix it," says Undy, who is working to influence government policy and support for people who can’t work because of mental illness. But we can all help stop the shame around spending and, if we’re struggling, at least give ourselves a break for going broke.