One in three Australians say cost-of-living pressures have negatively impacted their mental health either "quite a bit" or "an extreme amount" over the past twelve months. That figure comes from a Beyond Blue survey of more than 5,000 people. It is not a surprising statistic if you have been watching your grocery bill climb, checking your mortgage rate, or lying awake wondering how you are going to cover rent next month. What is harder to accept is that the same financial pressure causing the distress is often the thing that stops people from seeking help.
This article looks at what financial stress actually does to mental health — beyond simple worry — and what therapy can realistically offer when money is tight and the weight of it all feels unmanageable.
More Than Just Worry: What Financial Stress Does to Mind and Body
When people think about financial stress, they tend to imagine worry: replaying numbers in their head, dreading bills. The clinical picture is considerably broader.
Prolonged financial strain is linked to sleep disorders, cardiovascular disease, and weakened immune function. When the body registers persistent threat — and financial insecurity activates that threat response — it releases cortisol over extended periods. Elevated cortisol disrupts sleep, impairs concentration, raises blood pressure, and suppresses immune cells. A 2024 study published in Brain, Behavior and Immunity found that financial stress was the single most detrimental form of chronic stress to biological health. A more recent study in the Mayo Clinic Proceedings found that financial stress may age the heart faster than conventional cardiovascular risk factors such as hypertension or diabetes.
The relational damage is equally significant. When people are in survival mode — cutting back on food, fielding calls from creditors, unable to make plans — they typically withdraw. Social connections thin out. Shame accumulates. The erosion of self-worth that follows tends to outlast the immediate financial crisis.
What I see with clients is that the psychological distress is rarely just about the money. It reaches into questions of competence, adequacy, and identity.
The Australian Context: Not a Passing Inconvenience
Australia is experiencing a particular convergence of pressures. Research from the Australian National University (ANU), drawing on over 4,000 respondents, found that 34.2 per cent of Australians were finding it difficult or very difficult to get by on their current income as of January 2024 — the highest rate recorded since before the pandemic. Over 62 per cent had spent less on groceries and essential items. Renters face acute pressure, with 15.7 per cent finding it very difficult to live on their current income, compared to 4.9 per cent of outright home owners.
For younger Australians, the picture is compounding. Research from the Bankwest Curtin Economics Centre found that cost of living has become the top concern for Australians aged 14 to 25, with 56 per cent listing it as one of the biggest challenges facing the country — up from 23 per cent in 2022.
The Australian Psychological Society (APS) reports that among its member practices, the number of clients seeking help for anxiety and depression related to financial stress increased by over 50 per cent in one year, with around 20 per cent of all client appointments now related to the cost-of-living crisis. APS CEO Dr Zena Burgess has described the link between money worries and mental health as "strong," noting: "Many people are turning to psychologists for the first time, as they are struggling to cope with financial stress."
The Cruel Irony: Needing Help You Feel You Cannot Afford
There is a particular trap built into this crisis: the stress that most warrants support is the same stress that makes therapy feel financially inaccessible.
ABS data from 2023–24 shows that 20.4 per cent of Australians who needed mental health care cited cost as their main reason for delaying or going without it. Among those aged 25 to 34, the figure was 30 per cent. The government's decision not to extend Medicare-subsidised psychology sessions beyond the pandemic has worsened access. As Dr Burgess put it: "We are witnessing a rise in clients cancelling psychology appointments to save costs. This is a major concern, as it means that people who need help are not getting it."
Research also suggests that the fear of reduced standard of living — more than actual financial insecurity — is the single strongest predictor of psychological distress. The mind is pre-occupied with anticipated threat, which makes it harder to take the practical steps that might actually help.
If you have found yourself thinking "I'll address my mental health once I'm more financially stable," it is worth sitting with the likelihood that the instability is partly being sustained by the unprocessed psychological weight you are carrying.
What Therapy Can Actually Help With
Therapy does not provide financial advice, a second income, or a lower interest rate. It offers something different and, in my view, just as necessary.
In my practice, I work within a Lacanian psychoanalytic framework. From that perspective, money carries symbolic weight that goes well beyond its material value. How we relate to money — what it means to have it or not have it, what we feel we deserve, what it says about who we are — is shaped by personal history, family narratives, and a culture that ties financial position to personal worth. The cost-of-living crisis does not create these associations. It activates and amplifies them.
What I often observe is that financial distress pulls people back into older, more fundamental anxieties about security, capability, and whether they are fundamentally enough. Lacanian psychoanalysis creates a space to examine what is being asked of you, what meanings have attached themselves to money in your particular story, and how the current situation is reverberating with something that existed long before interest rates rose.
Beyond that broader work, therapy can help with:
- Reducing catastrophic thinking — distinguishing between a difficult situation and a permanent one
- Processing shame — financial shame is particularly corrosive because it is kept hidden; bringing it into speech changes its character
- Stabilising relationships — financial stress is relational stress; individual psychological work can reduce pressure transferred into partnerships and families
- Restoring a sense of agency — identifying what you can act on versus what you cannot, and reducing the paralysis that persistent financial anxiety tends to produce
Online therapy removes several practical barriers: no commute, no parking, no need to take time off work. Sessions happen from wherever you are in Australia, on a platform of your choice.
Conclusion
Financial stress in Australia right now is real, widespread, and causing genuine psychological and physical harm. The research is clear on this — and so is what I see in practice.
The emotional weight of this crisis is not something you simply endure until the numbers improve. It accumulates, it damages relationships, and it tends to compound over time if it is not addressed. Seeking support is not a luxury for people with comfortable incomes.
If you are struggling with the psychological impact of financial pressure, I offer online sessions via counsellingtherapymelbourne.com.au. You do not have to wait until things get worse.