Your Money, Lifestyle and Mental Health

Few weeks ago, the UK was ranked as the second most miserable nation in the world for mental health. This survey brought attention to not just the state of mental health of the people living in UK but even had other countries introspect themselves. This finding was part of the 4th Annual Mental State of the World Report by Sapien Labs. The study was based on a survey of internet connected users from around the world. The results of the survey seem to show no sign of improvement when compared to the survey from previous years during the height of the covid pandemic. The lockdowns and the several mandates were regarded as the number one reason for depression and loneliness among young adults. Since then, governments have loosened many restrictions and daily life has slowly returned back to normal but countries seem to have held their ranking when compared to the 2023 report by Sapien Labs. The lifting of the mandates has had no significant improvement on the mental well being of the population across many countries.

Coming out of the covid pandemic, many countries across the globe were in a dire financial state. The lockdowns affected peoples jobs, many were unemployed and this led to a change in spending habits. In the US, the CARES Act passed in March 2020 included much-needed assistance for Americans reeling from the pandemic, including $1,200 stimulus checks and an additional $600 a week for those receiving unemployment benefits[1]. The new money in the economy sent the inflation levels red hot. Combine that with the disruptions in the supply chain meant that now people had to spend more money for lesser goods and this again impacted peoples pockets. To combat this inflation, the Fed decided to raise interest rates.

The interest rates have remained unchanged at 5.2% since July of last year. People who took out loans and mortgages at variable interest rates are paying higher in interest payments for their loans leaving them with less money to spend on other goods and services. The Fed’s goal was to slow consumer spending, thereby reducing demand for homes, cars and other goods and services, eventually cooling the economy and lowering prices. Fed Chair Jerome Powell has acknowledged in the past that aggressively raising rates would bring “some pain” for households but said that doing so is necessary to crush high inflation[2]. 

Fast forward to the present day, annual inflation fell significantly from its 40-year high peak of 9.1% in June of 2022 to 3.8% in February 2024[3]. Although this is a good sign, Jerome Powell has stated that the Fed still needs to see more data showing that the inflation is on a path to 2% to consider cutting the interest rates[4].

How does interest rates in the US affect other economies around the globe? The US treasury bonds, bills and notes are generally considered a risk-free asset by investors as they are backed by the US government and this means that when there is a risk of default, the government could raise taxes to cover for the payments. Investors get about the same returns as the domestic interest rate. This means that the higher the interest rate, higher the rate of returns. Besides domestic, this also attracts foreign investors to invest their money in the US. Investors find the US economy a safer bet resulting in lesser funds for developing economies. 

Another reason why US interest rates matter for the world economy is the dollar denominated debt in emerging economies. Emerging economies may issue some portion of their debt in foreign currencies to mitigate investor fears regarding fluctuations in the value of the country’s local currency. So, as the US dollar appreciates the exchange rate between these countries and the US widens. As a result the dollar denominated debt owed by these countries increases and becomes unmanageable[5]. Then we have the credit crunch. Developing nations would find it difficult to acquire foreign loans as the higher interest rates would make borrowing difficult and in return affect the countries output leading to less growth in the economy overall. 

Although conflicts in the middle east and fluctuations in oil prices have brought uncertainty to the market but the Fed’s target to achieve 2% inflation is still far from the 3.5% inflation that was reported recently. Families are struggling to get by and calls are being heard from both sides of the political aisle to cut interest rates. Rising credit card debt and weaker GDP growth is also showing signs of a slowing economy and some companies have already started to pause hiring and move their work force abroad to save costs. The EU and India have also shied-away from cutting rates and kept them unchanged hoping for a better outcome by next quarter.

To some extent, how much money you have in your wallet matters but the lack of meaningful relationships makes matters worse. Hardships are not surprising but when you have no one to talk to about them is when you sink deeper into depression. Support groups are a great example of this. Support groups aim to empower people by sharing personal experiences of living and coping with a mental and physical health condition. The groups are typically formed around a common condition – from survivors of abuse, a particular disease, depression or anxiety to addiction and panic disorders. Support groups often fill in a gap between what doctors provide with medical treatment and the emotional support that loved ones offer who may not understand what you’re going through.[6] At times of uncertainty, the people you surround yourself with will have an effect on how quickly you bounce back and recover to your full self.

Diet and lifestyle changes also help in elevating your mood and combatting depression. Keep your home neat and tidy and dress up well because if you look good, you feel good. Besides looks, what matters is your diet. Your diet is linked to your gut microbiome which plays a vital role in deciding a person’s mood and mental ailments such as anxiety and depression. In one particular study, healthy volunteers with no previous depressive symptoms were given either probiotics or antidepressants. Those given probiotics showed reduced cortisol levels and improved self-reported psychological effects to a similar degree as participants administered Diazepam, a commonly used anti-anxiety medication. 52 Analogous studies found that probiotic therapy reduced depressive symptoms and improved HPA-axis functionality as well as Citalopram and Diazepam.[7] 

The bidirectional link between the brain, gut, and microbiome has come to the forefront of the medical research community in the past few years. The growing amount of evidence substantiating this link indicates it will be a valuable area for future medical and nutritional practice, and research.[7]

We shall delve into other causes of depression and poor mental health in today’s society in my future articles. For now, let’s wrap it up by saying that the economic downturns and it’s impacts are not in our hands. But we can equip ourselves with improved lifestyle changes and deeper meaningful relationships to face the challenges and help us gain the strength to get back on our feet. 

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