On Friday, March 10, 2023, Silicon Valley Bank (SVB) collapsed, becoming one of the largest banks to fail since the 2008 financial crisis. SVB was a bank that specialized in providing loans to technology startups. It was a popular bank for companies looking for funding.
However, it began to run into issues when the startups they lent money to could not pay them back. This led to the bank suffering significant losses in the mid-2000s. The bank’s management tried to remedy the issue by raising capital and tightening lending standards. But this was not enough.
Silicon Valley Bank is a reminder of how important it is to maintain mental well-being during times of financial uncertainty. A Northwestern Mutual study found 44% of Americans stated that financial concerns were their number 1 stressor while 57% of Americans cried about money in the past year.
Let’s chat about finances and mental health ⬇️
The Impact of Mental Health
The fall of SVB was quick, not many people were expecting it. For many startup founders, this meant that they had to put on a strong face during adversity for their employees. For the many startup founders who had their funding in SVB, they had to come up with a way to pay their employees or continue their projects without SVB behind them.
Pioneer Mind, a company also funded by SVB, spoke on the importance of advocating for founders and their mental health after the collapse. Losing your funding cannot feel easy, but having the burden to take care of the people who work for you must add a new kind of pressure.
For the employees of SVB, this meant they were out of a job. Not only did their source of income fall under but their mental health fell under as well. As many people would now need to look for new jobs, adding to the stress of no longer having a consistent income.
Emotional Toll of Financial Collapse
When we are under financial stress we develop both mental and physical symptoms. This could include:
- Damage to self-esteem
- Shame
- Anger
- Fear
- Despair
- Trouble Sleeping
- Low energy
- Change in weight
- Depression
- Anxiety
In the worst cases, financial stress can lead people to suicidal behaviors and thoughts. While this usually involves an array of other mental health issues as well, commonly, finances can contribute to it.
The anxiety and despair that comes with difficult financial times often include the emotional response to procrastinate. Procrastination isn’t about a lack of self-control or poor time management. It’s an emotional response to the task at hand. However, when it comes to finances, avoiding difficult situations can cause things to become worse. Only deepening someone's financial anxiety or despair.
Lessons Learned
Stay Connected to Friends and Family
When you are struggling financially, it is essential to stay connected to those who can support you emotionally. Almost everyone in their lifetime experiences financial struggle so it’s likely someone who you are close to will have experienced something similar. So while it can feel embarrassing, asking for help can be crucial to creating a support system.
Create a Financial Plan
It’s essential to have a plan for managing your finances, including setting realistic goals, creating a budget, and monitoring your spending. A financial plan can reduce stress and anxiety around money and provide a sense of control.
Seek Professional Help
If you are struggling with financial anxiety or despair, consider seeking help from a financial advisor or counselor. They can provide guidance and support in developing a financial plan and managing your emotions around money.
Stay Informed
Keeping up with financial news and trends can help you make informed decisions about your finances and reduce uncertainty and anxiety. Consider subscribing to financial newsletters or attending seminars or workshops on financial literacy.
It’s clear that financial struggle and mental health coincide. So it is essential to maintain an understanding of what to do in times of crisis or uncertainty. The collapse of Silicon Valley Bank is a stark reminder of the importance of responsible financial management and mental health support.
Need emotional support due to finances? Our easy-to-use provider directory helps you find someone in your state (that takes your insurance) today.
