World Mental Health Day had come and gone, but it’s sensible to reflect on what action we should take to care for ourselves moving forward.

The National Health and Morbidity 2017 Survey reported that 29% of Malaysians have mental health problems such as depression or anxiety due to life experience or environmental factors. Mental health problems are likely to become more prevalent, based on evidence whereby a 50% increase in the total number of depressed patients from 2011 to 2015 surveys has been noted. That is 1 in 5 people experiencing a mental health condition in their lifetime.

It’s intuitive that people who are depressed, anxious, chronically stressed or have other mental health challenges might have problems managing money.

With these rising figures, it is vital to understand how the state of our mental health affects our financial well-being and what we can do to minimise its impact our lives.

Beyond Dollars & Cents

While a person may have planned their finances well, they may lose their mental capacity to make decisions for themselves at the end of life stage.

Hence, it is important to consider how we should communicate our wishes, beliefs and values at a time when we may be mentally incapacitated or when we need assisted living. This will help our loved ones or people that we trust to have a plan – which has anticipated financial costs and care needs – which they can follow through on our behalf.

Here are some of the things to anticipate when you talk with your loved ones and fool-proof your financial plans against mental decline.

Ageing & Financial Decision-making

Generally, our cognitive ability – the mental action or process of acquiring, understanding and acting upon knowledge through thought and experience – declines with age.

In regards to financial decision-making, a study conducted by the Center For Retirement Research at Boston College found that people’s financial literacy scores decline by about 1% per year after the age of 60, yet their ability for self-assessment and confidence level are unaffected.

This means a person could make a bad financial decision, which they wouldn’t have made a decade prior, and still remain confident about their decision.

While ageing affects each individual differently with some retaining their cognitive ability and financial acumen, the potential risk of cognitive decline that happens on average should be taken note off and prepared for.

Mental Illnesses To Consider

When preparing to ensure our financial well-being can accommodate our needs in the event we contract a mental illness, we need to consider the common ones that can do severe financial damage and affect our ability to care for ourselves.

Studies have consistently shown that people with a history of depression have a significant risk of developing dementia. Another factor to consider is that many people with dementia have depression, which if left untreated would make confusion and forgetfulness worse, damaging the quality of life.

If a person’s finances were not planned out appropriately, a person with dementia or Alzheimer’s Disease would find themselves in a difficult position of not being able to access the money they need to fund the cost for care – which the National University of Malaya (UKM) had reported would cost RM 12, 806 on average for every episode of care.

Other mental illnesses such as schizophrenia – which is becoming more common in Malaysia with 15, 104 cases in 2015 and 2000 new cases being reported on average every year – can wreak havoc on a person’s financial well-being due to the sufferer’s lack of insight into their condition.

Anxiety disorders can also cause a person to spend money in unhelpful ways that prevent them from achieving their goals due to intense negative emotions such as pessimism and hopelessness. 

Financial Abuse

Another danger that would arise is our personal vulnerability which could be taken advantage of due to our state of mental decline.

Mental illness such as schizophrenia for example, affects a person’s understanding and judgement that may cause impulsive spending behaviours. This would leave us susceptible to exploitation from scams and financial abuse.

Incidentally, studies have shown victims of financial abuse, especially elderly ones, are familiar with the perpetrators of their financial distress – be it a family member or friend.

Mind Map a Course for Action

In light of these potential situations, doing Financial Planning in the context of Advance Care Planning (ACP) would help you navigate unexpected life situations. If you have a personal or family history of mental illness, it is especially prudent to do Advance Care Planning while you’re still well.

Doing so would not only help you consider the care you might need with clarity, but also ensure you’re aware and have applied the necessary mechanisms for your wealth to be readily available to pay for your medical and care expenses if you have a disability, illness or unable to care for yourself.

If you wish to know more about Financial Planning in ACP, ACG Concept will be hosting a talk called The ACP Conversationalist on 17 November 2018. For more information on the event, contact 03 – 2142 1666 or visit

ACG Concept Sdn Bhd is Malaysia’s first Lifestyle Advocate in aged care. We are an organisation whose purpose is to promote ‘Healthy Ageing’ as the modern lifestyle choice and empowering individuals to take charge of how they age. We organise and design programmes to activate functional ability and prosper individuals across the ageing spectrum.