How Alcohol Affects Mood and Mental Health—And Why Dry July Can Be a Great Reset

In Australia, Dry July is more than a fundraising initiative—it’s also a chance to hit pause on something that’s so deeply embedded in our social lives that we often forget it’s affecting us at all: alcohol.

Whether you’re taking a break to support a good cause or simply wondering how alcohol fits into your mental health picture, Dry July offers a rare and valuable opportunity to reflect. Many people are surprised by how much their mood, sleep, and energy improve in just a few weeks of abstaining. And if you live with anxiety, depression, trauma, or stress, these changes can be even more noticeable. As much as people are surprised by how much their mental health improves by abstaining from alcohol, they also know all too well how much their mental health suffers the day (or for some people two or three days) after a night of drinking. I don’t think a week goes by without at least one of my clients making this observation about their own mental health.

So I thought I might explore how alcohol interacts with our emotional wellbeing—and why stepping away from it, even briefly, can create clarity and relief.

Drinking can feel relaxing and pleasant at first. When alcohol first enters the body, it boosts the activity of GABA—a calming brain chemical—and suppresses glutamate, which is involved in arousal and stimulation. This is why you may feel relaxed or socially at ease after a drink. But these effects are short-lived. As alcohol is metabolised and its influence wears off, the brain swings in the opposite direction. GABA levels drop, and glutamate rebounds, creating a state of heightened arousal. This can feel like restlessness, racing thoughts, irritability, or even panic. It’s a rebound effect that often catches people off guard. It is this cycle that quietly reinforces the very symptoms we’re trying to manage—especially for those living with mental health conditions.

People with anxiety often use alcohol as a social lubricant or stress reliever. While this can work temporarily, alcohol actually increases anxiety once its effects wear off. It also prevents us from developing more sustainable ways to regulate our nervous system. Similarly, for people experiencing depression, alcohol can feel like an emotional anaesthetic—but over time, it worsens low mood, increases hopelessness, and interrupts recovery.

Alcohol also activates the body’s stress system, known as the hypothalamic-pituitary-adrenal (HPA) axis. While alcohol may initially dampen this system, it later provokes a surge in cortisol—the stress hormone—as it wears off. This increase in cortisol contributes to many of the physical symptoms people experience the day after drinking: jitteriness, tension, upset stomach, and feeling on edge. Repeated drinking and withdrawal cycles can make this stress system even more sensitive over time, meaning that over time everyday stress feels more intense.

Another reason alcohol increases anxiety is its impact on serotonin—the neurotransmitter that helps regulate mood. While alcohol might briefly improve mood, chronic drinking disrupts serotonin levels and receptor function, making you more vulnerable to anxiety and depression. Over time, your brain’s natural ability to balance mood and cope with stress is compromised.

For some people, a pattern of anticipatory anxiety also emerges. If you’ve experienced anxiety the day after drinking before, your brain may start to associate drinking with future distress. This can create a self-reinforcing loop: feeling anxious, drinking to feel better, and then experiencing rebound anxiety, which fuels more drinking. If you’re stuck in this particularly cruel cognitive-behavioural loop you are may be experiencing a deep sense of hopelessness and helplessness.

Sleep is another key piece of the puzzle. Alcohol disrupts REM sleep—the stage of sleep that helps us process emotions and regulate mood. Even if you fall asleep quickly after drinking, you’re more likely to wake during the night or feel groggy the next day. Poor sleep makes it harder for your brain to manage anxiety and can amplify emotional reactivity.

If you have a trauma history, alcohol may be something you’ve used to cope with distressing memories or bodily tension. That’s a very human and understandable response—but it can also delay healing and lead to more emotional instability over time.

In short, alcohol may feel like it’s helping in the moment, but it often sets off a chain reaction that leaves the nervous system more activated, the mood more unstable, and anxiety harder to manage. Understanding this helps us shift from seeing alcohol as a coping strategy to seeing it as something that might be keeping us stuck.

The beauty of Dry July is that it doesn’t ask for a permanent change. It invites curiosity. What happens when I give my body and mind a break from alcohol? If you are a current client of mine you will no doubt be familiar with my love of developing open curiosity about our experiences so I particularly love how Dry July encourages us to experiment with this.

So what does happen when I give my body and mind a break from alcohol? Many people report sleeping better, feeling calmer, thinking more clearly, and noticing a more consistent mood. Others find that the month reveals patterns—like drinking when feeling lonely, bored, or anxious—that are worth exploring in therapy.

If you’re unsure about your relationship with alcohol, or if you’ve found it hard to take breaks in the past, that’s a sign it might be worth talking to a psychologist. You don’t need to be drinking heavily or daily to benefit from support. In therapy, we can unpack what alcohol does for you, how it might be complicating your emotional life, and what alternatives could support you better. If you’ve been using alcohol to get by, that’s just one of the many ways the human brain finds relief. Through therapy you can find gentler, more lasting ways to feel safe, soothed, and steady again.

If you’d like to explore this further, you can book an appointment with one of our psychologists today. You don’t have to do it alone. Click here to make an appointment either face to face in Melbourne or via Telehealth. If you’d like a summary of everything in this blog post, you can download our free handout on alcohol and mental health—perfect for printing, sharing, or bringing along to your next therapy session.

References

• Breese, G. R., Sinha, R., & Heilig, M. (2005). Chronic alcohol neuroadaptation and stress contribute to susceptibility for alcohol craving and relapse. Pharmacology & Therapeutics, 108(2), 149–171.

• Stephens, M. A., & Wand, G. (2012). Stress and the HPA axis: Role of glucocorticoids in alcohol dependence. Alcohol Research: Current Reviews, 34(4), 468–483.

• Gilpin, N. W., & Koob, G. F. (2008). Neurobiology of alcohol dependence: Focus on motivational mechanisms. Alcohol Research & Health, 31(3), 185–195.